Speichert Looks for 'Big Growth Bets' as First CMO of L'Oreal
L'Oreal has never had CMOs at the country level or globally until last year. That changed, with the U.S. leading the way for the Paris-based beauty marketer, the world's biggest. To fill the post, Frederic Roze, CEO of L'Oreal USA, turned to an outsider -- Marc Speichert, a career Colgate-Palmolive Co. executive with experience in France, Greece and Mexico, including heading personal care for Colgate's crucial Latin America region.
Up to now, L'Oreal's divisions included consumer products, with the mass L'Oreal Paris and Maybelline-Garnier units; a luxury division anchored by Lancome; an active-cosmetics division including La Roche-Posay; and a professional division with Matrix and Redken in addition to such retailers as Kiehl's and The Body Shop. Mr. Speichert's mission is to find synergies among those divisions and help develop common strategies to realize L'Oreal global Chairman-CEO Jean-Paul Agon's vision of adding a billion new consumers by the end of the decade.
Competitors such as Procter & Gamble Co., of course, have similar ambitions (in its case, a billion new consumers by 2015). One difference with L'Oreal: It's counting on a lot more of those consumers to come from the U.S., where the company still believes it can be much bigger.
To that end, L'Oreal is already spending more -- with its measured-media spending through the first 10 months of 2010 on pace to top $1 billion for the first time ever. But it also needs to spend smarter, Mr. Speichert said, and part of that is more spending on digital, facilitated by his recent decision to name Publicis Groupe's Moxie Interactive, Atlanta, as the company's first digital-media agency of record.
Such moves aren't coming at the expense of L'Oreal's traditionally heavy reliance on magazine advertising, Mr. Speichert said. And he's using his heritage at Colgate -- a traditionally frugal spender -- to look for opportunities to improve bang for the buck, including going where rivals aren't or can't easily follow. Among those has been a relationship with prolific and popular video blogger Michelle Phan, and, launching last year, L'Oreal Paris' own exclusive Destination Beauty channel on YouTube.
In an interview with Ad Age, Mr. Speichert outlined how he sees his new role and how he's going about making sure the U.S. contributes at least its share of L'Oreal's new consumers over the next decade.
Ad Age: Within the past year L'Oreal on a global basis and here in North America has created this chief marketing officer role. Why?
Mr. Speichert: The U.S. is a huge growth engine for the company, which makes it very exciting for everybody here in this building, because you know it's one of the very few developed countries that has a really big share to contribute toward the billion consumers.
I've been spending quite a bit of time on preparing for the future and trying to align innovation to where the big growth bets will be. In that capacity you need to look at it universally. You need to look at those synergies where they exist and make sure there's the least amount of overlap between the brands and initiatives we're doing.
Ad Age: Your role spans divisions and is really new for L'Oreal. How do you see your role here?
Mr. Speichert: The vision was really twofold. One is to really push innovation to the next level. Having the brands set up within a channel of distribution is what made the company successful, and that is not going to change, but it's where do we create synergies that make sense?
There's also the opportunity to think about it from a market-research perspective [to create a] view of our consumers and our shoppers in how they move from one department or one channel to the other.
Ad Age: Though last year was good for L'Oreal, a couple years toward the end of last decade weren't as strong as you would expect. Why?
Mr. Speichert: 2008 and 2009 were tough markets in the industry. The good thing for us was that we took the bold move to make sure we're not going to step down from investment. So we continued to aggressively spend media specifically. We're now seeing a very nice kind of return on that investment. We very aggressively continue to spend on R&D as well, so a lot of the products that we are launching right now were fine-tuned in those tougher years.
Ad Age: Are there lessons you learned at Colgate that seem particularly applicable here?
Mr. Speichert: One of the things that I learned was to scrutinize every dollar spent. The other was to really look for those white-space opportunities from a media perspective, so you are able to identify an area where you think you can break through even though you might have less money to spend. Maybe the third one is relationship building. Colgate is a very relationship-driven company, and so is L'Oreal.
Ad Age: Over the years L'Oreal has been pretty strong in print media. Is that going to continue or will you move money to digital?
Mr. Speichert: It's definitely going to continue to be a key medium for us. We've been able to show a relationship with print that's just very unique as far as beauty's concerned.
One of the things we're doing is to partner with some of the publishers and embrace some of the new things. We are one of the very first to embrace what some of the publishers have done with the iPad.
We've definitely increased our spending in print, and so the digital spend didn't come at the detriment of print.
Ad Age: What one emerging medium or one trend in marketing is the biggest new thing?
Mr. Speichert: We've been using in the past, and still obviously use, celebrity spokespersons as endorsers. One of the things we're seeing is that you can kind of transform that model, which we've done very successfully with Lancome with Michelle Phan. She's getting on average between 2 and 2.5 million views per [Lancome] video. It's the new way of leveraging an endorser. This is a 23-year-old Vietnamese-American blogger who's talking about how she is using the product, and it's very authentic in a very approachable way that reaches a whole new set of consumers.
Ad Age: How do you measure return on investment in marketing?
Mr. Speichert: In looking at things more broadly we started to look at paid, owned and earned and how to assess investment for those specifically. I read an intriguing article on adding two new dimensions to it, which they called "sold" and "hijacked." Sold meaning you created a media property that becomes so powerful ... that you could start selling advertising on, which for me is kind of ideal. And then the hijacked one, which is sort of the flipside, because consumers take over the media property and don't necessarily do with it what you would like them to do.
Destination Beauty is a beauty channel that we created on YouTube. ... It's bringing [together] a whole bunch of different beauty bloggers who create how-to videos and give you tips on makeup, some hair care, and who really kind of engaging and creating a kind of community. That's an example of where we are creating a media platform, and obviously the challenge is: How do you make sure you manage that community and that channel in the proper way so that you don't get hijacked?