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PROMOTIONAL FEATURE: Why science is good for LG Electronic's brand

In the second marketer interview brought to Marketing by Yahoo!, IPA president Rory Sutherland talks to LG head of brand Paul Meadows about why digital marketing is set to become the electronics giant's lead medium

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Yahoo! combines the science to understand and target an audience, the art to create lasting engagement through context and the scale to realise your ambitions. 


LG Electronics has come a long way in the past 50 years, from its inception as Lucky Goldstar, a transistor radio maker in South Korea. Today, LG operates in 88 countries and has a product set that spans 3D TVs, mobiles and home appliances. A scientific, insight-driven approach to marketing is the fuel behind that growth, as LG head of brand marketing, Paul Meadows, tells IPA president Rory Sutherland.

What does LG stand for as a brand?  
Paul Meadows As a consumer electronics business, the challenge is to strive to deliver an emotional connection of consumer benefits, and that is summarised in our belief that ‘Life’s good’. We try and strike a balance between functional needs, fashion and technological innovation in our products, which range from TVs to refrigerators.

Is there a consumer appetite for a ‘Life’s good’ message at this time?
It’s my biggest challenge right now, as there are so many things in the world that challenge that idea. But it’s a challenge that I embrace.  

With the rise of digital marketing, is advertising now more a science than an art?
It’s a bit of both. Consumers are bombarded with so many messages that you need a great consumer proposition to stand out. We are media-neutral, so we don’t necessarily choose advertising first. It can be a great way to start telling the story, but then we aim to move the conversation online and let consumers take control. ‘Life’s good’ is a great starting point to open up a dialogue in the digital market. And there’s nothing like a great campaign based on true consumer insights.

How do R&D and insight intersect at LG?
Innovation is at the heart of our business. We have an insight lab in Seoul, a purpose-built study environment where we can observe how people interact with technology in the home. It has a kitchen, a dining room, a bedroom and a simulated car. Here we discover how you make the optimum TV viewing experience or how space plays an important role in certain rooms.

What proportion of LG’s marketing budget is taken up by digital?
In 2011, it will be close to 20%, and considering that two years ago it was less than 5%, that’s massive growth. There will come a point when digital is the lead medium, whereas TV was always the default first choice.

How local can you be with digital?
Very! We create global advertising and then localise it. LG’s internal digital team manages the website, the blog and Facebook in partnership with our agencies. The global architecture and branding of the sites are the same, but the creative face is tailored to the local market in terms of look and feel.

How does LG extract insights from digital data?
We spend a lot of time following and seeding conversations about technology within our own blogs, and showcasing technology at events. In particular we’ve tracked the evolution of the story of 3D and how that has become the saviour of the TV industry.

Is there such a thing as an ‘LG customer’ who buys across your entire portfolio?
There is, actually. It’s someone who enjoys life and wants to get the best out of cutting-edge technology at a great price. We’re probably talking about families who work hard and for whom time is important. Their weekends are distinctly different to their weekdays and the kids are central to that equation. I’m not talking about pester-power, but children do play a role.

How does LG use digital in its CRM strategy?
You have to look at the customer value chain, life stages and lifestyles – and where products cross over. It’s the age-old need to get people to buy into the brand and not lose them at the other end through an unreliable product. Our push next year will be about talking to dedicated groups of people – trying to drive advocacy and loyalty in those groups. We share our homes much more with our friends, and if we have someone being positive about an LG TV or washing machine, that’s advocacy that money can’t buy.

What’s the secret to precise targeting on the web?
We have an opportunity as a business with our website, which had 10m-plus visitors this year, to start to communicate to pockets of people. It’s not so much ‘build it and they will come’, but more that you’re offering the right messages so that people will engage with you.

Which digital brands do you admire?
The variety that digital content publishers offer is second to none, and that ability to invite consumers to come to your brand is something we’ve always longed for. Google and portals like Yahoo! make my life very easy and give me answers quickly. I can understand where my brand is in the world and that’s very powerful.  

What’s your favourite bit of digital creative?
It’s got to be our mobile-phone idents showcasing the capability of LG smartphones while sending up what young people are doing with phones today.

What does ‘integration’ mean to LG?
It means having a consistent message across multiple channels, to the point of driving consumer preference to the LG brand. You have to be disciplined from the outset – from the advertising idea through to retail experience in-store and on to the website. Ideas must work on multiple platforms.

Are agencies set up to deliver this?
There is a growing trend of full-service agencies, but I believe in specialism. The challenge is how you bring agency teams together, and that’s my role as head of brand. I spend a lot of time with my agencies – Mindshare, Publicis Modem, LG One and Y&R – to make sure they understand our business and people. There may come a time when the one-stop shop is right for LG, but right now it’s great to have channel specialists.

You’re looking to add to your global digital agency roster. Why now?
We are always looking for people who can bring innovation, information and results. LG UK has seen a mini explosion of digital activity in recent times and it’s delivering great results. Great creative, thought-leading insight and the ability to take ‘Life’s good’ to the next level is a challenge we have set in the UK market.

Does a payment by results model make sense to you?
Absolutely! I understand that agencies are in the business to make profit – we’re in that business, too. In my early career we used to say ‘make money and win awards’. Now it’s about making money and building the brand. Creative ideas that deliver results are what really matter. There has to be an incentive for people to work harder for better results.

What is your message to agencies?
We’re happy with ours because we work hard on relationship-building at a personal and business level. In general, agencies need to remove some of the barriers and agendas, be media-neutral and focus on the common goal. We encourage sharing of information and a lot of our success has come from that.

What brands inspire you?
Nike is making dreams come true for wannabe footballers and athletes all over the world. What they’re doing in the digital space is impactful.

‘Behavioural economics’ refers to the anomalies of human behaviour. Does this theory have any resonance for you?
I take a fairly simplified view whereby brands play a very important role in providing opportunity, excitement and engagement, particularly in the technology space. There is so much research done into our products and so much communication to the target audience, that if the products are not relevant, then that’s our fault. I’m sure the [behavioural economics] debate will rage on, but we’ll just carry on with our business.

What inspires and excites you right now?
I am really excited about technology converg­ence. LG is well placed with our range of smart­phones and smart TVs, and 2011 will see an explosion of new technology. We’re also excited to see the growing trend of families reconnecting, such as Saturday night TV viewing experiences. Consumers are increasingly interested in improving their homes, and technology helps to bring fun and innovation to them.


CVs

Rory Sutherland, president, IPA and vice-chairman, Ogilvy Group UK

Sutherland was elected president of the IPA in 2009, the first direct marketer to hold the post. He joined Ogilvy & Mather Direct in 1988 and was made executive creative director of OgilvyOne in 2002. He was president of the Direct Lions Jury at Cannes in 2007 and won the Andi Emerson Award at the New York Caples Awards for services to DM in 2009.

Paul Meadows, head of brand marketing, LG Electronics

Meadows was brand manager at Vauxhall from 2000 to 2004, when he became head of brand communications at 3. As sponsorship director at Samsung in 2005, he helped broker the brand’s kit deal with Chelsea FC. In 2006, he moved to Disney ABC TV as European marketing director. Meadows became head of brand market­ing at LG in 2008.

About Yahoo!

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