About the Company
Based in Denmark, LEGO is a privately managed company focused on developing children’s creativity and innovative skills through games and fun learning. The company is owned by the Kirk Kristiansen family who founded it in 1932. The company has a huge global reach and currently provides toys, experiences and teaching material for children in more than 130 countries. LEGO has come a long way over the past 80 years from a small carpenter shop to a big, modern company which is the third largest manufacturer of toys globally. The vision of LEGO has been ‘Good Quality Play’ which enriches a child’s skills and eventually leads to a stronger foundation for the adult life ahead. The idea of games and plays being a major factor in a child’s development and growth has been the underlying base for all the LEGO products.
In the short run, LEGO wanted to increase traffic to its e-commerce website (www.shop.lego.com) during the holiday season and if we talk about the long run, the company wanted to expand itself to Europe and North America and there was no better option available than the digital medium. Hence they decided to go ahead with extensive paid search engine campaigns across various channels.
According to LEGO, the world’s children spend five billion hours each year playing with LEGO bricks. LEGO had a very large target audience to cater to and it was not a task as easy as it seemed to reach all those children in different parts of the world and each part having a different market. Every market has its own preferences, needs, style of living, festival seasons and language. It seemed impossible to reach out to such a wide audience using a single search engine campaign. Thoughts started emerging about different style of campaigns across different type of markets so that it gets well with the target audience and generate more number of leads. This was the biggest challenge faced by the company in terms of deciding on the campaign design consistent with the objective.
Executing The Idea
The company started the execution of idea by using search engine marketing campaigns to increase traffic to its e-commerce website www.shop.lego.com during the peak season. The company ranked top on the search engines for the keywords they paid for, which ultimately led to an increase in traffic to the website as well as overall sales. They initiated the plan by paying for the top position on search engine using Overture (formerly www.GoTo.com) as a technology partner. LEGO was able to target customers interested in purchasing gifts for children by using Overture’s technology. The company was successful in fulfilling two main aspects:
- Reaching out to the people searching for LEGO products on different search engines so that it eventually help retain the old customers.
- It was also successful for reaching out to the people searching for Non LEGO specific terms such as “Toys”, “Toys Store” and “Harry Potter” so that it led to acquisition of new customers who searched for the related products.
LEGO has worked on around 20 search engine marketing campaigns since 2005. Their campaigns have been market specific catering to the local preferences of the target audience. They initiated the campaigns with linguistic profile of each product, category and sub category keeping in mind the seasonality of different markets, offline marketing, strategic, revenue and other long term goals. Building on the results from the campaigns conducted by them, they identified the terms or say keywords with the highest returns on search engine and translated them into the best native language equivalents for campaigns in Germany, France, Spain, Italy, Portugal and the Netherlands. Then they headed towards search engines with the highest returns locally in the European Union, including Ciao in the U.K., France and Germany; Kekoo in France and Germany and Billinger in Germany.
LEGO has consistently managed to exceed the expected revenue generation since 2005. The main reason for the same is that it has been successfully able to cater to the local preferences of the people and getting into the minds of the target audience. The overall results for this campaign were quite unexpected and mind-boggling with a ROI of over 1000%. It was undoubtedly one of the best and the most successful online campaigns executed by LEGO. The top keywords had a conversion rate of over 10% and over 7% of orders during peak season which were originated during this campaign.
By 2010, LEGO grew their search engine revenue and exceeded their yearly target by 10%. The North American and European revenue surpassed the yearly goal by 10%. The North American clicks also increased by around 60%. In Germany, clicks increased by around 39% and in France, clicks increased by 33%. European impressions also saw an upsurge and it increased by around 35.4% in response to their highly aggressive bidding strategy. They also initiated business-specific practices for LEGO’s paid search campaigns, including seasonal, product launch and promotional targeting, resulting in a noticeable increase in conversion and the average order value.
There is quite a lot of learning from the strategies successfully adopted by LEGO. Some of which are mentioned below:
- Search Engine campaigns should be market specific
- Campaigns catering to the preferences of target audience have higher conversion rate
- Paid marketing can lead to exponential increase in the number of clicks
- Paid marketing can thus lead to overall increase in sales
- Search engine marketing is one of the most successful forms of online marketing tools
- Google Analytics used simultaneously while executing PPC campaigns can lead to better reach in terms of target audience
- Localization of search engine marketing campaigns can generate high number of leads
Image Credits: LEGO