Lottery vs. local ad firms

November 26, 2007
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The Hoosier Lottery has rejected all bids for the creative part of its advertising account. Most of the bidders were local, and the agencies involved are miffed that they were passed over.

In this weekendâ??s IBJ, reporter Anthony Schoettle quotes lottery spokesman Andrew Reed as saying the recent addition of several marketing-savvy employees played into the decision.

In her Dear John letter to the companies, Executive Director Kathryn Densborn said none of the bidders could offer â??all the capabilities the Hoosier Lottery was seeking in connection with its overall marketing program and strategy.â??

Local ad execs are stunned. The execs say the rejection by one of the stateâ??s largest accounts could send a negative signal about the local ad industry.

Is the lottery underestimating the capabilities of the local ad community or wisely saving taxpayer dollars? Whatâ??s your take?
  • This is yet another example of an effect of the brain drain in Indiana. Our truly creative minds are being driven out at a record pace by lack of opportunity such as what just happened. What motivation does the tv/film student graduating from Ball State have to stay in Indiana when no large local companies will hire local agencies (Pacers, HH Gregg), and now not even the largest advertising account in state government will hire local? Consider this the death knell of local ad agencies, as well as pouring gasoline on the fire under the local creative folks fleeing for points elsewhere.
  • While this may be a side story in the brain drain, the real issue is that it is simply wrong. Since when should a state agency be allowed to spend taxpayer money in another state? Oh the lottery is self funded so not really a state agency you say? I guess the Indianapolis Convention and Visitor Bureau or Indianapolis Downtown or the Indiana Chamber of Commerce could all claim the same thing since they are all independent of the government and receive miniscule if any funding from any government agency. Can you imagine the press if the Indiana Chamber said that no Indiana firm was able to handle some need? Or the ICVA? We should allow the lottery no less public outrage. I couldn't care less what political platform or background the director has, and why it was in the article detracts from the issue. When a state granted monopoly exists, and the lottery is a state granted monopoly in case you were thinking of starting your own lottery, they should be mandated by law to use only in state firms to provide all services. What would happen if every Indiana citizen decided that instead of playing the Hoosier Lottery, we would only play Powerball because the Hoosier Lottery could not offer us all the capabilities are seeking in a lottery? How long until the executive director was pleading that we give the Hoosier Lottery fair play? This director should be ashamed of her decision, and even more ashamed of her hiding behind a form letter to deliver the news. If you are going to take this seat, be prepared for the heat and make those calls personally. Otherwise, expect no sympathy because none is deserved.
  • I think Jeff missed the point. They requested bids from MOSTLY local agencies which means some bids were from outside the state but they rejected ALL the bids. No other companies outside the state benefited from this decision.

    I don't see what the big deal is if the lottery can hire their own talent to develop the campaigns they need. Those hires did not contribute to brain drain but rather put them on an Indiana payroll.
  • We complain when the Lottery doesn't support Indiana's talents, yet we jump all over the IEDC's grants to companies associated with Scott Jones. Does that make sense? Our number one goal should be supporting the talents that exist in our state. Our second goal should be attracting talent to move to Indiana.
  • If we don't bring tallent in, the idea of Brain Drain will continue. Before obtaining my current Job in Indiana, I applied to companies over on the west cost and in florida. Even though I received a degree within this state, I was not going to be bound by any state until I received that first job.
  • After the initial shock of the news that the Hoosier Lottery has decided to not engage with any of the bidders for the creative portion of its advertising, most will come to understand some of the logic I see in this decision. The statement was that NONE of the agencies can provide ALL of the capabilities the Lottery is seeking. This is true of many agencies and not just in Indianapolis. Some agencies are strong in print, others in interactive, others industry specific and so on.

    Just as most talent typically specialize their skills- so do most agencies (Which often allows them to target their prospects better and focus internal resources efficiently.) I think it may make sense in many ways for the Lottery to bring the work in house so that they have much more creative control while reducing costs and ensuring their strategy is implemented across the board. The talent is here in Indy for any small or large scale marketing campaign, what the Lottery did not see in its bidders was an agency that was a central location for all the skills required to see their strategy to fruition.

