This document discusses three challenges for convergence in digital media: 1. Paid, owned, and earned media are converging rapidly as consumers experience brands across different channels as one. 2. Consumer behavior is changing television advertising as online consumers now rely less on TV to inform purchases and TV viewing rates have declined significantly among younger demographics. 3. Traditional agency structures are under pressure as media agencies aim to build direct engagement competencies, creative agencies expand into paid media, platforms seek more control over user experiences, and software companies enter with technology solutions.

1. Lars Silberbauer
Global Director
Social Media & Search
LEGO
Twitter: @larssilberbauer
Email: lars.silberbauer.andersen@lego.com

2. Three Challenges for Don Drap
Convergens in Digital Media
2. Consumer behaviour is changing TV
advertising
3. Traditional agency structures are under
pressure

3. Owned
Paid
Earned
Consumers’ interactions with
brands used to be simple
But the way consumers interact
with brands is rapidly changing
to a converged model
Past: TV or print media
Now: Converged media that
consumers experience as one
#1 Paid, Owned and Earned have converged, and will, continue to
converge at a rapid pace

4. Owned
Paid
Earned
#1 Paid, Owned and Earned have converged, and will, continue to
converge at a rapid pace
Consumers’ interactions with
brands used to be simple
But the way consumers interact
with brands is rapidly changing
to a converged model
Past: TV or print media
Now: Converged media that
consumers experience as one

5. Owned
Paid
Earned
#1 Paid, Owned and Earned have converged, and will, continue to
converge at a rapid pace
Consumers’ interactions with
brands used to be simple
But the way consumers interact
with brands is rapidly changing
to a converged model
Past: TV or print media
Now: Converged media that
consumers experience as one

6. Studies have shown that
consumers who have been
exposed to real time marketing
on top of traditional approaches,
have a much higher propensity
to buy, recommend, or feel
positive about a brand.
Source: GolinHarris study, 2012
#2 Real Time Marketing is Having a Huge Impact on the Consumer

7. Real Time Monitoring -> Real Time Actions
Search Advertising
Content Optimization
E-Commerce Optimization
Anti-Competitor initiatives
PR and damage control
Real Time Amplification
Forecasting

9. Example: Let’s Build – Brand Campaign
Drive a campaign in real time, across paid, owned and
earned

10. During X-Factor shows
Saturday evening
60 sec TV commercial is
being aired.
Highly emotional brand spot
targeting families/dads
Comsumers instantly
start talking about LEGO
and the advert on Twitter
LEGO enters the
conversation and
amplifies the
conversations across
Paid, Owned and Earned
Drive people to a Facebook
application for increasing
engagement and collecting
permission
Consumer Journey

18. Real Time Marketing: Amplifying Engagement across Paid,
Owned and Earned.

19. The Challenges for Don Drap
Convergens in Digital Media
2. Consumer behaviour is changing TV
advertising
3. Traditional agency structures are under
pressure

20. TV is Dead Changing
Only 18% of online consumers now use TV to
nform their purchasing decision

21. TV viewing dropped 8% from 2012-13,
the third year in a row it has declined
and the biggest drop so far…
Netflix has 6% of total viewing in
Denmark, making it the third largest TV
station, tied with DR1
Streaming represents 12% of total TV
viewing and 17% of Danish households
are now Netflix customers
There has been a 12% drop in TV viewing
amongst 21-40 year olds, amongst those
that use streaming services the drop was 25%
During peak hours Netflix accounts for more than
thirty per cent of all Internet down-streaming
traffic in North America

22. The Future is Already Here... It’s just not evenly distributed
Based on LEGO’s own YouTube channel data we can see differences in
mobile adoption amongst different markets globally…
16% Tablet / Mobile 63% Tablet / Mobile 80% Tablet / Mobile
Expectations
for 2016: 30% 75% 90%

25. LEGO TV & YouTube

26. Average 1.2 Million Daily Views
320.000 Subscribers
Localized in 15 Markets

27. The Challenges for Don Drap
Convergens in Digital Media
2. Consumer behaviour is changing TV
advertising
3. Traditional agency structures are under
pressure

29. Media
Agencies
Creating/Buying
Engagement
Competencies and
pushing them to
clients
Creative/PR
Agencies
Building paid media
competencies to
amplify their content
and messages
Platforms
Having direct control over
the access to the consumers
platforms continue their
quest to maximize returns
without sacrificing growth
and user experience
Software Companies
Entering the market with
technology solutions that
enables brands to gain
direct control over their
media buy

30. Big Brands and Platforms

31. Facebook Stickers
150 Million Stickers Shared in 2 Months

36. The Challenges for Don Drap
Convergens in Digital Media
2. Consumer behaviour is changing TV
advertising
3. Traditional agency structures are under
pressure

37. Lars Silberbauer
Global Director
Social Media
LEGO Group
Twitter: @larssilberbauer