Lenovo and LG India experiment shows that digital investment leads to ROI

Abhishek Saigal, Joe Koshy, Vikas Shah, Shaurab Kapadia / December 2018

With an increasingly mobile, internet-connected population, more brands are turning to digital channels like YouTube and social media to engage consumers. To determine the effectiveness of these new mediums, we worked with GfK to analyze cross-media marketing campaigns for Lenovo and LG over the last two years.

More than 60% of Indian consumers check their smartphones within the first five minutes of waking up and over 30% of smartphone users in India check their phones nearly 50 times a day.1 Indians are spending more time connected online on mobile, and it’s increased the number of digital opportunities that brands have to connect with potential customers.

To determine the effectiveness of these new mediums, we worked with GfK to analyze cross-media marketing campaigns for Lenovo and LG over the last two years.

Turning to media mix modeling to validate media campaign effectiveness

Media mix modeling, a re-popularized concept from the 1960s, measures all the possible factors that drive brand sales across all media and devices. The goal is to understand not just the last touch before the sale but every media moment across the consumer journey that contributes to the eventual sale and external factors (like seasonalities or industry changes) that can affect results.

For Lenovo’s notebooks and LG’s panel TVs, Gfk built a mathematical model to assess how the below variables (including both internal and external data) impacted sales:

  • Paid media: traditional media channels (TV, print, offline display); online media (social media, search, YouTube, and online display); advertisement pressure (gross rating point/target audience rating point, insertion, among others); ad spend (both gross spend and net spend)
  • GfK point-of-sale data: sales volume, sales value, and price
  • External control factors: seasonality and macroeconomic variables (e.g., GDP and inflation rates, among others), where applicable 
  • Offers from competitors, product launches, and price gaps

Using digital drives incremental ROI

The media mix modeling study from GfK revealed that digital advertising takes the helm when driving incremental sales of electronic products in India. The study showed that out of all sales driven by media and promotion, digital contributed to more than 70% of those sales for Lenovo’s notebooks and more than 40% for LG’s panel TVs during the period between January 2016 and December 2017 (Google platforms contributed to two-thirds or more of all digital-touch sales for both products. YouTube on its own contributed to one in every five out of such sales of LG panel TVs).

“This study helped us develop a stronger understanding of our media investments, and I am sure that the learning will aid our team and agencies in driving better optimization and ROI.” — Mr. Amit Doshi, Chief Marketing Officer, India and South Asia, Lenovo

Looking ahead

Sales conversions are always the bottom line, of course, and GfK’s media mix model showed how valuable digital was for both companies. For Lenovo’s notebooks, the digital return was a strong 38 per INR. For LG’s panel TVs, every one INR invested returned an impressive 88 INR.

“This media mix modeling study by Gfk has really helped us get closer to an efficient and optimal media mix. While LG has been a proponent of digital marketing, the fact that digital media drives significantly higher sales impact and ROI than other media is a key business and marketing insight for us that will shape our media planning going forward." — Mr. Rahul Tayal, Director, Strategic Business & Marketing, LG India

While traditional channels continue to have a role to play in the overall marketing mix, streaming options are rapidly disrupting the advertising ecosystem. For electronics brands and retailers alike, the numbers plainly show that digital delivers both efficacy and efficiency.

Malaysia’s traditional businesses use YouTube to catch up to their digital customers