    Part of developing and implementing any strategy, marketing and otherwise, is to make tough decisions based on the strategy of the organization and the resources at it’s fingertips. Bringing the work in house and hiring Talent to develop, cultivate and implement new strategies and reducing costs allows the Lottery to put more money towards all of the programs it supports while employing Hoosier Talent. Now let’s hope this is the case.
  • Until we know the level of talent within the lottery, we are not really in a position to criticize this decision. If indeed they have the talent already in-house to accomplish their advertising and marketing objectives, then go for it. Many local agencies are pricing themselves out of the market. It sounds like this may be a way to save the state a sizeable sum, and get the same end result. If that is the case, go for it, and pay no nevermind to the naysayers, their interests are self-interests. Agencies aren't exclusive on employing creative talent, they may very well have some talented individuals at the Lottery. So, the knee jerk reaction here is outrage, but until more is known about the players involved, it is time to move on.
  • Most full-service agencies did not bid on this because of the time and expense of
  • When considering the talent within the Hoosier Lottery, first consider the new director whose background consists of politics, education and residential real estate - not very applicable to gaming marketing experience. Her appointment was given through political contacts, not through her sterling advertising knowledge.

    Then consider the creative content (or lack thereof) of the totally forgettable TV and radio spots the Hoosier Lottery has approved over the past few years. Does anyone remember any of these spots? With their questionable creative premise, poor talent casting and sketchy production values, I doubt it.

    If the Hoosier Lottery felt bringing the creative in-house was a viable option, why didn't they review the agencies' services versus have them make full account pitches? This would have saved a lot of agency man hours and allowed them to present their services most applicable to the Lottery's needs.

    I question the validity of Bill's claim that many local agencies are pricing themselves out of the market. Doesn't the client have the final say on what fee, commission or project cost arrangement is made with their agency? If an agency's costs are too high, they don't get hired. Simple.

    My knee jerk reaction to this whole situation is one of bemusement. The Hoosier Lottery staff is acting like a big-shot account. The Indiana ad agency community is suitably miffed.

    Now here's what would be interesting: have the spurned agencies band together and work for the state casinos on a campaign that promoted gambling on the slots and casino tables as your chances of winning are much greater than the gazillion to one odds the Hoosier Lottery offers.
  • While all of these points have some validity, many may not be relevant to this discussion at all. By inferring ignorance or some presumed political motives on the part of the Lottery, the local ad community risks putting ourselves in the same desperate category as labor unions and domestic auto manufacturers, who rally around the cry of buy local because it's your duty to support us (regardless of the quality). Even if we win by putting pressure on the Lottery or other government agencies to use local talent, we lose because the decision is based on obligation rather than merit.
    In the end, the decision of what agency(ies) to use is an economic one -- even if it starts out as a political one -- based on achieving marketing objectives. If what Mike and Phil say is true, and I think it is -- that many full-service agencies didn't even bid, and that the Lottery's decision was based on finding the most effective way to use resources to achieve strategic objectives -- then agencies who were not selected (i.e., all of them) should graciously acknowledge that it was a strategic marketing decision based on the breadth of capabilities needed. Then they should either develop those capabilities themselves or demonstrate to the Lottery (and other prospective clients) how they can provide a better return on investment than an in-house solution can.
  • I agree with Mike. Same thing with the designs of new buildings, the narrow-minded vision of some of our local companies. Take for example the Circle Truss discussed, and most of the new buildings that will heopfully adorn the skyline. Most, if not all, are local architechts and are drab boring, and not aww-inspiring. I think maybe it would do the city some good to hire some companies from outside the state. Let them surprise the residents and see what can actually be accomplished in this city. Then the local companies will take note, that you need to step up your game. Our local companies are shooting for mediocrity and the quick dollar. None of them are taking risks to really transform this city. And it's sad. Our company trys local, and when we can't get the quality we are looking for and any other Local Company should deserve - we look elsewhere.

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