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STRATEGIC MARKETING AND SALES COMMUNICATIONS PLAN Fiscal Year 2012 November 2011 TABLE OF CONTENTS Overview and Summary EXECUTIVE SUMMARY........................................................................................................................... 3 COLORADO LOTTERY MISSION AND FY12 GOALS .................................................................................. 5 SITUATION ANALYSIS ............................................................................................................................ 6 COLORADO LOTTERY SWOT ................................................................................................................ 9 KEY MESSAGES.................................................................................................................................. 11 Research – Executive Summary, Goals, Objectives, Strategies and Tactics ………………………….14 Product Marketing – Executive Summary, Goals, Objectives, Strategies and Tactics…………..…….17 PRODUCTS ......................................................................................................................................... 17 SCRATCH ........................................................................................................................................... 20 JACKPOT GAMES ................................................................................................................................ 26 Mega Jackpot Games: Powerball and Mega Millions .................................................................. 27 Lotto ............................................................................................................................................. 31 MatchPlay .................................................................................................................................. 33 Cash 5 .......................................................................................................................................... 34 Corporate Marketing – Executive Summary, Goals, Objectives, Strategies and Tactics…………….. 35 Retailer Relations – Executive Summary, Goals, Objectives, Strategies and Tactics…………...…... 46 Reference SWOTS ............................................................................................................................................. 52 CORPORATE IDENTITY ........................................................................................................................ 68 PRODUCT REVENUE AND CONTRIBUTIONS ........................................................................................... 70 LOTTERY GAME PLAYERSHIPS, DEMOGRAPHICS AND AUDIENCES ......................................................... 72 RESEARCH ......................................................................................................................................... 78 POINT-OF-SALE .................................................................................................................................. 84 EXECUTIVE SUMMARY Fiscal year 2011 saw many accomplishments by the Colorado Lottery, allowed the staff to make progress on important initiatives, and positioned the organization to be even more effective in FY 2012. Achieving a new sales record of over $518.9 million is perhaps the most notable of a long list of accomplishments. Among many other achievements include launching a new website which has over 1.1 million visitors a month and executing one of the largest second-chance drawings in Colorado Lottery history, perhaps only rivaled by the State Fair ticket entry promotion. Lottery staff worked with Cactus Marketing to create 14 marketing initiatives in support of the launch of Scratch and Jackpot games. The retooled emphasis on social media has begun to show signs of success with more than 9,300 fans and followers on Facebook and Twitter. As part of a very active outreach program, the Lottery executed a Protect Your Prize education and awareness campaign and remained very active in Problem Gambling Coalition of Colorado. The improvements, enhancements and new communication tools will all combine to make FY 2012 an exciting and successful year for the Lottery. However, the year promises to have many significant issues the marketing and sales groups will have to manage, and manage well, for the organization to achieve strong proceeds to support the various causes around the state: the basic mission of the Lottery. Economy. The economic conditions for the state continue to be hard on most residents and these residents make up the Lottery playership base. The recession-like times have forced many people to limit their normal Lottery spending. The near-term outlook for the economy is cautiously optimistic, but the recovery rate is forecasted to be slow. $2 Powerball. On January 15, 2012, the price of a Powerball single-board play will go from $1 to $2. While all of the research conducted indicates there will be some decline in spending by players, it also indicates the game will have faster growing and higher jackpots. If these are accomplished, the game will produce increased proceeds for Colorado. Managing the rollout of the $2 price point is critical to consumer acceptance of the price change and improved features of the game. Mega Millions. Colorado has the perfect option for players who do not want to spend the $2 for Powerball but still like the excitement of playing the large, multi-state jackpot games. Mega Millions has been in the marketplace for over a year, but consumer acceptance of this game has fallen far short of original expectations. Mega Millions will remain at $1, has large jackpots, and basically plays just like Powerball. Raffle. During FY 2011, the Lottery offered two versions of a raffle game. The first one, which was sold over the holiday period of calendar year 2010, was a success. It sold completely out. However, the second game, which was sold during the following early summer timeframe was not a success. When the drawing was held on July 1, there were a significant number of unsold tickets which hurt the profitability of the game. The Lottery will not be offering a raffle in FY 2012 and will need to make up the income. Research. The marketing group of the Lottery has had a fixed budget for research to learn about consumers and how to make lottery products more appealing to them. Beginning in FY 2012, Scientific Games has made additional research available to the Colorado Lottery. This additional resource will help the Lottery with its product development and marketing efforts, but managing these additional projects will also be a challenge for the existing staff of the Lottery and