California Lottery Review Faces More Controversy

LOS ANGELES The contest for the California Lottery’s five-year, $125 million creative and media account took another turn today as two of the finalists in the review opted not to submit new cost proposals and one shop made moves to file a protest, sources said.

The lottery had asked the four finalists, including Los Angeles agencies DDB, McCann-Erickson, and the incumbent, Grey, as well as San Francisco shop Foote, Cone & Belding, to submit new bids for the media portion of the account [Adweek, Feb. 24]. DDB and Grey officials confirmed that they did not participate in the rebid. While sources said DDB has taken steps to file its second protest, agency president Rick Carpenter declined to comment and the reasons for the potential protest could not immediately be determined.

The rebid followed an initial protest from DDB over the lottery’s selection in July of FCB. At that time, DDB claimed media costs submitted by FCB and pitch partner Initiative Media in Los Angeles were not plausible.

Regarding the decision not to participate in the rebid, Carpenter said, “We believe the addendum calling for a rebid does not comply with the rules governing competitive bidding. Since the lottery has chosen to follow through on this addendum, we have decided not to lend legitimacy to the process by submitting cost proposals at this time.”

Carpenter added: “The introduction of this new scoring methodology now gives everyone other than FCB a zero percent chance of winning this competition. The perverse irony is that the lottery is an expert in statistics, odds and probability.”

Grey president John Crosson echoed Carpenter’s statements on the scoring methodology, saying that is “mathematically impossible” for any agency but FCB to win the account. “It would be superfluous to fill out the form,” Crosson said.

FCB and McCann did submit new cost proposals, sources said. Officials at those two shops declined comment.

Lottery representatives did not return calls.

The lottery’s ad agency search has been riddled with controversy. The search initially kicked off in October 2001. Following two separate reviews and two protests, DDB, then FCB, was selected, pending approval from the lottery commission. Grey protested the first decision, which led the lottery to put the account back in review. Following FCB’s selection and DDB’s protest, the lottery opted to rebid the media portion of the account. However, in October 2002, DDB sent a letter to lottery director Joan Wilson, stating that if the media portion of the account were rebid, the shop would file another protest and seek legal action challenging the failure to disqualify FCB.

For the rebid, agencies had initially been asked to submit revised cost proposals to the lottery by Feb. 27. However, the lottery said it received a high volume of complex questions from the agencies about the RFP addendum it issued and pushed back the due date for the costs proposals to March 5. The lottery has said it would identify a successful bidder by March 11 and hold a lottery commission meeting in April to approve the decision.