Lego considers bringing more media in-house after appointing Publicis One to handle global media

It’s currently interviewing to fill the role of vice president of global media activation, a position that will coordinate Lego’s internal marketing efforts and those of its media agency. According to Claire Waugh, svp, markets and channels marketing at the Lego Group, the company is reviewing which areas of its media spend might be brought in-house as part of broader “marketing transformation” effort.

In September, the company reorganized the teams responsible for media activation, previously managed by regional executives, into a single global unit. “We need to make sure that we’re modernizing and ensuring that we’re scaling up, and also bridging and elevating our digital capability,” Waugh told Digiday in an interview for this story.

She declined to say whether the company aimed to achieve specific cost reduction on its media spending, or identify specific channels it was targeting for in-house management.

Lego, which reportedly spends $469 million a year on media, already manages programmatic and search media spending for its direct-to-consumer business. Waugh declined to say how much it spent on programmatic and search related to its DTC business, but said it accounted for “a significant portion of our overall media investments.”

“We’re already doing it [in-house media buying] in one channel,” she said, adding that the company was now “looking at, what does the full ecosystem of performance, search, social, look like for us? Where does it really make sense for us to in-source or in-house? And where does it not?”

Waugh said it’s currently examining “every component” of its media supply chain to explore which other channels it should have “intellectual ownership” over and which are better left to its media agency.

Is Lego an outlier?

Marketers at many of the industry’s largest-spending advertisers have considered the benefits — and difficulties — of in-housing media buying in recent years. It’s become “pretty common” for advertisers in the market for a new agency to shop with future in-housing in mind, Tom Denford, CEO of agency intermediary ID Comms Group told Digiday.

“At least half of [the] media pitch briefs we’ve seen in recent years include some form of ambition on the part of the advertiser to ‘expand their internal media capabilities’ over the course of the agency agreement,” Denford said in an email.

Waugh said Lego had sought out the advice of other companies about their experience of media in-housing. “We’ve spoken to a lot of external brands, like Nike [and] like P&G,” she said, without providing specific details.

Denford said he expected to see more advertisers incorporate their in-housing aspirations into agency reviews in coming years as an “ongoing trend.”

Lego holds an envious position in the toy market, but it’s been quietly spending significant amounts on “strategic initiatives” intended to future-proof its business, including digital capabilities. Though the company hasn’t disclosed specifics or the size of the investment kitty, its latest annual report said that spending on strategic initiatives caused operating margins to fall from 27.3% in 2022 to 26% in 2023.

Ryan Kangisser, managing partner, strategy, at MediaSense, said that it was unsurprising Lego was expanding its in-house media operation. “From a DTC perspective, for a company that has dipped their toes in previously, it feels like a natural evolution,” he said.

“Do you look at them as a traditional brand, or actually a highly DTC, first party, data led organization? By that archetype, it shouldn’t be surprising.”

Which areas might Lego bring in-house?

Waugh was keen to signal that Lego was at the beginning of its transition toward in-housing. “We’re in the early stages,” she said. “The time to kind of fix the roof is when the sun’s shining.”

Though advertisers such as Georgia-Pacific have brought everything but TV buying in-house in recent years, she suggested Lego would likely stop short of a “full throttle” approach. “When people talk about in-housing, we often think about the full throttle… that may not be the right decision for us,” she added.

Though earlier in-housing efforts among advertisers prioritized cost-savings efforts around paid social and programmatic buying, Jane Lacher, senior consultant and head of media at consultancy R3, suggested that brands would increasingly begin building up their expertise in media strategy.

“Let your agency buy TV. If you’re Lego, or any other big brand, the way you should be thinking about in-housing has got to be how you bring your media or your channel strategy closer to your creative and content strategy,” Lacher said.

“Why would you want to do media operations? You’re a brand builder. You’re a brand maker. No, that’s a waste of your time. But hiring really smart social strategists, channel strategists, people that understand platforms and creative content… that’s the media you want to bring in house.”

There’s no suggestion that the company’s exploration of in-housing would reduce the role of its media agency Publicis One. “We chose them for their game-changing capabilities especially in data and tech, strong media buying power, robust agency network, and readiness to be a transformational partner to us,” said Waugh.

The media agency, part of Starcom, replaced Lego’s previous media shop Initiative. Publicis Groupe didn’t respond to requests for comment by time of publication.