Cactus. Profitability. The amount of funds the Lottery has returned to the state has become a very important measurement about how well the Lottery is serving the citizens of Colorado. When FY 2011 ended, the Lottery returned $113.6 million to the state on $518.9 million in sales for a percentage return of 21.85%. This compared to FY 2007 when sales totaled $455.9 million but proceeds were $119 million for a return rate of $26.10%. The staff of the Lottery has challenged itself to improve all of these numbers. However, there is not one single cause nor is there a single solution. There are several things that will have to be closely analyzed and addressed, and none of these seemingly disparate items exists in a vacuum. They are all closely related and the synergies between them must be closely examined as a group and not individually. Some of the factors are game payout percentages. The Lottery has worked to bring the Scratch games into a balance of optimum payout that would best stimulate sales. In doing this, Colorado is 12th from the lowest in overall payout percentage. Popularity and sales of higher priced Scratch tickets have led the way to the sales increases the Lottery has achieved but it has also been one of the contributors of the growth in percentage payout. The lack of significant jackpots for Powerball and Mega Millions, combined with the lack of awareness of Mega Millions, has also been a critical factor. The Lottery needs to maintain a split of Jackpot to Scratch of a minimum of 35% Jackpot sales to 65% for Scratch. Operational expenses have increased with the increase in sales and marketing expenses that happened in FY 2009 and FY 2010. Back office expenditures and the cost of courier distribution have also been factors along with maximizing the payouts to retailers in commissions for selling games. The Lottery’s greatest challenge for FY2012: examining, changing, improving, maximizing and creating a synergy among these different factors to the maximum benefit of the Lottery and proceeds partners while at the same time profitably growing sales and proceeds as much as possible. COLORADO LOTTERY MISSION AND FY12 GOALS ORGANIZATION MISSION: The Colorado Lottery creates and sells games of chance that are held to the highest standards of integrity, entertainment and efficiency, in order to maximize proceeds for the people of Colorado. FY12 GOALS: 1. Achieve total sales of $527.4 Million in FY12. Scratch sales: $350 Million = Net profit $57,750,000 at 16.5% Powerball sales: $77 Million = Net $28,875,000 at 37.5% Mega Millions sales: $32.4 Million = Net $11,016,000,000 at 34% Lotto sales: $38 Million = Net $12,920,000 at 34% MatchPlay sales: $10 Million = Net $2,600,000 at 26% Cash 5 sales: $20 Million = Net $5,600,000 at 28% 2. Increase 70 percent favorability by changing 24 neutral; 5% from neutral to somewhat favorable as documented in September/October FY12 Tracking Study, with long-term goal (three years) of increasing favorability to 10 and decreasing neutral to 14% percent. 3. Identify efficiencies within technology, operations and production. 4. Increase retail network by 2-3% (approximately 60-90 retailers) including grocery, convenience, liquor, restaurant/bar and other trade styles, and optimize retail location sales. SITUATION ANALYSIS In FY 2011 the Colorado Lottery reached nearly $519 million in sales, an all time record high with an increase of 3.5% over the prior year. This achievement was largely driven by a significant increase in Scratch sales, which grew 5% over FY10 and comprised 66.5% of total sales. Jackpot game sales, which accounted for 33.5% of total sales in FY11, came to $174 million. While the total dollar amount of proceeds returned to the state in FY11 exceeded the prior year, the percent of sales returned to proceeds was not as high as it has been historically. This is primarily due to the balance of sales coming from Scratch games vs. Jackpot games. With higher payout percentages and other factors, Scratch games are less profitable overall than Jackpot games. In addition, FY11 Jackpot game sales remained flat vs. the prior year, despite the presence of three new Jackpot offerings – Mega Millions and Matchplay, in their second year in FY11, and Raffle, which was new in FY11. Given the organization’s mission to maximize proceeds for the State of Colorado, profitability -- the Lottery’s ability to return a strong percentage of sales to proceeds – will be a key focus of FY12. FY11 Achievements: • The new courier system is fully up and running, providing a more efficient method for stocking and restocking games which results in better inventory management and in turn, increased sales. • Two Raffle games were launched, generating nearly $9 million in sales. • A fully revamped Colorado Lottery website was launched, providing a more effective and engaging hub of communication between the Lottery and its players. • $113 million was returned to the State in proceeds, taking the total contribution to Colorado from inception over $2.3 Billion in proceeds. • Fifty-three Scratch games were launched, generating $344.9 million in sales. Sales and proceeds contribution by product for FY11 were as follows: Sales Proceeds % of Sales % of Proceeds % of Ad Budget Scratch $345.0 million $54.9 66.5% 48.45% 49.9% Powerball $70 million $27.4 13.5% 24.2% 19.9% Mega Millions $25.1 million $8.2 4.8% 7.2% 9.5% Lotto $39.3 million $13.4 7.6% 11.8% 3.2% MatchPlay $11.4million $2.1 2.2% 2.0% 10.3% Cash 5 $19.1 million $6.1 3.7% 5.4% 0% Raffle* $9.0 million $.5 1.7% .5% 7.1% Total $518.9 million $113.4* FY12 Initiatives: As noted above, profitability is a key focus in FY12. Several initiatives will address this charge, including: • More of the budget will be allocated to Jackpot games than has been historically, underscoring the importance of driving the Lottery’s most profitable games. • The launch of $2 Powerball in January will be supported with over $1 million in advertising, and will include both launch and sustaining campaigns. Media will include TV, Radio, OOH, Online, Social, POS and Events. • Mega Millions will be repositioned, and to some degree, relaunched, as the $1 mega- jackpot game in Colorado after the Powerball change. In February, approximately $600k will be spent on a month long multi-media campaign including TV, Radio, Online and Social. • For both Powerball and Mega Millions, we will explore new ways to tout specific jackpot amounts when the jackpot grows over the key trigger points of $100 million and $200 million. Live read radio, banner ads, digital OOH boards, full page newspaper ads and TV are being evaluated. • Lotto will also receive advertising support in 2012, for the first time in three years. Currently