In a sign that suggests the LEGO Group may be looking to improve on disappointing US sales figures, the company is reviewing its global advertising planning and buying business, which the company has not done for 15 years.
AdWeek reported the news:
The Danish toy giant works with multiple agencies around the world, and Publicis Groupe’s Starcom has handled its U.S. media business since 2000. According to Adweek’s sources, the pitch is still in its early stages.
A company representative declined to comment, stating, “The Lego Group regularly reviews all contracts with suppliers as a standard business practice. We have no further information to share at this point.”
While the U.S. remains Lego’s largest market, the company has stumbled in recent months after a decade-long turnaround powered, in part, by movie tie-ins. In March, Lego reported flat sales for 2016 despite a major marketing effort that nearly pushed the company past its primary American competitor, Mattel.
It is a big opportunity for marketing firms, as the LEGO Group is of course a large and coveted potential client.
According to parties with direct knowledge of the matter, however, most of the major holding companies are participating in the pitch with Starcom defending. OMD was reportedly unable to compete due to a conflict of interest with Hasbro, which consolidated most of its global media business with the Omnicom network in late 2013.
Kantar Media’s latest numbers have Lego spending approximately $85 million on measured media in the U.S. last year, a significant increase over its $49 million total for 2015. Totals for other markets affected by this review are currently unavailable.
It will be a while before LEGO fans see any impact from a change in marketing strategy, and even longer before it is clear whether it has any impact on sales. With the LEGO Group having had significant year on year increases for a decade, it may be the case that the company’s sales are now naturally slowing.