February 15, 2007 / 5:49 PM / 14 years ago

L'Oreal slowly moves ads from traditional media

PARIS (Reuters) - L’Oreal, one of the world’s biggest advertising spenders, is slowly moving its huge promotional budget away from traditional media but said on Thursday markets should not expect any quick dramatic shift.

The cosmetics giant whose adverts for Maybelline make-up, Elseve shampoos, Lancome perfumes and other brands fill television screens and glossy magazine pages around the world, said Internet spending remained for now proportionately low.

“We are of course changing the way we spend our money on advertising,” Patrick Rabain, head of the consumer products division told a conference with analysts and reporters on the company’s 2006 results.

“Typically for the retail consumer division we used to spend something like 75 percent on TV, 20 percent or more on print and the rest on billboards, etc.,” he said.

“We will move away from the traditional media spend, but we are being careful because you have to be sure you are being more efficient. It’s quite clear ... things are changing,” he added.

L’Oreal’s advertising and spending budget rose some 9.5 percent in 2006 to 4.783 billion euros ($6.29 billion). A large chunk goes on point of sale promotional work rather than adverts alone.

L’Oreal last year centralized its media buying in Europe to get more bang for its buck and is looking at new media too.

“What we are doing is experimenting,” Rabain said.

L’Oreal last year launched in France a men’s fragrance for Cacharel, Amor pour Homme, relying heavily on a blog to generate interest in the brand in order to save money, the company said.

It said the web page generated more than 2 million visits and the perfume was able to capture more than half a percentage point of the French market — one of the world’s most competitive — in a matter of months.

Rabain told Reuters after the results presentation: “We do still spend very little on Internet (advertising), something like 1 percent. Maybe next year it will be 2 percent.”

The founders of Skype recently launched a new Internet television start up called Joost which they said had attracted interest from advertisers including L’Oreal’s Maybelline.

Rabain declined to discuss what other initiatives L’Oreal may be planning.

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