the second most popular game in Colorado with a loyal fan base, we expect Lotto sales to see a lift once reminder advertising is in market. • Scratch game support will be re-evaluated to make sure we’re driving sales of the most profitable Scratch games in the portfolio, while not losing sales behind any category. Specific Scratch games to be supported include Wheel of Fortune, Immortal Cash, Holiday family of nd games, Bingo, and a 2 Chance Drawing campaign. • More emphasis will be placed on optimizing the retail environment. A retail audit was conducted early in 2011, and the opportunities identified will be implemented in priority order as budget allows. In addition, the Lottery in Motion displays, promotions module, updated automated jackpot signs, and a test sales vehicle will all enhance our retail efforts. • Building on FY10’s relaunch of ColoradoLottery.com, we will continue to make important enhancements to the site including a Spanish language version, retailer extranet, more robust MyLottery program, and a new Winner’s Awareness section. • An increased budget for Event Marketing from $500,000 in FY 2011 to $950,000 for both events and sponsorships in FY 2012 allows for a larger presence in Colorado beyond the small events and 1-2 sponsorships that the Lottery has typically been a part of in the past. This fiscal year the Lottery will be participating in more events, such as the Olathe Corn Festival, The Taste of Colorado and the National Western Stock Show, as well as sponsorships such as the Budweiser Event Center year-long sponsorship. Traditional sports sponsorships such as Kroenke and Rockies that were in place FY 2011 will also be in secured in FY 2012. • As noted in the Executive Summary, Scientific Games is funding some new research tools which will help the Lottery and Cactus team make informed, effective marketing decisions. Along with the retail audit, a new Segmentation Study will be employed to identify untapped opportunities within the Colorado marketplace and ways in which the Lottery can better meet player’s needs, both now and in the future. • Hispanic market efforts will also be explored more extensively in FY11. While we have already been translating some portion of our advertising to Spanish and running it on Spanish-language networks, the opportunity to better reach the Hispanic audience has clearly been identified via our ongoing tracking study. Cactus and the Lottery will work together to identify, prioritize, and roll out key Hispanic initiatives as a test in FY12. Each product and initiative will receive a predefined portion of the budget as follows: Scratch $4,512,000 31.8% Powerball $2,766,000 19.5% Mega Millions $1,773,000 12.5% Lotto $259,000 1.8% Cash 5 $0 0% Raffle $0 0% MatchPlay $0 0% Point of Sale $850,000 6% Research $250,000 2% Website $320,000 2.3% Proceeds/Corporate $51,000 0.4% Community Relations $140,000 1% Event Marketing $500,000 3.5% Sponsorships $450,000 3.2% News Media Relations $120,000 0.8% Consumer Promotions $300,000 2.1% Photography Expenses $7,500 0.1% Other $1,884,000 13.3% THE COLORADO LOTTERY – SWOT STRENGTHS WEAKNESSES Strong and loyal playership base Distance between Pueblo, Denver, Grand Established products with equity Junction and Ft Collins - some disconnect Colorado economy is better than previous present year Dependency of overall Jackpot game revenue Industry and professional Lottery staff on size of Powerball and Mega Millions jackpots experience Economy still lagging and discretionary Vision and mission clearly communicated to spending squeezed all staff Back office system not providing reporting Updated brand emphasis capabilities as expected Proceeds go to a great cause that is Lacking a strong social media presence supported by residents Mega Millions low awareness and weak Good relationship with proceeds recipients playership On-going consumer research tracking and Matchplay discontinuation reporting Full implementation of new courier/ inventory management system to create efficiency and timely re-stocking of retailer inventory New website Mobile promotions THE COLORADO LOTTERY – SWOT CONTINUED OPPORTUNITIES THREATS Specific proceeds distribution (compared to Jackpot fatigue general fund for other states) National and Colorado economy still lagging Introduction of promotions module during the Mergers and acquisition of lottery vendors second half of FY12 (estimated) Anti-gambling activists Enhancements to new website Payout pressure on Scratch products limits New plan for MyLottery membership profitability Potential to promote entertainment value of Funding process Lottery games Vendor/Supplier power Streamline business processes IT consolidation/centralization Positive relationships with retailers Powerball and Mega Millions impact on other Retailer expansion Lottery games Enhanced POS system through Lottery In- Uncertainty of game balance due to introduction motion of new games Research program to identify areas of Aging demographic of lottery players concentration No online subscriptions or purchases Events participation Online gaming sites Potential to use social media as a platform to $2 Powerball price point as of Jan, 2012 reach new, younger consumers Hispanic market Powerball game enhancements as of Jan, 2012 KEY MESSAGES GENERAL LOTTERY Over 28 years and more than $2.3 billion generated for the state of Colorado. The Colorado Lottery gives players the opportunity to dream big, have fun and take a chance at winning large, instant cash prizes with a complementary family of games. All of the proceeds from Lottery sales benefit the state of Colorado, supporting parks and recreation, building trails, protecting open space and funding education physical improvement projects. Proceeds from the Colorado Lottery fund projects in every community in Colorado. The Colorado Lottery promotes responsible gaming and operates with the highest degree of integrity, trust, accuracy and responsibility. CORPORATE Look at what we’ve accomplished! Highlight what proceeds dollars have accomplished; sales numbers and other significant Lottery milestones directed specifically to media outlets, government officials and consumers. Get out & Play! Proceeds/Impact statements directed to consumers (players and non- players). See what you’ve done for your own community? Secondary benefit to being a Lottery retailer or a message to proceeds partners for their continued support. Thank you for making Colorado a beautiful place to play! Partners/beneficiary message. Look who’s won! Promote winners’ stories and game-specific messages. The Lottery takes its role seriously. Discuss corporate responsibility and the Lottery’s mission to raise proceeds. Play Smart – Problem Gambling