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Lego will focus on marketing effectiveness in 2018 after posting poor results

Innovative products and more effective marketing will be priorities for Lego this year, after it published poor 2017 results on Tuesday.


Innovative products and more effective marketing will be priorities for toymaker Lego this year, after it published poor 2017 results on Tuesday.

The toy brick company suffered a fall in annual sales for the first time since 2004, with Chief Executive Niels B. Christiansen saying there would be no "quick fix." Revenues were down 8 percent to 35 billion Danish crowns ($5.8 billion) from 37.9 billion in 2016.

"We have a lot of focus around innovative products, so making our great products even better. We have a lot of focus about making the effectiveness of the marketing go up. We are shifting towards digital and we are spending a lot in that area as well," Christiansen said at the results presentation in Billund, Denmark.

A third focus will be on allowing creative teams to make decisions and act more quickly.

But Lego still topped many children's Christmas wish lists, especially in the U.S. and Germany, according to Chief Marketing Officer Julia Goldin. The company's Lego City and Star Wars sets did particularly well, as did Lego Friends, a range aimed at girls, Goldin said at the results presentation.

Lego

Lego's Creator product

Goldin told CNBC by phone that her teams will target keeping global marketing campaigns relevant, especially in terms of creating content quickly after a new product has launched.

"We allow our people to have to have much more flexibility in terms of making decisions… and making changes that they need to, less hierarchies and less processes, but also making sure that they free up their time (so they don't just) create many things ahead of time," she said.

Goldin's teams will also be using data analytics to measure the effectiveness of marketing, and making sure they understand how it can promote different products.

Lego

Children playing with Lego bricks

"We know that in many situations, kids that are interested in Lego City might also be interested in Lego Ninjago. Kids that are interested in Lego Friends might also want to buy Lego Minecraft. And those are the kinds of interactions that can allow us to actually also make sure that our marketing is fully optimized," she added.

The company does not break out its marketing spend, but Goldin described it as "significant." "It's less about the amount of money; it's more about the effectiveness of the content," she said.

Lego's marketing department is made up of around 1,900 people, including incubator Creative Play Lab and an in-house agency.

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