IBJNews

Lottery manager ramping up advertising budget

Back to TopCommentsE-mailPrintBookmark and Share

The Hoosier Lottery’s new manager plans to launch a branding campaign in the spring as part of a business plan that calls for a significantly larger advertising budget.

That could be good news for Indiana ad agencies, seven of which are competing to work for Providence, R.I.-based Gtech Corp., which struck a 15-year management contract with the Indiana Lottery Commission on Oct. 12. 

Gtech spokeswoman Angela Wiczek wouldn’t disclose the names of the seven firms, but she said they all have offices in the state.  

Four of the seven agencies currently work for the lottery, which spent $10.2 million on advertising in the fiscal year ended June 30. Creative work is split between Boyden & Youngblutt of Fort Wayne and MeyerWallis, which has offices in Indianapolis and Milwaukee.

Optimedia International, a subsidiary of Publicis Groupe, which has an office in Indianapolis, handles media strategy, while Asher Agency, which has an office in Fort Wayne, buys media.

The lottery spends about 1.5 percent of its sales revenue on advertising, marketing and promotions, but Gtech contends that it will need to spend more money to make more money.

“The appropriate advertising spend can significantly optimize the revenue potential of the lottery’s portfolio,” the company states in its initial business plan.

The exact size of the planned marketing budget remains under wraps, but Gtech said it will increase “significantly” to support all its efforts around a brand re-launch and new-product promotions.

Gtech promises to bring the state income of $410 million by fiscal year 2017. That would be 80-percent increase over the $227 million that the lottery reaped in the year ended June 30.

Gtech doesn’t take full control as manager until July 1, but it’s already laying the groundwork as part of a transitional period in its contract.

During the transitional period, Gtech will spend $7.25 million more on personnel, technology and marketing than the lottery had budgeted for fiscal year 2013. Gtech will recoup those costs through the annual management fee that the lottery must pay, starting in fiscal year 2014.

Wiczek said Gtech is working on the brand transformation now, and it will hit the market in March or April. The first new-product launch is set for April. Gtech could hire one or more of the seven competing agencies, which are due to make presentations on Nov. 15, she said.

Gtech’s marketing plan calls for less concentration on television advertising in favor of a multi-platform strategy, including more promotional events. The business plan hinges on expanding the player base, so the branding effort will try to engender warm, fuzzy feelings about the revenue the lottery provides to Indiana.

“It is important to develop a sense of heart and passion for the lottery among the Indiana adult population, and to progress from the lottery being a random entity to being part of the fabric of the life of the community,” Gtech’s business plan states.

One step toward that goal will be post-jackpot promotions that call attention to the revenue generated by Powerball and Megamillions. Gtech said it might even publicly present the governor with a check to the state. “This ‘good-will halo’ will make players feel good about their purchase and look forward to playing again,” the company says.

Hoosier Lottery advertising account used to be a plum contract — for recognition as much as fees. Then, in 2005, the lottery began partnering with other state agencies on media-buying services and awarded a smaller advertising contract to a Louisville-based firm, Bandy Carroll Hellige. The former Roman Brand Group, which had been the lead agency since 1999, didn’t bid on the work.

The local advertising industry hasn’t been enthusiastic about lottery work since that time, said Bruce Bryant, principal at Promotus.

The lottery seems to take a project-by-project approach to advertising, Bryant said. “It’s clear that it’s been just getting along,” he said. “I don’t think they’ve had real serious strategy sessions.”

ADVERTISEMENT

  • Big Rigging Is Illegal
    It is doubtful GTech will be taking over Hoosier Lottery management in July. The Justice Department investigation and bid rigging lawsuit will certainly void this misguided backroom deal.
  • Wait for it
    It'll be interesting to see where this account actually lands. It's been my understanding that Gtech pitched the business wanting to use an out-of-state advertising agency, but now they're saying they're bidding all Indiana shops? My bet (no pun intended) is that the winning shop will be an out-of-state agency that sets up a storefront office in the state, so that it looks like the money is staying here, but it's actually just passing through on its way elsewhere.
  • Why advertise?
    I have never understood why the Lottery needs to advertise at all. Would people not play if they didn't see an expensive TV ad in prime time, or visit the spinning wheel at the State Fair? I doubt it.
  • Yay!
    More of the money that should go to public uses, if we insist upon maximizing lottery revenues, instead going to enrich private firms. If we want expanded gambling, let's just legalize it and open it to competition from anyone and everyone rather than providing a monopoly to a privileged few. But if you're going to maintain a monopoly so you can presumably limit the availability and negative social impact of gambling, then the revenues should stay with the public. There are so many mixed messages in these rushed effforts to pray at the altar of privatization or "public-private partnering".

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. In reality, Lilly is maintaining profit by cutting costs such as Indiana/US citizen IT workers by a significant amount with their Tata Indian consulting connection, increasing Indian H1B's at Lillys Indiana locations significantly and offshoring to India high paying Indiana jobs to cut costs and increase profit at the expense of U.S. workers.

  2. I think perhaps there is legal precedence here in that the laws were intended for family farms, not pig processing plants on a huge scale. There has to be a way to squash this judges judgment and overrule her dumb judgement. Perhaps she should be required to live in one of those neighbors houses for a month next to the farm to see how she likes it. She is there to protect the people, not the corporations.

  3. http://www.omafra.gov.on.ca/english/engineer/facts/03-111.htm Corporate farms are not farms, they are indeed factories on a huge scale. The amount of waste and unhealthy smells are environmentally unsafe. If they want to do this, they should be forced to buy a boundary around their farm at a premium price to the homeowners and landowners that have to eat, sleep, and live in a cesspool of pig smells. Imagine living in a house that smells like a restroom all the time. Does the state really believe they should take the side of these corporate farms and not protect Indiana citizens. Perhaps justifiable they should force all the management of the farms to live on the farm itself and not live probably far away from there. Would be interesting to investigate the housing locations of those working at and managing the corporate farms.

  4. downtown in the same area as O'malia's. 350 E New York. Not sure that another one could survive. I agree a Target is needed d'town. Downtown Philly even had a 3 story Kmart for its downtown residents.

  5. Indy-area residents... most of you have no idea how AMAZING Aurelio's is. South of Chicago was a cool pizza place... but it pales in comparison to the heavenly thin crust Aurelio's pizza. Their deep dish is pretty good too. My waistline is expanding just thinking about this!

ADVERTISEMENT