Awareness. Protect Your Prize campaign - protect consumers from fraud/scams. Thank you for your hard work to make our mission a reality! Employee message. ALL GAMES KEY MESSAGES: A wide range of games with a variety of prizes. No matter how you like to play, we have the game for you. POWERBALL General July-Jan o You can always dream big with Powerball. o Powerball jackpots are always huge and can change your life – starting with a jackpot of $20 million. o All proceeds from Colorado Powerball sales stay right here in Colorado. o There are nine ways to win playing Powerball. Match 5 of 5 plus Power Play and you could win a cool $1,000,000. o Increase your winnings – PowerPlay. General Jan-June o More (3x more millionaires), Bigger (double starting jackpots), Better (better odds of winning) o $2 to play MEGA MILLIONS After 1/15/12: Mega Millions is Colorado’s $1 mega jackpot game. Drawings on Tuesday and Friday. Jackpots are always huge and can change your life – starting with a jackpot of $12 million All proceeds from Mega Millions sales stay right here in Colorado. Megaplier gives you a chance to multiply your winnings and a chance to win an easy million without even winning the Jackpot. LOTTO Lotto has made more than 391 local millionaires since the game began in 1989 – it could be you! Drawings on Wednesday and Saturday. Lotto is Colorado’s original Jackpot game, giving people in the state the chance to become an instant millionaire. Best odds of any growing Jackpot game to win more than a million. MATCHPLAY Jackpots start at $100,000 and grow until hit. Drawings on Tuesday and Friday. Play MatchPlay in addition to your other games – your favorite game doesn’t have to know. MatchPlay gives you MORE: o More value - Best value of any Jackpot game. Three lines of play for $2. o More ways to play – three lines to play on each ticket; combined play plus line play. o More ways to win – four ways to win on each ticket; combined play plus line play; best overall odds of any Jackpot game. CASH 5 Cash 5 gives players the chance to win $20,000 through daily drawings. A chance to win $20K every day. Winning experience – the number of winners. Best jackpot odds of any Jackpot game. SCRATCH Scratch games are fun, offering an interactive, exhilarating experience with the chance to win cash instantly. Scratch games have better odds than ever (better prize payouts). Scratch games give players a wide range of options on price, prize, theme and play style and may offer a second-chance to win at any given time in the market. Scratch games may not change your life, but they can change your day. RESEARCH AND PLANNING A research committee will be established that will consist of Cactus and Lottery personnel. The Colorado Lottery will utilize research budget in FY12 to measure Marketing Plan objectives. In addition, resources will be allocated to Segmentation and Tracking research in order to match specific player needs to games offered by the Colorado Lottery. Other research considerations are future enhancement or replacement to existing games for launch in FY13. Research options available to the Lottery are listed below. SECONDARY RESEARCH ANRVICE DESCRIPTION FREQUENCY Product Portfolio Analysis This suite of analyses includes Attribute Analysis, Sales Index Analysis, Prize Structure Analysis and State of the Industry. Bi-Annual Geo-Demographic Analysis Geo-demographic analysis for Colorado. Annual Economic Optimization In year one of the contract, conduct a baseline assessment of the Lottery’s payout levels. Each subsequent year of the contract, SG will provide an update to this analysis. Annual Concept Testing Validation The Lottery has requested that at least once a year they be provided with some validation of the concepts launched based upon concept testing. The Lottery is be able to offer this analysis through their AEGIS MAP and Game Gallery products. They will flag those concepts that went through testing and were subsequently launched and will provide an analysis that shows actual sales performance. At least once per year Segmentation Study Conduct consumer Segmentation Research for the Lottery; in FY2012. Attitude and Usage/Tracking Study Procure an Attitude and Usage study for the Lottery, subsequent to the Segmentation Study. This will allow for the short form batter to be incorporated. Lottery will then monitor the segments on a quarterly basis during the ongoing collection of tracking study data. Annually with the intent of quarterly updates. Concept Testing The Lottery may choose from either focus groups or Invoke or a combination to meet the biannual requirement. This type of testing will be conducted twice in a year. Bi-Annual Research Consultation At the direction of the Lottery, SGI will assist in creating a research plan to meet current marketing objectives. Ongoing Industry White Papers When SGI uncovers information they believe is pertinent to the Lottery’s business, they will share it in a timely manner. As Developed -DEMOGRAPHIC ANALYSIS Market/Player Analysis This is the most comprehensive analysis that SGI creates using the system. In depth analysis that looks at both instant and online games and sales in the marketplace, including product trends, geographic distribution of sales, players and general retailer distribution. Advertising and Promotion analysis Through the custom cluster system, SGI can look at which promotions appealed to which specific groups. They can then use winners’ files to adjust for people buying where they work versus where they live. There is also a benefit in being able to see “visually” on a map the areas where segments of the population responded more positively. Goal: Reach $533 million in sales. Scratch sales will make up $350 million and Jackpot game sales will make up $183 million. Objectives: Market research will seek to optimize communication to residents of Colorado to determine attitudes and behaviors toward products, advertising and playership. Research structure will change from single responsibility to committee / Jay Sisson research coordinator. Strategy 1: Use research to identify best audiences upon which to focus FY12 and beyond efforts. SEGMENTATION STUDY Description: Conduct updated Segmentation study to understand types of Lottery players. Rationale: The 2006 study needs to be updated due to the addition of new Jackpot games and the changes over the past four years since the survey was last conducted. Timeline: Q1/Q2 FY12 Budget: N/A Responsibility: Jay Sisson, Lee Burnett, Cactus Strategy 2: Use research to identify opportunities to enhance and expand the product line up among key audiences. NEW GAME RESEARCH Description: Research new lottery jackpot game for key segments to possibly