L’Oréal Infuses Online Advertising with AI

L’Oréal Canada is expanding its chatbot capabilities beyond Facebook

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L’Oréal Canada is expanding its chatbot capabilities beyond Facebook.

On a mission to transform its business into a digital-first company, L’Oréal Group recently hired 2,000 digital experts, and it’s making data-driven marketing and advertising a key focus, according to Lubomira Rochet, global chief digital officer at L’Oreal Group. In 2017, digital made up 38% of L’Oréal’s overall media spend.

“We [are] seeing applications of AI shifting from test-and-experiment to being table stakes,” said L’Oréal Canada chief digital officer Robert Beredo.

Working with AI-chatbot company Automat and one of Google’s ad platforms called AdLingo, L’Oréal will be able to interact with consumers through display advertising on approximately 1 billion websites. According to Baredo, L’Oréal Canada is currently deciding how much it wants to invest in the chatbot ads, as well as which websites and customers it will target.

The ads incorporating chatbots will look similar to those the brand uses on Facebook. Customers who choose to engage with the brand through Facebook Messenger will first be asked to pick what product category (face care, body care, sun care or hair care) they are interested in. Then they will be guided through a more complete skin diagnostic before the chatbot provides product recommendations, dermatological advice and product explanations.

Still, there are mixed feelings from consumers about chatbots. A January 2018 study from Salesforce found that 53% approved pf them but the satisfaction significantly deteriorated based on the complexity of a consumer’s needs. Only 33% of people reported being satisfied when registering a complaint through a chatbot, and only 28% said they were satisfied when it came to receiving a detailed or expert answer. Meanwhile, software company Pegasystems Inc. found in its Oct. 2018 study that there were also mixed perceptions: The majority (58%) of people in the survey ranked their chatbot experiences as merely ‘adequate,’ doing some tasks well and others poorly, while 18% found chatbots ineffective or annoying.

Despite the mixed reviews by customers, L’Oréal Canada wanted to expand its Automat partnership because it saw positive results from its Facebook Messenger chatbots. The average interaction between customers and chatbots lasted upward of eight minutes, which is four times longer than average customer interactions with L’Oréal ads on a landing page or brand website. In addition, e-commerce sales were 35% higher for customers who had interacted with a chatbot compared to those who had not.

Baredo explained that the move would allow the company to be closer to its customers saying: “It is about deepening the relationship with the consumer that extends beyond the hard sell.”

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