As privacy regulation gains steam across the world, and Apple, Google, and Facebook make their platforms more private, advertisers are scrambling to figure out the implications for their businesses.
L'Oréal says it is prepared for the shift, though, since it has prioritized direct relationships with its customers by doubling down on creating digital experiences that people want to engage with. The brand said it has made this a priority in recent years, and accelerated its efforts since GDPR went into effect last year.
"We all need to get better at our first-party data," L'Oréal's global chief digital officer Lubomira Rochet told Business Insider during an interview at the Cannes Lions International Festival of Creativity. "And for us, that first-party data is acquired through building relationships with trust and through a service."
L'Oréal has made acquisitions and investments to deepen those relationships and collect first-party data, something that has become important to marketers as Google restricts cookie-usage for ad tracking on Chrome, Apple limits third-party tracking, and Facebook veers toward private communication.
L'Oréal gathers data on people in a few ways
In March 2018, it acquired ModiFace, a company that builds custom augmented reality applications for makeup brands. ModiFace applications such as Virtual Makeover and Hair Color let users try different makeup and hairstyles in real time.
In the process, users provide personal information, including their name, address, and age. L'Oréal also gathers data such as time people spend with particular content, how much they engage with it, and products they try with the virtual tools.
Personalization is another way L'Oréal has gathered consumer data. Through a tech incubator, L'Oréal has created "Le Teint Particulier" for Lancôme, which creates foundation matched to people's skin tone, and "My Skin Track UV," a wearable device that measures UV exposure. The company says it now has more than 1.3 billion first-party data points.
Still, collecting data is one thing, but managing it is a challenge for a lot of marketers who have traditionally relied on outside parties to do it for them. L'Oréal said it has been trying to beef up its media team to understand the landscape better.
The company says its try-on tools have led to increased sales
And while people say they're increasingly concerned about how their personal data is used, according to Rochet, people don't mind sharing their information because they're getting something in return. L'Oréal uses the data it has on people to come up with customized offers such as samples or coupons. She said adding technologies like ModiFace on its platforms has led people to spend double the time there and sales conversion rates to triple.
"Every piece of data is meaningless if there is no consent, and if there's no value exchange," she said. "When you take a skincare diagnostic test on my platform, for example, I get to know a lot about you in terms of your concerns and signs of aging, which is very valuable information not only for me but also for you. Having these services lets me get to know you and put the right products in front of you versus targeting you with products that mean nothing to you.
Rochet said that for brands trying to grow their first-party data in an increasingly privacy-oriented world, a way to add value is to make their websites hubs for experiences and services, rather than endless product pages.
"Me retargeting you forever because you spent five minutes on my website is not OK, but me targeting you based on content that you engaged with, with a very specific message as a follow-up, or a coupon or content like a tutorial makes sense, because it gives you something more than an ad," Rochet said.