replace MatchPlay. Rationale: Optimize Jackpot Game mix Timeline: January 2012 Budget: $80,000 Responsibility: Jay Sisson, Lee Burnett, Cactus EYE TRACKING Description: Investigate use of eye tracking studies to determine where to place key design elements, value statements and descriptors. Rationale: Increase awareness of Scratch games to consumers at point of purchase Timeline: January 2012 Budget: $70,000 Responsibility: Todd Greco, Lee Burnett, Scientific Games, Inc. PRODUCT MARKETING The Lottery will concentrate on bringing the product mix for both lines of business (Scratch and Jackpot game) into a 65% - 35% sales ratio configuration. Historically the percentage of Scratch to total sales has exceeded 65% while Jackpot games have fell below the 35% level. In order for the Lottery to attain better profitability, more marketing resources will be allocated to Jackpot games with the objective of to bring the sales ratio to 65/35. The Lottery will launch in January 2012 a new Powerball game with a $2 price point, better overall odds and more million dollar prizes. Marketing will continue to access the profitability of existing games to determine the optimum product mix for Jackpot games. The Lottery will introduce in December 2011 a $5 Bingo game as part of the overall mix of Scratch games to complement the current mix of base games and price points. In addition the Lottery will continue to focus on profitability of games and payouts at all price points in order to meet proceeds goals. Goal: Achieve total sales of $527.4 Million in FY12 ($177.4 Million for Jackpot Games; $350 Million for Scratch games). Objectives: Implement a multi-faceted “Play” positioning strategy that encapsulates the three ways to play; our games, in our great state and in life. Attain average annual per capita spend of $105.76. o Scratch – $1.34 per week or $69.68 annual o Powerball – $.30 per week $15.60 annual o Lotto – $.15 per week or $7.80 annual o Cash 5 -$.08 per week or $4.16 annual o Mega Millions - $.13 per week $6.44 annual o MatchPlay – $.04 per week $2.08 annual Increase (past 30 day) playership for all Lottery games to 55%, and: o Increase Scratch play from 31% to 33% o Achieve Powerball play 25% o Increase Lotto play from 23% to 24% o Increase Cash 5 play from 9% to 10% o Increase Mega Millions play from 18% to 22% o Maintain MatchPlay play at 6% All Games Key Messages: A wide range of games with a variety of risk and reward. No matter how you like to play, we have the game for you. Strategy 1: Educate consumers on how easy it is to find, purchase, play and redeem Lottery games; inform them of its broad range of price points, play styles, jackpot sizes and unique game features. PROMOTIONS/INCENTIVES Description: Utilize various promotions to encourage trial. Use promotions module especially for Jackpot games. Model Weekly Jackpot Games pack that includes one ticket for each draw within a 7-day period. Value is $21, but sell for $20. Provide retailer plus sell incentive. Direct marketing with coupons. Rationale: Well executed promotions encourage player trial of a new product, increase average transaction spend, prompt cross-play between products and product lines, incentivize clerks to ‘ask for the sale’, and ultimately, increase lottery sales. Timeline: Beginning February 2012 Budget: $300,000 Responsibility: Marie Valtakis, Lee Burnett, Cactus PRODUCT/BRAND POINT OF SALE Description: Long-term POS materials that feature two or more Lottery products or the logo, URL and “Don’t Forget to Play” tagline. Rationale: Featuring more than one product on long-term POS materials allows us to feature all of the games under the Colorado Lottery umbrella. For an entire POS materials description see the reference section. Likely/Required: Playcenter o Topper/Danglers o Header o URL strip STVM o Topper o Side panel decal o URL strip Lottery In-motion (January) Six- and three-tiered manual jackpot signs In-store and window automatic Jackpot signs (Powerball, Lotto, Mega Millions) “Don’t Forget to Play” o Window decals o Posters (2 sizes) o Jackpot sign backs On-counter brochure rack with Powerball and Mega Millions jackpot amounts (with rack extension for additional brochures) CDU and Ticket messages Winning Numbers Carrier with lazy susan Ticket checker sticker and dangler For Consideration: New playcenters Updatable jackpot signs (see below) Timeline: July 2011 – June 2012 Budget: TBD Responsibility: Alan Hoffman, In Store Strategic Planning Committee, Cactus Strategy 2: Educate and promote game feature to core and infrequent players (e.g. Advance Play, multiplier, etc) AUTOMATIC JACKPOT SIGNS AT RETAIL Description: Investigate options for new signs that will not become obsolete if games change. Rationale: Automatically updating jackpot signs provide consumers with the most up-to-date jackpot amount at the locations where games are sold. Timeline: Q2 Budget: TBD Responsibility: Tom Cargal, Sales, Cactus SCRATCH In fiscal year 2011, the Colorado Lottery posted record Scratch sales of $345 million (up from $328 million in fiscal year 2011 – a five percent increase). The increase in Scratch sales came from a number of tactics implemented throughout the year. The majority of these strategies were introduced during the latter half of Q2 and followed through in Q3 and Q4. The plan included the full implementation of a new courier delivery system, strategic marketing support that kept the product message at the forefront nearly every week, an increase in payout in the higher price point categories, and innovative product development. In order to continue to invigorate the Scratch product line, the Lottery will position each price point to realize its potential. In fiscal year 2012, the Colorado Lottery will focus on several key issues such as innovative game design, product line extension for Bingo, and options available under the new Scratch Contracts in order to increase Scratch game sales and profitability. Scratch Key Messages: Scratch games are fun, offering an interactive, exhilarating experience with the chance to win cash instantly. Scratch games have better odds than ever (better prize payouts). Scratch games give players a wide range of options on price, prize, theme and play style and may offer a second chance to win at any given time in the market. Scratch games may not change your life, but they can change your day. Goal: Achieve Scratch sales of $350 Million. Objectives: Increase both the frequency of the play and spend on games for Scratch Increase Scratch game playership from 31% to 33% as indicated in the June 2011 Tracking Study. Increase average monthly spend from $22.50 to $25.00. Strategy 1: Use the $20 Scratch games to generate excitement for the