Why Lego is ‘upping the ante’ on its in-house creative agency

Lego is “upping the ante” on the level of creativity and innovation it can drive as it ups its focus on its in-house creative agency and takes a more global approach to media.

Since global CMO Julia Goldin joined from Revlon almost four years ago, Lego has been building new in-house capabilities particularly in creative, media and data analytics. It now produces the vast majority of its creative internally, meaning Lego is “ahead of a lot of other players in the industry”.

Speaking to Marketing Week, Goldin says bringing creative in-house has been key to improving efficiency and effectiveness, not just in marketing but across the business. It offers the ability to react more quickly to trends or fix things that aren’t working, but also to ensure the agency is working to the same strategy as the rest of the marketing team, she says.

At Lego, the agency head is part of Goldin’s leadership team and “interacts on an hourly basis” with people across the business, from product marketers to media, planning and social media teams. Goldin believes that provides two clear advantages: integration and speed.

“The [in-house team] provides two things. One is complete integration – same goals, same agenda, the ability to solve problems very quickly, much greater learning across the organisation. And most importantly what that leads to is they are more agile and responsive to the marketplace,” she explains.

That is not what our agencies are rewarded on – getting more out of the client. They are reward on being more productive.

Julia Goldin, Lego

“For example, if you have an asset that is not working, or we need an additional asset because we have a product that is super popular and we want to develop something else, we can do that very quickly – move the resources or address the problem.”

The in-house agency is also empowered to have more of an impact across the business rather than simply being judged on an ad campaign. It has the same KPIs as the rest of the business, meaning it is judged on the number of children Lego reaches, productivity, development of talent, and working to Lego’s strategy.

“Their success is the full product experience, not just the success of their ad,” says Goldin. “We don’t put the KPIs in the same way a client would to an agency. As a client to an external agency we can’t tell them ‘I would like your success to be tied to my overall growth’ because the agency will say, ‘I don’t have influence over sales or product’.

“Secondly, externally the agencies look at their own margins and how much they charge the client, how many hours they dedicated to the project. That is not what our agencies are rewarded on – getting more out of the client. They are reward on being more productive.”

Developing a global marketing strategy

Lego recently reviewed its media strategy, opting for a global strategy for the first time and appointing Initiative as its first global media agency. While many brands have been reviewing media in the wake of issues such as brand safety and transparency, Goldin says Lego’s decision came about more from a need to position Lego as one brand globally.

“We have a big portfolio with many different products, but we have one brand. Really understanding the interaction between all the different products and the brand and understanding where our audience is means starting with the kids and what they are into, and with the parents and what occasions are relevant,” she says.

“Ultimately, because we have a global portfolio, we want to make sure we develop a global plan and to do that we need to have a global view. [That is because] our ability to have a global plan makes us significantly more effective and more efficient because we can go to market with all the right tolls in our toolbox and we can think through and help the markets execute the best possible plan.”

Digital is hugely important to Lego’s media strategy as a key way to reach children and drive the experience of the brand. It has more than 7 million consumers engaging with its social media channels every day and has its own app, Lego Life, with more than 6 million downloads as looks to build its own digital ecosystem for kids.

“[We are trying to create] a true digital safe space for children where they can interact, upload their creations, connect with others but always moderated to ensure it is a safe interaction,” Goldin explains.

“[Transparency] has always been very high on our agenda because we target kids. The number of channels we use [to advertise] is very limited – we are not widely [advertising] on YouTube.”

This focus on the customer experience and creativity has meant Lego has needed to both upskill its current team and bring in new people. Goldin has hired people from agency as well as digital backgrounds as she looks to build a more diverse marketing division, although she admits that hasn’t been without challenges as Lego looks to maintain its own culture while at the same time adapting to new ways of thinking and working.

We have experienced supernatural growth, but when you are experiencing that it is sometimes difficult to see what is going to be the next wave.

Julia Goldin, Lego

“Diversity of skills and company experiences and ways of working [is really important]. Our company was not used to running ‘sprints’ but having people who come from creative fields like agencies and the tech world that is how they work. But unless you train the organisation to understand why sprints are important and how to use them it’s like oil and vinegar, it doesn’t work,” she says.

When Goldin joined Lego three-and-a-half years ago it was, as she admits, “in the last of its phase of supernatural growth”. It had been growing double digits every year, but has more recently struggled for revenue growth. In 2017, it posted its first revenue decline for a decade, prompting a widespread overhaul of the business.

Goldin says that to position Lego for future growth it is increasingly focused on the “holistic, immersive experience for consumers”. That means Goldin’s position encompasses product and marketing, which she describes as a “really big shift” for the company. And product is not just Lego that customers can buy, but services as well, such as Lego Boost that teaches kids how to code the creations they have built while at the same time teaching them skills they might need in the future.

“We have to innovate across the whole experience from product to marketing, the whole value chain. We have experienced supernatural growth, but when you are experiencing that it is sometimes also difficult to see what is going to be the next wave,” she concludes.

“We have now come to a point where we are really active to the new wave of growth. It doesn’t have to be supernatural we just want to make sure we are reaching more kids and we stay relevant and engaging. That creates a lot of hunger in the organisation. We are really focused on ensuring we can harness the creativity and the potential in our people.”