financial
financial

L'Oreal Ups the Ante

The advertising and promotional budget is expected to increase again this year, both for the mass division and L’Oréal USA as a whole.

By
with contributions from Faye Brookman
financial/news


Campinell did not disclose ad dollar outlays, but industry sources estimate that the L’Oréal division spent around $600 million in 2008 on advertising and promotion. While there sometimes is a disparity between what is spent and reported outlays, TNS Media reported the Consumer Products Division spent almost $570.1 million from January to September of 2008, down slightly from the more than $584.2 million of the previous year. Then came the big fourth-quarter surge.

Campinell declined to cite specific results for particular brands, but the combined Consumer Products Division commands a cumulative share of more than 20 percent in the U.S. market, with a business hovering around $3 billion in sales. L’Oréal’s share of the hair coloring market is estimated at more than 50 percent, and color cosmetics is in excess of 30 percent. He was quoting market share data supplied by Information Resources Inc., which does not include Wal-Mart. Citing client confidentiality, IRI declined to elaborate on the figures.

Moreover, Campinell promised to keep his foot on the gas. “We will spend disproportionately against what we think will be a fairly soft market,” he said. “We expect growth in sales and market share.”

In normal times, L’Oréal usually shoots for an annual market share gain of about one point. Despite the record weakness of the economy, Campinell said he expects to still gain anywhere from half a point to a full point for 2009.

It certainly seems doable, judging from the last quarter. For the fourth quarter, CPD’s market share was up better than half a point, Campinell noted.

L’Oréal expects to accomplish this not only with a loaded advertising budget, but with an armload of new products, most of which are starting to hit store shelves now. They include Excellence to Go, a quick home hair coloring kit that L’Oréal has marketed in Europe for eight months under the Excel 10 name. It will compete here with P&G’s Perfect 10. Another launch will be EverPure, a sulphate-free hair care line for color-treated hair. The Garnier brand will introduce Ultra-Lift Pro, a $15 high-tech product that is designed to correct deep wrinkles. Maybelline has an answer to the numerous mascaras that have launched in the market this year. It’s entry is Lash Stiletto and it is now in the stores, backed by a barrage of TV advertising that just started this week. Campinell added many other products are being launched as well, including numerous color items.

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