category, mobilize the core, and encourage infrequent and jackpot players to play. $20 MILLIONS SERIES II – MAJESTIC TREASURES Description: In August, the Lottery will launch another $20 game that features a new printing technique called “color shift ink,” which gives the tickets a different color depending on the angle of the ticket. This feature was included on this ticket due to the fact that it has the potential to generate a lot of sales in a relatively short period of time. Rationale: The success of the $20 price point category is vital to the Lottery reaching its sales goals each year. Each $20 game has the potential of generating $28 to $43 million in sales over the life of the game. By increasing the velocity of sales for these games, the Lottery can introduce more products thus increasing the overall profitability of the organization. In the past, the Lottery has and has not advertised the launch of $20 games, and the games without advertising support have launched at much lower rates than those with advertising support. This unique ink in addition to a marketing campaign could help this game become one of the fast-selling $20 games introduced by the Lottery, and could open the door to launch an additional $20 game in FY12. Likely/Required: :30 TV :60 Radio Outdoor bulletins Online video and flash banners POS – Featured game insert, Writing surface, Register topper, Wobbler Website – 2CD Web page, Marquee, MyLottery emails, Email footers Social media – Facebook and Twitter postings; Interactive treasure hunt Timeline: August 8 – September 4, 2011 Budget: Media - $645,000 Production - $164,000 (not including POS) Responsibility: Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus $20 MILLIONAIRE SERIES – Description: Projected in April 2012, the Lottery will launch another $20 game that supports the Millionaires Series format. Rationale: The success of the $20 price point category is vital to the Lottery reaching its sales goals each year. Each $20 game has the potential of generating $28 to $43 million in sales over the life of the game. By increasing the velocity of sales for these games, the Lottery can introduce more products thus increasing the overall profitability of the organization. Likely/Required: Outdoor bulletins POS – Register topper, Wobbler Website – 2CD Web page, Marquee, MyLottery emails, Email footers Social media – Facebook and Twitter postings For Consideration: TBD event support Timeline: March 2012 Budget: TBD Responsibility: Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus Strategy 2: Use the popularity and novelty of themed Scratch games to attract and motivate players of all degrees to play. $5 WHEEL OF FORTUNE Description: In September, the Lottery will launch and promote a Wheel of Fortune themed Scratch game that features graphics from the most successful game show in the history of television. Second-Chance Drawing winners will win a trip to Hollywood for the opportunity to play a non-broadcast version of Wheel of Fortune. Rationale: By taking part in this linked game, the Lottery will have the opportunity to participate in a product that has a vast appeal to a large audience. As part of the license fee, the Lottery will receive the following: Likely/Required: :30 TV :60 Radio Online video and flash banners POS – Register Topper, Wobbler, Poster, Bonus standee Website – 2CD Web page, Marquee, MyLottery emails, Email footers Social media – Facebook and Twitter postings For Consideration: Interactive game Timeline: September 5 - September 25 Budget: Media - $523,000 Production - $600 Responsibility: Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus $5 IMMORTAL CASH Description: Promote the Immortal Cash Scratch game, gearing efforts towards the primary demographic for popular vampire-related culture: women 30-45. The game will include a Second-Chance Drawing for a romantic escape to the Broadmoor Hotel. Rationale: Immortal Cash offers the Lottery a chance to appeal to a new subset of players in a manner/tone different from traditional campaigns, and provides the opportunity to engage these players with messages/tactics that meet them where their interests lie. Likely/Required: :30 TV Outdoor bulletins Online video and flash banners POS – Featured game insert, Register topper, Wobbler, Writing surface Website – 2CD Web page, Marquee, MyLottery emails, Email footers Social media – Facebook and Twitter postings, Facebook application For Consideration: Cinema :15 on-screen Timeline: September 26 – October 16, 2011 Budget: Media - $470,000 Production - $166,000 (not including POS) Responsibility: Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus $1, $2, $3 AND $5 HOLIDAY SCRATCH FAMILY OF GAMES Description: In FY12, the Lottery plans to launch another round of “holiday” themed family of games in early November. These games will feature price points of $1, $2, $3, and $5. Rationale: The Holiday family of games provide the Lottery an opportunity to generate a large amount of sales in a short time span. During the months of November and December, the Lottery has the best opportunity to set new weekly sales records, and possibly surpass $9 million in weekly sales for the first time in the Lottery’s history. Likely/Required: :30 TV :60 Radio Online video and flash banners Outdoor bulletins POS – Featured game insert, writing surface, register topper, wobbler Website – 2CD Web page, Marquee (English and Spanish), MyLottery emails, Email footers Social media – Facebook and Twitter postings, Facebook application For Consideration: Kroenke Sponsorship Timeline: November 14 – December 4, 2011 Budget: Media - $500,000 Production - $30,000 (not including POS) Responsibility: Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus Strategy 3: Increase awareness of extended play games to appeal to players interested in the longer play format. BINGO SCRATCH GAME(S) Description: Launch and support the Bingo play style using the introduction of a continuous $5 price point within the market. Rationale: The Bingo category ($3/$5) produces more than $800,000/week in sales (a potential of $40 million/year). By supporting these games with a marketing campaign, increased awareness of the games creates the potential to increase those sales figures on a weekly basis (when available, $5 Bingo produced approximately $200,000 per week – this game was only available around specific holidays). By offering this game at all times, the Lottery may see an increase of $7-10 million/year depending on the cannibalization of other $5 games. Likely/Required: :30 TV Online video and flash banners Outdoor bulletins POS – Writing surface, register topper, wobbler Website – 2CD Web page, Marquee, MyLottery emails, Email footers For