Mini case study – Lego’s Digital Strategy

Posted on August 9th, 2010 by Tim Aldiss

The Lego Group provides a good example of innovative marketing with private-label media. The company has built an extensive set of consumer touch points using its own digital media: a fan club, a social network, online games, message boards, online movies, and soon its own massive multiplayer game. On www.legofactory.com, consumers can design their own products. By joining a network of approximately 120,000 self-identified volunteer designers, fans interact, suggest product ideas, and become “ambassadors” to spread the word about new offerings. In this way, Lego facilitates direct conversations between the company and its consumers as well as conversations among the brand’s devotees.

For Lego, the private-label media strategy is paying dividends. Lego has become a major digital brand in the U.S., rivaling traditional media players such as Nickelodeon and Cartoon Network Online in its core demographic of boys ages 6 to 11. This digital marketing innovation is one of the contributors to Lego’s recent success — the company posted a 19 percent increase in annual sales in 2008, despite a declining market for toys global.

Taken from Harvard’s wonderful Strategy & Business Blog: The Promise of Private-label Media

And while we are on strategy here is another great quote from the same article:

Everyone in media and advertising knows that creativity is critical to a high-quality branded environment. But creativity alone does not drive conversion or return on investment. Successful private-label media efforts are grounded in insights into how consumers navigate digital media, the types of utility or services they associate with a marketer’s brand, and the kinds of experiences they willingly seek out. Furthermore, an effective private-label media strategy also fits into a marketer’s overall game plan for digital innovation. It’s not a stand-alone effort.