L'Oreal puts £1bn global media account up for review

LONDON - L'Oreal, the world's largest beauty products manufacturer, is gearing up to review its £1bn global media account, shared by Publicis and Interpublic Group.

The company splits the bulk of its global media account between Publicis' ZenithOptimedia and IPG's Universal McCann, but L'Oreal's head office in Paris has instructed its local companies to prepare for a review of media agency requirements.

An auditor has yet to be appointed to assist in the review, although Media Audits represents the company in some European countries, including France.

No timescale has been decided for the review, which insiders believe will be carried out at a market-by-market level, although it is expected to kick off shortly, once local resistance to a review has been pacified.

L'Oreal is the UK's third-largest advertiser, according to Nielsen Media Research, spending £90m above the line. Universal McCann is the incumbent on the bulk of the account; it handles the L'Oreal, Maybelline and Garnier brands, while ZenithOptimedia handles the Lancôme range of cosmetic products.

Globally, L'Oreal is one of the world's ten biggest marketers, with an adspend in excess of $1.6bn. It uses Beyonce as its international brand spokeswoman. Last year, it hired the TV presenter Davina McCall to front a £7m campaign, by Publicis, for the hair colourant Garnier Nutrisse Cream in the UK.

The global creative account is shared by Publicis and McCann Erickson. To date, no decision to review creative has been taken.

L'Oreal is indirectly controlled by Liliane Bettencourt, the daughter of the company's founder, while the foods manufacturer Nestlé also owns a large stake. Nestlé recently concluded a review of its media, which had been split between IPG, Publicis and WPP. IPG was removed from the roster and in the UK the entire account was shifted into MindShare.

Bettencourt's stake in the company has been valued at $12.7bn, ranking her 11th on Forbes' 2004 billionaire list, behind six Walton family members from Wal-Mart.

L'Oreal has distribution in more than 130 countries and for the first half of last year recorded a 6.4% rise in profits to £7.54bn.

The company's "active" cosmetic lines were the best performers -- brands such as Lyposine, for slimmers, and Mormaderm, for acne sufferers, saw a 16.6% uplift in sales. Its consumer products saw more modest growth.

No one at L'Oreal in Paris was available to comment.

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