Consideration: Kroenke Sponsorship Timeline: April 2012 Budget: Media - $417,000 Production - TBD Responsibility: Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus Strategy 4: Offer players more winning opportunities. ND 2 CHANCE DRAWING SCRATCH CAMPAIGN Description: Create seasonal second-chance drawings for non-winning Scratch tickets that do not have a game-specific second-chance drawing. Winner would receive one entry per $1 spent. Rationale: Educating consumers on second-chance drawings through ongoing efforts will provide an added value opportunity to players above and beyond the instant game play and encourage Scratch ticket sales; furthermore, a points system based on the ticket price encourages play at higher price points. This will familiarize players with a points-based rewards system, setting the foundation for a future “points for prizes” program where players will have the option to utilize accumulated points to purchase prizes from a catalogue of prizes (similar to a loyalty rewards program). For Consideration: :30 TV Outdoor bulletins Online video and flash banners :60 Radio Website – 2CD Web page, Marquee, MyLottery emails, Email footers Timeline: June 2012 Budget: Media - TBD Production - TBD Responsibility: Todd Greco, Marie Valtakis, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus JACKPOT GAMES The portfolio of Jackpot games marketed by the Colorado Lottery will seek to maximize profitability and increase market share by offering a diverse portfolio of products for specific player segments. Because the Lottery has increased the number of Jackpot games, an umbrella media tactic will provide the most efficient means to support the category as a whole. Some products that provide the most opportunity for increased proceeds will be allocated additional marketing resources to support their individual message in the market. Other products that have a loyal player base and a sustaining sales trend may not receive additional funds. Approximately one third of the total marketing budget will be earmarked for Jackpot games support. Jackpot game category mix Mega Powerball Lotto MatchPlay Cash 5 Millions Ticket $1 plus $1 plus $1 $2 for 3 $1 Cost lines $1 Power Play $1 Optional $2 plus $1 Megaplier 5 of 56 plus 5 of 59 plus 1 of Matrix 1 of 46 6 of 42 6 of 38 5 of 32 39 (Powerball) (Mega Ball) Jackpot $20 million $12 million $1 million $100,000 $20,000 Starts Grows = G G G G G F Fixed = F 26 yr 30 yr graduated 25 yr graduated Lump annuity or Lump sum Jackpot annuity or lump annuity or lump sum lump sum of payout Payout sum @ 50% sum @ 50% payout cash in prize annuity value annuity value pool Drawing W, S T, F W, S T, F Daily Days *Jackpot 1 in 196 million 1 in 176 1 in 5.3 million 1 in 2.8 1 in Odds million million 201,376 *Overall 1 in 36 1 in 40 1 in 35 1 in 6 1 in 7 Odds * Odds have been rounded up MEGA JACKPOT GAMES (POWERBALL/MEGA MILLIONS) In January 2012, Powerball game enhancements (3x more millionaires, double starting jackpots, better odds) will be rolled out along with a new $2 price point. This provides an opportunity to reach infrequent and lapsed Powerball plays with news about the game. It also provides an opportunity for Mega Millions, which will now be Colorado’s only $1 mega jackpot game. Mega Jackpot Key Messages (ongoing): Powerball / Mega Millions jackpots are always huge and can change your life. You can always dream big with Powerball and Mega Millions. Two big games, four nights to win. Four big jackpots, four nights to win big. There are many ways to win playing Colorado Mega Jackpot Games, just ask the Colorado winners. Increase your winnings – Power Play and Megaplier All proceeds from Colorado Powerball and Mega Millions sales stay right here in Colorado. POWERBALL General July-Jan o You can always dream big with Powerball. o Powerball jackpots are always huge and can change your life – starting with a jackpot of $20 million. o All proceeds from Colorado Powerball sales stay right here in Colorado. o There are nine ways to win playing Powerball. Match 5 of 5 plus Power Play and you could win a cool $1,000,000. o Increase your winnings – PowerPlay. General Jan-June o More (3x more millionaires), Bigger (double starting jackpots), Better (better odds of winning) o $2 to play MEGA MILLIONS General July-Jan o After 1/15/12: Mega Millions is Colorado’s only $1 mega jackpot game. o Drawings on Tuesday and Friday. o Jackpots are always huge and can change your life – starting with a jackpot of $12 million o All proceeds from Mega Millions sales stay right here in Colorado. o Megaplier gives you a chance to multiply your winnings and a chance to win an easy million without even winning the Jackpot. Goals: Achieve Powerball sales of $77 Million. Achieve Mega Millions sales of $32.4 Million Objectives: Powerball o Achieve Powerball playership of 25% o Increase average monthly spend from $15 to $16 o Maintain an average 35% Power Play rate. Mega Millions o Increase Mega Millions playership from 18% to 22%, as indicated in the June 2011 Tracking Study o Increase average monthly spend from $17.50 to $21.00 o Maintain an average 35% Megaplier rate. Strategy 1: Co-promote actual Powerball and Mega Millions jackpot amounts to increase jackpot awareness among all audiences. JACKPOT AWARENESS Description: Use point of purchase and mass media awareness vehicles to get the jackpot amounts for the Mega Jackpot Games out to the public. Increase activity when each game reaches its agreed upon trigger point (Tier 1: $100 million +; Tier 2: $200 million+). Rationale: Jackpot awareness encourages purchase and reminds consumers to play. Likely/Required: 14X48 Statewide Bulletins Online banners In-store signage When reach trigger o Media Releases o Web Emails o Social Media o Increase online banner weight Kroenke Sponsorship Rockies Sponsorship Live read radio Newspaper ads Digital OOH (Q3-4) Timeline: July 1, 2011 through June 30, 2012 Budget: TBD Responsibility: Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus Strategy 2: Educate and promote game features to core and infrequent players. JACKPOT GAME CALENDAR Description: Feature a calendar of the Jackpot games draw days at retail. Rationale: A great way to educate consumers on the draw days of the Jackpot games and, in turn, remind consumers of the range of games from the Lottery. Likely/Required: POS – CDU Surround, Poster, In-counter strip, Wallet card, Playcenter/STVM Topper Timeline: January 2012 – June 2012 Budget: Production - $3000 Responsibility: Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus Strategy 3: Generate awareness and create game differentiation for the Powerball game enhancement ($2 price point). POWERBALL $2 CHANGE Description: Generate