California Lottery Rebids Media Despite DDB Threat

For the California Lottery, it remains to be seen whether the third time is the charm.

The lottery has asked the four finalists in the review for its five-year, $125 million creative and media account to submit new bids for the media portion of the business that show costs calculated using the same method.

The RFP addendum, issued to Los Angeles shops DDB (pitching with OMD), McCann-Erickson (Universal McCann) and incumbent Grey (MediaCom), and to Foote, Cone & Belding in San Francisco (Initiative Media, Los Angeles), follows two separate reviews for the business, in which DDB, then FCB, was selected pending the lottery commission’s approval.

Both decisions were overturned due to protests by Grey, which claimed its competitors did not provide adequate information about their media partners, and DDB, which charged that the media costs submitted by FCB were implausible.

While the addendum was expected, it came after threats from DDB that such a maneuver would lead to further protests. DDB in October sent a letter to lottery director Joan Wilson stating that if the account’s media portion were rebid, it would “ensure that there will be another protest … and ultimately lead to a judicial proceeding challenging the failure to disqualify FCB” over what DDB alleged was FCB’s submission of inaccurate cost information [Adweek, Oct. 7].

Lottery contract administrator Shannon Gordon said DDB’s threat had no bearing on the decision to issue the addendum. “The letter was what it was,” said Gordon. “It was certainly a statement of their position.”

Gordon noted that the letter was sent before DDB received the revised cost sheet.

DDB officials could not be reached.

The addended media RFP contains a number of changes. Rather than asking agencies to submit actual costs for buys for other clients, the lottery is now asking for cost proposals for itself. The addendum also notes, “The cost per point rates proposed will contractually obligate the winning bidder for the duration of the contract subject to any adjustment for inflation.”

The addendum also asks agencies to provide cost-per-point proposals for more dayparts for Los Angeles and San Francisco than specified in the original RFP. The document reveals that in Los Angeles, KCAL is guaranteed 25 percent of the TV buy in that market for carrying The Big Spin and the SuperLotto Plus draws. In San Francisco, KPIX is guaranteed 27 percent share of the buy in that market.

While media submissions will again account for a total of 30 points, media costs now count for 16 points and compensation for 14 points. Previously, media costs counted for 20 points and compensation for 10.

Gordon declined comment on the changes to the RFP.

Sources argued that the entire process is unfair since the agencies enter the rebid knowing their competitors’ scores (FCB scored 94 out of a possible 100 points in the previous review, while DDB had 71 points, Grey had 69 and McCann had 62).

“Foote Cone is in the enviable position of knowing they’re so far ahead, they could theoretically jack up their compensation,” said one source. “There’s no pressure on them to be competitive.”

Another source, however, said this is still “anyone’s game” since the RFP is so specialized.

Agency officials either could not be reached or declined comment.

The four finalists were asked to submit questions to the lottery last week. The revised cost sheets are due Feb. 27. The winner is expected to be identified by March 5, with the contract expected to take effect May 1.