After creating an innovation fund last year, L'Oreal executives sought out digital-marketing startups for projects to use it with, only to find that companies it wanted to work with were often hard to identify -- and that few were headed by women.
To address both issues, L'Oreal earlier this year launched its NEXT Generation Awards to honor five women leading groundbreaking digital-technology companies, assembling a judging panel including Arianna Huffington and Facebook VP-Global Marketing Solutions Carolyn Everson. The first winners were honored July 17 in New York.
L'Oreal USA Chief Marketing Officer Marc Speichert has sought to create a "digitally focused company." But in a meeting last year, executives realized "there's definitely a different speed between what's moving from the venture community vs. coming to us through our agencies," said Rachel Weiss, VP-digital strategy and interactive marketing at L'Oreal.
"A lot of amazing startups out there aren't ready yet to work with your agency but are looking for a corporate partner to help advise them and expand," she said.
The first set of NEXT Generation winners, whose companies are "very very likely" to win work at least on pilot projects for L'Oreal, according to Mr. Speichert, include:
Doreen Bloch, founder and CEO of Poshly.com, which provides customized samples based on an algorithm to match beauty samples with the right consumers
Bettina Hein, founder and CEO of Pixibility, a video-marketing company that helps get the right videos in front of the right audiences
Sarah McIlroy, founder and CEO of FashionPlaytes.com, which encourages tween girls to create, share and wear original fashions by providing millions of design combinations
Kathryn Minshew, founder of The Daily Muse, an online community for professional women, and CompanyMuse.com, a career and job-search site
Vivian Rosenthal, founder and CEO of GoldRun, a mobile platform with a GPS-enabled virtual camera that lets users share branded augmented-reality photos and accompanying messages on social networks, earning rewards and discounts from marketers.
Not all the women have done business with L'Oreal yet, but the award lets the company "engage them in a much deeper conversation and creates the connection point," Mr. Speichert said. "We're also making sure we're providing our own talent to them so they can fine-tune their plans."
The contest also has helped L'Oreal forge better ties with the venture-capital community, Ms. Weiss said, and helps address the fact that fewer than 1% of venture-capital dollars now go to female-headed companies.
"Now we have influence and credibility with the investment community who are now calling us first about how we can work together," she said. "A lot of VCs have called us looking at women with startups asking 'Is this something L'Oreal would use?'"
L'Oreal, whose consumer base is primarily female, is looking to create digital experiences "by women for women," Mr. Speichert said.
Judges for the contest, besides L'Oreal executives, included venture-capital executives and members of L'Oreal's Women in Digital advisory board, including Ms. Everson and Ms. Huffington along with Joanne Bradford, chief revenue and marketing officer of Demand Media; Shaherose Charania, co-founder and CEO of Women 2.0; Jalak Jobanputra, managing director of RTP Ventures; Karin Klein, who handles business development, acquisitions and strategy at Bloomberg; Katie Rae, managing director of digital-business accelerator TechStars Boston; Rudina Seseri, partners at Fairhaven Capital; and Shelly Zalis, CEO of Ipsos Open Thinking Exchange.
L'Oreal received more than 2,200 nominations for the awards, Mr. Speichert said, largely through publicity and crowdsourcing.