L’Oreal used to love big hair – now it loves big data
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L’Oreal used to love big hair – now it loves big data

Cosmetics giant L’Oreal is pursuing data over who buys what, why, and how much, in an effort to close the gap with big online retailers. The company’s data acquisitions and partnerships team, headed up by Aruna Paramasivan, uses its own (fairly limited) data from Ecommerce sales alongside “more scaled” data sets from Sephora and partners like Amazon, to build “internal audience segments” whose future behavior it then models. This complex strategy has a definite aim: to close the gap in data quality when it comes to media activation (what ad space to buy for various marketing campaigns), and the measurement of those campaigns’ performance.

L’Oreal’s share price has appreciated by 22% so far this year


SOURCE: Yahoo Finance

Talking about the requirements – and frustrations – of her role, Paramasivan told listeners at the IAB Data Symposium earlier this month that “you want at least a million consumers per segment”, highlighting the difficulty in building reliable models. This is a hurdle that third parties – like big online retail sites that stock L’Oreal’s products – can help the company jump with relative ease. But analyzing how campaigns are performing is a more daunting prospect – partly because of data quality, but also because analysis and innovation tend to pull in different directions. Paramasivan said:

“It’s frustrating for us because the attribution and measurement decisions right now don’t have the granularity and data quality we’d like. What’s the fidelity of the data signal? How close to the direct consumer and to real time is the data? There's always something new in this space, so supporting existing campaigns while also staying current in an innovative environment is critical.”

Ultimately, she has no doubts about the importance of the work. Big data is a crucial part of the information economy, that lets forward thinking brands get an advantage over their slower moving counterparts (just look at the online retail world for proof of this factor). That’s why Paramasivan is clear about nurturing the environment that will lead to better data: “At the brand level, you’re very dependent on your ecosystem and the technology system holding it up.”


Dominion holds L’Oreal in its Global Trends Luxury Fund.

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