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L'Oreal, traditionally one of the smaller advertisers in the $2.3 billion mass-market cosmetics business, is joining the big leagues with an ad budget in excess of $32 million this year.

The spending, via McCann-Erickson Worldwide, New York, is 50% greater than the $20 million or so the French cosmetics giant put behind its U.S. cosmetics last year and nearly triple 1994's $12 million budget.

VP-Color Cosmetics Marketing Pam Gill-Alabaster confirmed the spending hike, which coincides with a series of product introductions, as well as the parent company's acquisition of Maybelline and a push to forge growth in a market where unit sales have been off 2% to 3%.


L'Oreal isn't the only one going big time in terms of an advertising investment. Revlon's Almay is pumping up its ad budget to between $25 million and $30 million-from around $11 million in 1995-as it fields new products and formulas under the Clear Complexion and Amazing Eyes names (AA, March 4). The Revlon work from Tarlow Advertising features model Vendela.

Almay also is expected to increase its use of promotional vehicles, such as direct mail sampling and couponing.

The Revlon brand itself is building an extensive advertising and promotional tie-in around the Academy Awards (see story on Page 2).

"This just shows L'Oreal and Revlon want to gain market share and that both perhaps perceive weakness within Procter & Gamble Co., whether or not it's real," said industry consultant Allan Mottus.

"L'Oreal also has to spend if it's going to differentiate itself from Maybelline, which [has received] more than $40 million on media."

Despite P&G's avowed commitment to cosmetics and its ownership of the No. 1 brand in Cover Girl, there has been persistent talk in the industry that if P&G can't correct the struggling Max Factor brand within a couple of years, both lines will be sold.


Such a sale might not mean P&G's exit from cosmetics; it has Oil of Olay cosmetics in test in Evansville, Ind. If successful, Olay, already a global skincare name, would give P&G the global cosmetics presence it has long sought and never realized with either Factor or Cover Girl.

P&G leads U.S. cosmetics sales with about a 30% share, but L'Oreal is No. 1 worldwide and the Maybelline acquisition will level the playing field with P&G in terms of total U.S. share.

As a brand, L'Oreal is ranked fourth in facial makeup by Information Resources Inc., trailing Cover Girl, Revlon and Maybelline, in that order. In lip color, L'Oreal is third, topped by Revlon and Cover Girl; in mascara, L'Oreal trails both Maybelline and Cover Girl.

L'Oreal's spring makeup spending will be put behind new Sensitique Gentle Lash Building Mascara and Feel Perfecte Makeup, an all-day product.

L'Oreal will support its spring color promotion, themed "Cybershine," with ads that also will tout its new Web site (http://www.lorealcosmetics.com).

While the increased spending would seem to make things difficult for smaller brands such as Jane by Sassaby and Aziza, one of the marketers doesn't think so.

"It's exciting. The focus will be on growth and competition now for the players. It's also good for niche players because there will be real need for niche brands," said Jane President Don Petit.

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