Marketing Agency Models In Depth

‘A model fit for 2023’: L’Oréal's CMO on how Essence won its media business


By Jennifer Faull | Deputy Editor

June 11, 2019 | 7 min read

L’Oréal’s chief marketing officer for Western Europe, Stephane Berube, media director Gayle Noah and Essence’s global head of business planning, Sarah Walker, take The Drum behind the scenes on how the agency won one of the most contested media pitches of 2019.

The WPP agency’s win of the £106m media account late last Friday (7 June) was a surprise. Essence succeeded sister shop Wavemaker, the incumbent. It was also the first time L’Oréal, globally, had signed a contract with a ‘digitally native agency’ to handle a media brief of this size.

In a statement issued at the time, the brand revealed it would set up the ‘Beauty Tech Lab’, an experiment of a shared client-agency model that would be "powered by Essence’s and L’Oréal’s technology, operational expertise and talent with seamless access to insights, knowledge and resources from across WPP".

What L’Oréal wanted

The review was called in November 2018. L’Oréal had previously worked with WPP media agency Maxus, which was appointed to take over the account from Publicis' ZenithOptimedia, but the client had to navigate a number of internal and external changes.

Firstly, WPP merged Maxus with sister media shop MEC to form the consolidated agency group, Wavemaker, in 2017. During that time, L’Oréal's internal approach to marketing also changed. It consolidated its digital, marketing and communications teams and was slowly trying to bring more media capability in-house – it now needed an agency to work seamlessly within that.

“The role of the agency is changing," explained Berube. "As a client, our role is to be more knowledgeable and less dependent of the agency. The days of 'the agency want this and it must be the right thing cause they are the experts' are over.

“There's lots of things that we can do internally and a lot of expertise we can bring in-house to be a smarter client that can challenge and get the best out of the agency. The role is to take these challenges and find solutions and then scale the proposal.”

L’Oréal wanted three things from its agency: talent (“three years ago we didn’t need an audience manager, now it’s a core skill”), technology (“buying media technology it not our job – our job is beauty”) and flexibility.

“We were looking for an agency of 2023, not 2019,” said Berube. “We needed new ways of working, technology supported, reporting and everything that goes with that. It wasn’t just true of digital media, it's was true of traditional, which is still a very important component of our business.”

What Essence pitched

L’Oréal didn’t ask the pitching agencies – Dentsu Aegis Network’s Carat, Publicis Media and indie The7stars – to create a new agency model. But that’s what Essence pitched.

“The model we pitched is based around forming a core team across Essence, WPP and L’Oréal that is seamless and without boundaries," said Walker. "That doesn’t just mean working in eachother's offices, but sharing the same software, tools and processes, so everyone is working from a single source of truth.

“Essence will act as a gateway to wider expertise across the WPP network and help facilitate easier access to the offers and services L’Oréal need. Too often this kind of access gets held up by not having a structured process in reality, so we’re building our entire model around this and planning for future projects, however they come.”

Noah, who led the process, said The Beauty Tech Lab, as it’s been christened, was positioned in a way that would see Essence, and WPP by extension, operate “more like a tech company than a holding company”.

“Some of the exciting things we saw coming out of the pitch proposal was some of the skills sets that they'll bring into the new team," she said. "Where we might have expected normal skills that come out of an agency, they went over and above what we were expecting. For example, [citing] roles like coders, data analytics and strategists.”

How it will work in practice

The proposition, however, is far from an Oliver-style model that will see Essence media execs camp out in the client's Hammersmith offices.

Essence will lead from its HQ and L’Oréal will have key members of its team work from the agency's quarters on a weekly basis.

“The team will work around a sprint model. L’Oréal has an ambition to become the world’s first beauty tech company, and know that in order to enable this transformation there will be key things they need to learn on their journey, from big and strategic to small and tactical," continued Walker.

“We are building the framework around a shared learning agenda - laying out what we need to learn and turning that into specific projects for the short and long term, bringing in expertise from across the group to make it happen. For example, if there is a big project around how best to optimise L’Oréal’s ecommerce sites, we can bring in our partners at Wunderman Thompson Commerce to help with specialist expertise."

Making this work in practice has required a lot of cross-WPP collaboration, and it’s been supported by the holding group's UK country manager, Karen Blackett, who took an active involvement in the design of the model and how it will work across the different agencies.

“At the end of the day, we don't mind where the talent comes from – if it's WPP or Essence or outside of WPP," said Berube. "We signed up to a concept and expertise required to service us and it will be the work of WPP over the next three months to find us the talent and expertise they promised us."

How L’Oréal will adapt

Though Essence will have to prove it can supply the talent and technology it claimed to have on tap in that final pitching round, L’Oréal will also have to work on its own set-up to be able to keep up with the model.

Berube is confident the “first phase” of its transformation is over. It “modernised” two years ago with the integration of its digital and the marketing function “to reinvent the way of working with agency.”

'Phase two' involves bringing in new processes to make sure there is no friction between agency partners and its internal marketers, which it has been upskilling in preparation for working with an “agency of the future”.

“We can’t expect an agency proposing us new ways of working if we don't change ourselves. We change our ways of working to be more agile, to make faster decisions, to be flexible and to change decisions. This will start with the agency and we’ll have to go through it to be faster, agile, strategic and flexible,” said Berube.

Will the blueprint be taken to other countries?

L’Oréal UK and Ireland is the first region to not only employ Essence as a lead media partner, but to trial a model such as this. Marketers from other markets, then, have their eyes firmly fixed on the output.

“Local marketers choose their media agency," said Berube. "There is no global direction at all – they all need to find the best agency to suit their market and needs. It is the first time that a country globally has signed with Essence and we'll feed the best practices and learnings and lead the way.

"That's a very exciting part of being in the UK. Loreal is a big subsidiary of L’Oréal and we play a key role in innovating and building best practices."

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