New ways of working together, sharing technology and expertise, and creating a culture of learning are key if a client wants to build a future-facing partnership with its media agency.
That’s according to Stéphane Bérubé, chief marketing officer at L’Oréal in western Europe, and Gayle Noah, media director at L’Oréal in the UK and Ireland, who recently moved the beauty brand's £106m UK and Ireland media account to WPP’s Essence and created a new client/agency team, Beauty Tech Labs.
L’Oréal wants to become a "digital-first" company and Bérubé said the ambition of the review was to find "the agency of 2023", not just an agency that was fit for 2019.
He described Essence, which counts Google as its biggest client, as a "very modern" agency.
However, Bérubé said L’Oréal approached the pitch knowing that it could not just expect change to come from its media agency – part of the change had to come from the client.
There was recognition internally that "we will also have to change our ways of working with the agency, the way we make decisions, the way we input into the media plan and the go-to-market strategy," Bérubé said, explaining why L’Oréal has also invested in its in-house marketing team.
'So it doesn’t feel like it's agency versus client'
A key aspect of the Beauty Tech Labs model will see L’Oréal and Essence pool some of their technology and test and learn on a fast-moving basis.
While staff from the client and agency will work together sometimes in the same location, the sharing of digital resources is more important in this new, more agile and flexible set-up.
"The idea of Beauty Tech Labs is to really deliver this agency of the future," Noah said.
"There’s going to be seamless integration between agency and client – project management tools, access to the same training, making sure we’ve all got access to the same systems – so it doesn’t feel like it’s an agency versus client."
L’Oréal’s ambition is that Essence and WPP will be "operating very much like a tech company rather than a holding company" that can support the in-house team, Noah explained.
"We will tackle key topics in agile sprints, very much working like a start-up. We’ll pull in the expertise we need [from Essence and WPP], as and when we need them. We will have teams co-locating on projects, as and when we need them," she said.
"The whole thing is underpinned by a learning agenda – constantly moving forward, thinking about innovation, sprinting our key topics."
Becoming a smarter, better client
Bérubé said investing in-house was the first step for L’Oréal’s as it considered the "modernisation" of its marketing over the past couple of years.
"I’m a firm believer that by bringing in in-house expertise, we’re becoming a much smarter client – it’s true not just in media, it’s true in ecommerce, it’s true in all of the business," he said.
The growing importance of digital means L’Oréal needs more internal talent with "specific expertise" in different areas, such as audience and community management, data, CRM and ecommerce.
Bérubé went on: "I truly believe by bringing some components of precision marketing in-house, we are a much smarter client and challenge and work with the agency in a much different way.
"This is something we have also done in other countries. The agency really appreciated it – they really feel that by elevating our knowledge and our expertise, it brings the discussion to another level.
"With an agency like Essence that is digital first, it’s more important than ever to have the knowledge in-house to be able to have the right discussion with the agency."
L’Oréal employs about 10 people in its UK and Ireland in-house media team.
However, Bérubé does not think it makes sense to "in-house 100% of everything" and all of the key planning and buying skills "will remain with the agency".
He said: "The role of the agency is as important as it was before – it’s just changing and evolving."
For Noah, it means the media agency needs to "work much more as a partner" in the future.
It's about "being much more flexible, thinking about how they adapt to our business, thinking about the consumer, really thinking about lots of different areas, rather than about the pure media plan," she said. "They need to think about much wider things and much more about business focus."
Changing media investments
Advertising and marketing matter to L’Oréal, the fifth -biggest ad spender in the UK last year, because it needs reach and wants to raise awareness for new digital products such as ModiFace, a new augmented-reality, make-up "try-on" tool.
"We need an agency that really understands this kind of technology to be able to help us to drive the right consumer at the right time to try these [personalised] services," Bérubé said. "If we don’t have consumers using these services, they become useless."
Noah added that it was important to have an agency that could help L'Oréal stay at "the forefront of all the developments that are happening in the market" – "not just online but what’s coming with programmatic out-of-home and addressable TV".
L’Oréal is also "pushing the measurement" to understand "what does media buying look like in the next few years and how can we get one step ahead of it", she said.
The brand's media mix has been changing to reflect changing consumer habits, although Bérubé said it was focused on new channels, rather than on reducing spend in areas such as "traditional" TV and magazines.
"At the end of the day, I am not sure we are going to stop anything," he said. "It’s just changing the way we are doing currently things.
"It’s not that we’re going to stop planning or buying TV; it’s just that we’re going to do it differently. It’s not that we’re going to stop planning and buying print, but it’s going to be much more integrated into new ways of planning and buying."
Noah pointed out that L’Oréal is "pushing media owners", as well as its agencies, to innovate.
Bérubé said of its media investments: "If there is one thing that maybe will change – it’s not about what we buy, what we don’t buy – it’s in our ways of working."