L'Oreal USA Looks to Develop Own Programmatic Trading Desk

Beauty Giant Would Follow P&G and Others Amid Industry Concerns

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CORRECTION: An earlier version of the story, including the headline, said L'Oreal would bring its programmatic trading in house. A spokesman later said the company will not bring it in house, but characterized its plans to do programmatic media buying as a "client-led strategic partnership with our media agency."

L'Oreal USA looks to be the latest big marketer set to develop its own programmatic digital trading capability, soon after concluding its North American media review.

Lubomira Rochet
Lubomira Rochet Credit: L'Oreal USA

The company has posted a job listing for an assistant VP of Precision Advertising Information Technology with experience overseeing data management platforms and demand-side platforms used to build in-house trading desks. The person is to work with the company's chief marketing officer team and brand media leaders to identify "which platforms will be trialed and then scaled for broad use to achieve precision buying and tracking of media buys."

A person familiar with the matter said L'Oreal is looking to build an in-house trading desk. A L'Oreal spokeswoman initially declined to comment.

But a spokesman later said in a statement: "L'Oréal USA has no plans to bring programmatic trading in-house. The approach that we are taking will be a client-led strategic partnership with our media agency supporting our decisions, the operations, technology and relationships."

The move comes roughly a year after L'Oreal Chief Digital Officer Lubomira Rochet said in an interview with Advertising Age that the company is exploring a variety of options for handling programmatic trading.

L'Oreal rival Procter & Gamble Co. launched its Hawkeye system in 2010, and others have done so more recently, such as Kellogg Co. and big retailers Walmart and Target. The latter two are among a growing number of retailers with in-house trading desks that also serve suppliers.

Unilever and Kimberly-Clark Corp. have developed dedicated programmatic trading operations through WPP's MindShare, while many others still buy through operations such as WPP's Xaxis, which serve multiple clients.

Programmatic trading desks have been central to two big media-buying issues in recent years -- transparency and fraud. Association of National Advertisers studies have found many marketers have suspicions about the murky supply chain of digital buying, with programmatic adding a layer of complexity that makes it harder to know how much their agencies make on the buys.

In a talk with investors late last year, Unilever Chief Marketing and Communications Officer Keith Weed credited his company's Mindshare-run Ultra programmatic trading system and strict standards on viewability of digital ads with limiting fraudulent traffic in buys to 2%, which he said was the lowest of any marketer in a North American study that found fraud traffic accounted for up to 37% of some marketers' buys.

An ANA study released last month in conjunction with digital fraud-tracker WhiteOps and several marketers, including Unilever, found fraudulent impressions accounted for 3% to 37% of buys depending on the marketer. The ANA declined to identify which marketers were at the high or low ends, and a Unilever spokeswoman said the company wasn't at liberty to discuss its results in that study.

Contributing: Alexandra Bruell