L’Oreal digital spending jumps as CMO figures out where to invest

L’Oreal USA will spend as much on digital advertising in 2011 as it has the past two years combined, said Marc Speichert, CMO of the company, on June 9.

Digital advertising is a “must-have” for the brand, because one of out three consumers are researching products online before they purchase, he said at the Interactive Advertising Bureau‘s “The Future of Display” event.

“In some of our categories, it actually goes to one out of two [consumers],” he said during a fireside chat with IAB president and CEO Randall Rothenberg.

But L’Oreal is still trying to understand where to best invest its digital advertising dollars, Speichert said.

“Am I better off putting my money on my site? Am I better off putting my money on a beauty channel on YouTube? Am I better off putting my money on developing content? Is everything eventually going to merge where I’m going to have a display banner that’s going to kind of do everything, where I’m going to be able to purchase from my display banner and have my social component embedded into it?,” he asked. “So if anybody has any insights, I would love to talk because I’m still figuring that out.”

Speichert said “one of my obsessions at the moment is to understand the path to purchase.” The consumer’s “path” begins with the “consider phase, which I guess is the traditional advertising push strategy.”

He added that Apple’s iAd units are a “perfect” example of the consider phase, and L’Oreal will launch an iAd for its L’Oreal Paris brand “very soon.”

The next phase in the path to purchase is the “evaluate phase,” said Speichert.

“In other words, I see an ad in print, on TV or a display banner, I think the challenge is that the consumer goes online and searches for that product or that category, and if I’m not there, it doesn’t matter what I did at the consider stage,” he said.

Speichert added that it’s important for brands to partner with content companies at this stage to create and serve content to educate consumers in the purchasing process.

In May, L’Oreal USA said it has partnered with online media company Demand Media to serve branded content on two of Demand’s online outlets targeting female consumers. They also agreed that Demand will create a custom YouTube channel for L’Oreal USA. Speichert said 15 L’Oreal brands are involved in the partnership.

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