Beauty companies dial up online marketing strategies

Drug Store News, June 23, 2008

With the majority of U.S. households connected to the Internet and interactive marketing spending in the United States projected to more than triple in the next five years, what is to make one think that beauty companies aren't also looking to plug in?

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"There have been some significant breakthroughs that have really helped marketers re-engage or market in a different way to the most valuable communities of people they are trying to get to," Kevin Kells, national industry director of consumer packaged goods for Google, said during a press event held earlier this year at its New York office.

Kells, who joined Google more-than two years ago to help brand marketers drive more effective advertising solutions and connect more brand assets via Google's multifaceted platform, has 15 years of experience in the consumer goods space. Over the years, he has managed and grown brands at Unilever (Pond's), Diageo (Guinness) and, most recently, worked as vice president of marketing for Almay cosmetics at Revlon.

But one doesn't have to just take Kells' word for it. The barriers between traditional and interactive marketing are in fact melting, and interactive marketing spending in the United States is projected to hit $61 million by 2012, according to a recent study by Forrester Research, a technology and market research company.

The forecast is based, in part, on a survey of 344 interactive marketing professionals and their budget decisions affecting display ads, search, e-mail marketing, online video and emerging media (social, mobile and advergaming).

More specifically, the study found that mainstream marketers are turning to search marketing, which is expected to grow the category at a compound annual growth rate of 26 percent, to $25 billion, by 2012.

Online video will experience a 72 percent increase in ad spending to $7.1 billion by 2012 as more consumers adopt online technology.

Meanwhile, mainstream adoption will boost spending in such emerging channels as social media, mobile, game marketing, widgets, podcasts and RSS, according to Forrester. Spending on social media alone will grow to $6.9 billion, as marketers understand how to use and measure this channel.

Forrester stated that such changes not only impact the budget structure of marketing organizations but also give "interactive marketing professionals a more legitimate seat at the marketing table."

Such trends are already evident in the mass-market beauty industry as several companies, including L'Oreal USA's Softsheen-Carson, Johnson & Johnson Consumer Products (Melt Away Stress line) and Unilever (Dove), have recently launched online campaigns and revamped sites to make them more interactive.

In a separate example, Unilever's Dove worked with Google on a test to expose consumers to Dove Ultimate Clear deodorant advertising while they surfed and searched through Google's ad network and on google.com. Campaign assets included flash banners, click-to-play video and text ads. The Dove campaign was taking place just as Google was acquiring YouTube in November 2006, so video was not a large component of the campaign.

Based on the target audience for Dove deodorant, Google picked more than 200 specific sites across its content network that fit the target audience and selected another 100-plus vertical channels-such as lifestyle, entertainment and fashion--to place such content in hopes of reaching female shoppers.

The results: More than 25 percent more dollars were spent on the total brand and 96 percent new buyers entered the total brand, according to Nielsen/NetRatings data from December 2006 to March 2007. Incremental dollar impact to the total brand was significant, as for every $1 invested with Google, consumers spent an incremental $1.43.

In a more recent example, Galderma Laboratories, the makers of the Cetaphil skin care brand, teamed up with Walgreens earlier this year for an online promotion for the new DailyAdvance Ultra Hydrating Lotion.

"Our mode for promoting new products is through the dermatologist and through the pediatrician, so we had 200 reps who were going to be taking the product in February to the dermatologists and pediatricians. But we wanted to get it moving and start to gain momentum before the launch, so we decided to partner with Walgreens to do that," said Cindy Kee, product manager for Cetaphil.

To tell brand users about the new product first, Galderma turned to its online Cetaphil Skin Care Club, an online marketing program developed four years ago by Integrative Logic. Using the online communication, beauty shoppers were told that the new product was available at Walgreens and directed them to a store coupon available in Walgreens' Easy Saver coupon book in stores. The coupon offered $2 off on the purchase of the Cetaphil DailyAdvance Ultra Hydrating Lotion. Beauty shoppers also could learn more about the new product online and use a skin care assessment tool to learn more about their skin's needs.

During the promotional period, the company exceeded its sales goal with Walgreens by 674 percent, which Galderma directly attributed to the membership of the Cetaphil Skin Care Club.