L’Oréal, Coke and P&G: 5 things that mattered this week

Here is a round-up of some of the biggest stories over the last week in marketing.

L'Oreal

L’Oréal places big bet on artificial intelligence

Ever wanted to buy someone a beauty gift but been unsure what to buy them? Well, L’Oréal is hoping to help with the launch of an artificial intelligence-powered Facebook Messenger bot.

Launching in Canada first, the service aims to help consumers find the right beauty box gift for their friends based on a series of questions that define their friend’s beauty profile and help consumers select the right brand and product mix at the right budget. The company says it hopes to launch the service in the UK in early 2018.

The move is part of a wider drive to produce services for its beauty brands and learn more about consumers. In partnership with startup Automat Technologies, the beauty giant is developing a series of beauty services that will launch in the coming months on the Facebook Messenger platform.

The company’s chief digital officer Lubomira Rochet says the focus on Messenger bots is the latest iteration of its “service strategy”. L’Oréal believes conversational marketing and commerce in combination with AI will allow it to have more personalised conversations with its consumers, and in turn increase sales.

She tells Marketing Week: “I believe AI is as big a revolution as the internet itself. It’s going to power more of our interactions with our consumers, be it through advertising, CRM or even ad serving. All those compartments of marketing will be transformed by AI. It’s a great way to get more personalised than we’ve ever been.”

Coca-Cola to axe 1,200 jobs as it shifts to new ‘cluster’ model

Coca-Cola is axing 1,200 jobs, some of which could be in marketing, as part of wider plans to restructure the business around five “strategic clusters” and re-position as a “consumer-centric total beverage company”.

The job reductions will take place in the second half of 2017 and into 2018 as the company looks to build a “faster and more agile business”. The aim is to reduce complexity, simplify processes and speed up decision-making.

“We are working through redesigning the organisation to be faster and more agile,” said incoming Coca-Cola CEO James Quincey. “The necessary changes will be difficult, but it they will enable us to do fewer things better.”

The cuts are part of a wider restructure at the company as it shifts to what it calls a “category cluster” model. The move will see it focus on five strategic categories – sparkling soft drinks; energy; juice, dairy and plant-based drinks; water, enhanced water and sports drinks; and tea and coffee.

The aim is to ensure Coca-Cola is more disciplined about its investments, with a focus on launching new products through innovation, changing recipes to reduce added sugar and acquiring new brands in categories such as tea and plant-based drinks. For example, Coca-Cola is expanding its premium Smartwater brand into flavoured sparkling waters, while the newly reformulated Coca-Cola Zero Sugar is expanding into more markets.

The hope is this will deliver a further $800m in productivity savings, at least half of which it will reinvest into the company.

P&G outlines new ‘Irresistible Superiority’ approach to product, marketing and in-store experience

Never heard of the phrase ‘Irresistible Superiority’ before? Well soon it could be on the tip of every marketer’s tongue as it is the means by which Procter & Gamble plans to make its marketing more efficient and effective.

The ‘Irresistible Superiority’ programme aims to overhaul the company’s approach to advertising, products, packaging, sampling and in-store promotions. CFO Jon Moeller says its aim is to “raise consumer expectations for the whole category and make it hard to go back to previous competitor products they were using”. It should also reduce the need for promotional spending, he claims.

In terms of what the scheme means for P&G’s marketing, Moeller claims it will raise the bar on the quality of its advertising and in turn create awareness, boost trial and even “define popular culture”.

“We are testing our advertising quality. A campaign must drive growth for a full year, and is judged by a panel. Brands [that currently achieve this] include Always’ Like A Girl and Tide’s ‘If It’s Gotta Be Clean It’s Gotta Be Tide’,” he reveals.

To implement the ‘Irresistible Superiority’ scheme, Moeller says the company is looking to make another $10bn (£7.8bn) in savings this year. Its marketing spend is set to be reduced by $2bn (£1.6bn), which will be achieved by “eliminating media supply waste, reduced agency fees and cutting advertising costs”.

Hopefully that makes it all a bit clearer?

Channel 4 introduces new video ads that call out viewers by name

Channel 4 is introducing a new video ad format that allows advertisers to incorporate the first names of viewers into their ads.

Among the launch partners for what it claims is a “groundbreaking” format are Foster’s and 20th Century Fox, with the latter using it for its new horror prequel Alien Covenant.

So how does it all work? Well, any of All 4’s 15 million registered users who watch an Alien Covenant trailer ad while signed in on a web browser will see personalised messages asking them to “Run…” followed by their first name.

Fosters, meanwhile, will share a video with a pint that ends with the slogan “this one’s for you…” followed by the user’s first name.

“Following the success of the multiple brands taking advantage of our Ad 4 You format, we’re now incredibly excited to offer the market something completely ground breaking,” says David Amodio, Channel 4’s digital and creative leader.

“The most attention grabbing word for anyone to hear is without doubt one’s own name, so to be able to offer advertisers the chance to speak directly to our millions of viewers is not just unique, but an immensely powerful marketing tool which adds even more value to All 4’s increasingly personalised experience.”

Digital dominates as UK ad spend hits record high

The UK ad industry is experiencing the “most seismic shift” in its history as digital dominates growth. According to the latest figures from the Advertising Association and Warc, digital formats accounted for 95% of all the new money entering the market. And this trend is only set to continue.

“The trend will continue as ad tech improves and consumers spend more time with their internet-connected devices,” says Warc senior data analyst James McDonald.

Overall, UK ad spend grew to £5.8bn, a 3.9% year-on-year rise, in Q4, making it the highest grossing quarter since the Expenditure Report started in 1982. It also marks an upward trend following flat growth in Q3 in the immediate wake of June’s Brexit referendum.

For 2016 as a whole, ad spend grew 3.7%, reaching £21.4bn and marking the seventh consecutive year of market growth.

Digital formats continued to dominate, with internet ad spend up 13.4% to £10.3bn for the year. Mobile accounted for 99% of that growth, with ad spend for mobile platforms up a whopping 45.4% to £3.9bn. The report predicts mobile advertising spend will slow over the coming years (2017: +30.4% and 2018: +20.8%) as the current boom dies down.

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