WPP has retained L’Oréal’s £106m UK and Ireland media planning and buying account after shaking up its proposition and switching from incumbent Wavemaker to sister agency Essence to lead its defence in the review.
Essence and WPP beat Dentsu Aegis Network’s Carat in a fiercely contested final round of the pitch, having previously seen off Publicis Media and the7stars in the first round.
L’Oréal said Essence would help the beauty brand to "advance" its "digital innovation capabilities".
"L’Oréal’s ambition to become the leading beauty tech company, delivering beauty as a service to millions, one at a time, has been the guiding principle behind the media agency review process," the company said.
"The partnership will see the formation of Beauty Tech Labs – a dedicated client-agency team powered by Essence’s and L’Oréal’s technology, operational expertise and talent with seamless access to insights, knowledge and resources from across WPP.
"The integrated team will enable real-time collaboration, enhancing the intelligence and agility of L’Oréal’s marketing as the company transforms the online and physical shopping experiences it offers consumers."
L’Oréal, which calls itself the world’s biggest beauty business, launched the UK and Ireland media review in November 2018.
Wavemaker was the incumbent but Group M, the media buying division of WPP, brought in sister agency Essence to refresh its offer after L’Oréal signalled at the outset of the review that it wanted to take a more digital approach.
Essence has made its name as a digital and data-driven agency, with strong tech and coding capabilities, and it counts Google as its top client.
WPP also drew on Wavemaker personnel and resources from the wider group in the pitch, multiple sources said.
Some of WPP’s heavy-hitters, including Kelly Clark, global chief executive of Group M, and Karen Blackett, UK country manager of WPP, took part in the process in WPP's determination to hold on to one of the company’s largest UK media accounts.
L’Oréal is Britain’s fifth-biggest advertiser, spending an estimated £106m in the 12 months to September 2018.
Building Beauty Tech Labs
Gayle Noah, media director of L’Oréal UK and Ireland, who led the review, said: "We would like to thank all of the agencies who took part in this rigorous review process.
"There is significant talent and great thinking in the market, and we were privileged to see it throughout the whole review.
"We are delighted to appoint Essence and look forward to working with them and building Beauty Tech Labs together."
A source added the ambition for Beauty Tech Labs is that WPP will "partner like a tech company, not a holding company, making client and agency silos a thing of the past" and giving L’Oreal’s marketing and media teams direct access to Essence’s project management software and technology.
Vismay Sharma, managing director of L’Oréal UK and Ireland, said: "We’re proud to be a leading beauty tech innovator and digital-first company, and will always push ourselves to do more to transform the beauty experience for both consumers and the category at large.
"This newly formed partnership with Essence and WPP ensures we continue to push those boundaries, evolve as a business and grow together through better, technology-driven consumer experiences."
The French beauty brand has used Group M for media planning and buying in the UK since 2014, when Maxus won the business from Publicis Groupe.
Group M shifted the account at the end of 2017 to Wavemaker, a new agency created by the merger of Maxus’ assets with MEC. The rest of Maxus’ UK staff moved to Essence and a handful of those executives bring experience of working on L’Oréal.
Tim Irwin, chief executive of Essence EMEA, was previously chief operating officer at Maxus UK, where he spent two decades, until moving to Essence at the start of 2018.
Irwin said: "We are excited to help L’Oréal in the next phase of their transformation journey and share a deep-rooted belief in using technology to create better experiences for customers.
"We're not only looking forward to building a new model for client-agency collaboration, but to setting new standards for what is possible in data analytics and media innovation."
Blackett said: "WPP is thrilled to provide L’Oréal with a different way of working and an agency model built for the future. The creation of Beauty Tech Labs delivers that: the best of WPP’s offering, anchored in Essence."
Aperto One, the strategic and commercial consultancy, advised L’Oréal on the review.
L’Oréal reported strong global growth in the first quarter of 2019 but warned investors of "lacklustre" growth in western Europe, "particularly" in the UK as uncertainty over Brexit persisted.
The UK and Ireland operation, which started trading in 1932, employs 4,760 people.
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