L'Oreal shortlists four agencies for UK media pitch

The beauty company is Britain's fifth biggest advertiser with £106m spend.

WPP, Publicis Groupe, Dentsu Aegis Network and the7stars are in the running for L’Oreal’s estimated £100m-plus UK and Ireland media-buying account.

The beauty company is Britain’s fifth biggest advertiser, spending an estimated £106m in the 12 months to September 2018, according to a report on UK media expenditure from Group M, the media-buying arm of WPP.

Industry sources say the competing agencies met L’Oreal this week as the pitch process nears a conclusion.

The7stars, Britain’s biggest independent media shop, is an intriguing contender because L’Oreal’s business is about one third of the agency’s current billings.

None of the agencies would comment and referred questions to L’Oreal.

L’Oreal has used Group M for media planning and buying in the UK since 2014 when Maxus won the business from Publicis Groupe’s Zenith Optimedia.

Group M shifted the account at the end of 2017 to Wavemaker, a new agency created by the merger of Maxus’ assets with MEC, as part of a group restructuring.

The rest of Maxus’ UK staff, including some of its most senior leadership, and its biggest client, BT, moved to sister agency Essence at the same time.

L’Oreal has signalled it wants to take a more digital approach.

When Gayle Noah, media director at L’Oréal UK and Ireland, announced the UK media review last November, she described the brand as "an innovative and forward-thinking business" that was looking for "the very best strategic, data-driven and collaborative partners" to help it operate "at the forefront of modern media practice".

Jean-Paul Agon, chairman and chief executive of L’Oreal, told investors on its annual results call in February that it upped its advertising and promotional spend last year by 500m euros (£430m) to 8.1bn euros (£7bn) "in order to prepare for the future", even as some consumer goods rivals cut marketing spend.

L’Oreal spent 43% of its media budget on digital in 2018 compared with 38% in 2017.

Three-quarters of its digital budget was invested in "precision advertising which we can optimise in real time" with "proprietary" tools and it has "strongly" increased returned on investment, according to Agon.

"We have more than 2,000 digital experts in-house, including data scientists, social media strategists and digital media specialists," he said, adding L’Oreal had also "upskilled more than 22,000 employees" by training them to use digital tools.

Aperto One is advising L’Oreal on its media review.

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