Calif. Lottery Kicks Off Review

As expected, the California Lottery has issued a request for proposals as it opens a review for its ad account, kicking off what is likely to be one of the most closely watched and hotly contested West Coast contests of the year.

California Lottery spent $35 million on ads last year and nearly $100 million in major measured media from 2006-09, according to Nielsen. The contract now up for grabs will run for five years with a two-year extension option.

The lottery’s current lead creative partner, BBDO West in San Francisco, and its media shop, PHD in Los Angeles, both units of Omnicom Group, are expected to defend, the lottery said. The shops’ contracts expire on Jan. 31, 2011.

Several other ad-related assignments, however, are not in review, including Hispanic chores (with Casanova Pendrill); Asian efforts (Time Advertising); African-American outreach (Muse Communications); and promotions (Alcone Marketing).

The winner of the business will to some extent be tasked with a rebuilding mission, as the lottery’s sales have slipped in each of the past three fiscal years. Sales totaled $2.96 billion in 2009 after hitting an all-time high of $3.59 billion in ’06, before the recession took hold.

Given those numbers, it’s not surprising that shops pitching the business should be ready to answer questions such as: “How do we re-engage with lapsed players?” and “How can we segment our audience more effectively and broaden our player base?” according to the RFP.

Making the games “a critical part of [consumer] conversations and social currency” is also a key, the RFP says.

To pitch, agencies must have a California presence, at least 50 employees, $12 million in annual revenue and 15 percent of the work must be in the digital sphere.

Initial submissions are due by July 6. Semifinalists will be chosen July 20, with a field of finalists set on Aug. 17. A winner will be named Oct. 27, with the new contract beginning that month or in November.

The lottery’s recent review history is complex and convoluted. In 2001, Omnicom’s DDB was awarded the business before a protest by WPP Group’s Grey prompted the commission to put the business back into review. Interpublic Group’s FCB (now part of Draftfcb) won the assignment next, but DDB contested media costs submitted by FCB and its partner Initiative.
The commission then rebid the media portion of the account, which IPG’s McCann Erickson won, but that decision was rescinded over disclosure issues. More tumult followed until ultimately, in April 2004, BBDO and PHD were awarded the assignment.