How Cosmetics Giant Estee Lauder Leverages Social Media on a Global Sc

**Waqas** · August 30, 2011

The Social CMO Series is supported by the Discover Digital Group, a unique consultancy that focuses on identifying new e-revenue opportunities for both Fortune 1000 and startup clients alike. Follow DDG on Facebook to get a taste of the insights that are offered.

Estee Lauder Companies owns several of the most digitally-forward brands in the beauty category, several among them Clinique, MAC, Bobbi Brown, Aveda, and Estee Lauder proper.

Clinique, for instance, was one of the first brands to add ecommerce to its site in the late ’90s. Meanwhile MAC, which has been widely heralded for its frequent, multi-platform social media campaigns, boasts more than 2.2 million Facebook fans — more than any other cosmetics brand in the world.

In May, Estee Lauder acquired Smashbox Cosmetics, in part to leverage “Smashboxâ€™s expertise in digital and social media to advance its current capabilities, an important and growing competency for the company,” group president John Demsey noted. Profits were up 72% for the quarter ending June 30, 2011.

Mashable spoke with the president of the Estee Lauder Company’s online division, Dennis McEniry, to understand how the organization conceives and executes digital strategies on a global level, and what the holding company has planned going forward.

Q&A With Dennis McEniry, President, Online, Estee Lauder Companies

What role does digital media play, broadly speaking, when people are thinking about purchasing beauty products?

It plays a huge role. It’s one of the key parts in [a consumer's] journey in discovering product. Women looking for beauty information is always in the top five searches on Google or YouTube.

What role does social play within that?

It [also] plays a huge role. The number one influence on beauty consumers in every market around the world is advice from friends. With [social media], not only are they able to get timely brand information directly from brands, but also all of the validation from authorities and friends. You can go to Bobbi Brown on Twitter and get tips and advice throughout the day, for example.

In addition to [major global networks like] Facebook and Twitter, we also have country-specific networks that are important, local players like Orkut in Brazil and RenRen in China.

And because [social media] allows for two-way communication, it’s also valuable for getting great feedback. We can use it find out what consumers like and don’t like, how we can get them the latest information, how we can improve our products, etc.

â€œSocial media is delivering in the top five traffic sources for every one of our brands.”

Now, Estee Lauder is a holding company, and most digital and social campaigns are driven by individual brands. How is marketing handled at the corporate level?

Our model could be summed up as “brand-led, locally communicated.” What different corporate groups get involved in is scale and corporate capabilities, providing the tools and education they need.

Look at Estee Lauder brand in China as an example. We’re using a global platform and tools, but implementing [our marketing strategy] locally in China with Chinese communication and language service, from the Estee Lauder brand.

What percentage of your marketing budget is allotted to digital right now?

We don’t really strategize that way. We have announced that we’re putting double-digit increases into our spend for digital marketing, but what each brand then does in terms of its own mix is different depending on market that they’re in. All of our brands are spending on digital and television in their own particular mix.

What kind of returns are you seeing on your investments in social media?

It’s still early. The number one thing we’re looking for is engagement. We’re looking for evidence that people are interacting and become even more loyal to the brands. And then we’re looking at traffic referrals and [sales] conversions.

Right now social media is delivering in the top five traffic sources for every one of our brands, and social media consistently overindexes in terms of conversions.

‘Engagement’ is a term that gets thrown around a lot. Why is it valuable?

There’s a lot of different ways of looking at that. We’ve done a number of studies measuring what we call influencers, what they do in terms of education and influencing people in their network, how they interact with each other and their overall impact on the business.

What we’ve found is that influencers have a huge amount of pull on total business, much more outsized than what they individually buy.

And how do you target influencers?

We do it in different ways, largely by working with different bloggers and people who are huge fans of ours. Earlier this year MAC worked with nine different beauty bloggers to design their own makeup collections, for example. And some of our brands have insiders clubs that they use for everything from early-stage product development to getting feedback, ratings and testimonials.

What role does traditional advertising play in your media mix? Do you see a day when all your marketing communication is 100% digital?

Traditional is still important, but it’s becoming a different blend.

When you look at it across all our portfolio, TV and digital are the highest priorities. Television is becoming even more important for most of our brands than it has been in the past. And of course all of our brands are doing digital and doing a lot more with digital than in the past.

Print is still a big priority with our largest brands like Estee Lauder and Clinique, but they’re changing the mix.

Why TV? Why now?

Primarily because we can reach such a broad number of consumers at once.

What we’re focusing on now is fewer, bigger and more successful launches. That means fewer newer products, and then advertising them in a much bigger, much more effective way. We’ve cut away dozens of programs where the spend wasn’t as optimized.

Where have you done most of your hiring lately?

We’re hiring across the board for everything from senior marketing in brands to engineers.

The biggest change in the last two years is hiring in social media, particularly experts in social media. There aren’t a lot of people with seven to eight years of social media experience, so we’ve brought many in from different industries. We’ve also done a lot of training internally about social media.

Second, I would say we’ve added to our general marketing skillset.

Third, we’re hiring people with international experience because we’re on a huge ecommerce and commerce expansion across the world.

What trends are you watching going forward?

The biggest trend we’re watching is mobile. For some of our brands in bigger markets like Japan half of our sales are on mobile devices, and generally speaking we’re seeing unbelievable growth rates around the world.

We’re also researching how mobile is affecting real-world retail, [particularly] how consumers are using mobile phones for interacting with and getting product knowledge at the point of sale, both at counters and in salons. We want to know how to make that mobile-enabled experience as good as possible and how to market to consumers in mobile.

After all, no one leaves home without their mobile phones anymore.

Series Supported by Discover Digital Group

The Social CMO Series is supported by the Discover Digital Group, a unique consultancy that focuses on identifying new e-revenue opportunities for both Fortune 1000 and startup clients alike. From developing new digital products to generating new audiences and revenue for existing online products, it creates smarter, more effective solutions for your business challenges. Follow DDG on Facebook to get a taste of the insights that are offered.