excitement for the new Powerball game, along with awareness of the price change from $1 to $2. Rationale: To educate Consumers on the new “Powerball 2.0” Likely/Required: :30 TV :30 Radio 14X48 Statewide Bulletins (existing) – $2 extension 14x48 Additional statewide bulletins Online banners – Baseline and upweight POS – CDU Surround, Poster, Featured Game insert, Wobbler, Register Topper, Buckslip brochure Revised permanent POS – HTP, Wallet card, jackpot sign inserts When reach trigger ($100m or more) – see jackpot alert campaign above Kroenke Sponsorship Rockies Sponsorship Timeline: December 26, 2011 – January 29, 2012 Sustaining: March 5, 2012 – April 8, 2012 Budget: Media – $1,230,000 (plus $957,000 for committed OOH and Online) Production - $200,000 Responsibility: Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus MEGA MILLIONS WINTER CAMPAIGN Description: Establish Mega Milions as the $1 mega jackpot game. Rationale: Reminding consumers that another $1 option is available may help retain current Powerball players should they not be willing to continue to play Powerball at the $2 price point. Likely/Required: :30 TV :30 Radio OOH 14X48 Statewide Bulletins (existing) –$1 extension Online banners – Baseline and upweight POS – CDU Surround, Poster, Featured Game insert, Wobbler, Register Topper, 8x3 banner, Playslip holder When reach trigger ($100m or more) o Media Releases o Web Emails o Web Marquee o Social Media o Increase online banner weight Kroenke Sponsorship Rockies Sponsorship Timeline: January 30, 2012 – March 4, 2012 Budget: Media – $525,000 (plus $957,000 for committed OOH and Online) Production - $175,000 Responsibility: Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus LOTTO Lotto, Colorado’s game, is projected to produce $38 million in FY12. Lotto appeals to the same player segments as Powerball and Mega Millions; namely Jackpot Chasers, Fun Loving Realists, Active Fans and Dabblers. Lotto Key Messages: Lotto is Colorado’s original Jackpot game, giving people in the state the chance to become an instant millionaire. Lotto has made more than 392 people in Colorado millionaires since the game began in 1989. Best odds of any growing Jackpot game to win more than a million. Goal: Achieve Lotto sales of $38 million Objectives: Increase Lotto playership from 23% to 24% as indicated in the June 2011 Tracking Study. Increase average monthly spend from $16.00 to $16.50. Strategy 1: Remind consumers that Lotto has made over 391 Colorado millionaires and communicate jackpots when relevant. LOTTO PROMOTION Description: Promote the Lotto product with the Promotions Module. Rationale: By giving players the opportunity to purchase a Lotto ticket and every nth ticket purchased throughout the state will produce a free Lotto ticket. Exact setup of the promotion will be decided on when testing of the Promotions module is completed. Likely/Required: Radio Online POS News Media Website Timeline: Q4 Budget: Cost Responsibility: Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus LOTTO TRIGGERED JACKPOT CAMAPIGN Description: Use point of purchase and mass media awareness vehicles to communicate Lotto jackpots when they reach the agreed upon trigger point of $5 million. Rationale: Jackpot awareness encourages purchase and reminds consumers to play. Likely/Required: :15 live read radio Timeline: January 2012 – June 2012 (when the jackpot reaches the $5 million trigger and not during a time when Powerball or Mega Millions are at trigger amounts) Budget: TBD Responsibility: Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus MATCHPLAY During FY12, no marketing budget will be appropriated for the MatchPlay product. This is in response to the analysis completed on the marketing campaign during the fourth quarter of FY11 that had no impact on sales of the product. Product Marketing is developing a multi-option exit strategy for MatchPlay that could start as early as March 2012. MatchPlay sales will be monitored during FY12 and should the product reach a point where acceptable profit is a risk, a decision to end the game earlier may be required. MatchPlay Key Messages: Jackpots start at $100,000 and grow until hit. Drawings on Tuesday and Friday. Play MatchPlay in addition to your other games – Your favorite game doesn’t have to know MatchPlay gives you MORE: o More value - Best value of any Jackpot game. Three lines of play for $2. o More ways to play – three lines to play on each ticket; combined play plus line play o More ways to win – four ways to win on each ticket; combined play plus line play; best overall odds of any Jackpot game. Goal: Achieve MatchPlay sales of $10 million. Objective: Maintain MatchPlay playership at 6% as indicated in the June 2011 Tracking Study. CASH 5 Cash 5 is projected to produce $20 million in FY12. Cash 5 is Colorado’s daily game with draws every day of the week. Active Fans, Dabblers and Dreamers make up the loyal player segments. Very little additional marketing resources will be allocated to Cash 5 beyond the retail point-of-sale and possible umbrella advertising. Cash 5 Key Messages: Cash 5 gives players the chance to win $20,000 daily. A chance to win $20K every day. Winning experience – the number of winners. Best jackpot odds of any Jackpot game. Goal: Achieve Cash 5 sales of $20 Million. Objectives: Increase Cash 5 playership from 9% to 10% as indicated in the June 2011 Tracking Study. Increase average monthly spend from $16 to $17. CORPORATE MARKETING The Colorado Lottery Corporate Marketing program consists of the strategies and tactics used to identify, create and maintain satisfying relationships with customers with a specific focus on generating proceeds. Key areas within our corporate marketing program are the following: Customer Service, Product Marketing, Advertising, Proceeds Awareness, Winner Awareness, Media Relations, Corporate Communications and Employee Relations. Key General Lottery Messages: Over 28 years and more than $2.3 billion generated for the state of Colorado. The Colorado Lottery gives players the opportunity to dream big, have fun and take a chance at winning large, instant cash prizes with a complementary family of games. All of the profits from Lottery sales benefit the state of Colorado, supporting parks and recreation, building trails, protecting open space and funding education physical improvement projects. Profits from the Colorado Lottery fund projects in every community in Colorado. The Colorado Lottery promotes responsible gaming and operates with the highest degree of integrity, trust, accuracy and responsibility. Corporate Key Messages Look at what we’ve accomplished! Highlight what proceeds dollars have accomplished; sales numbers and other significant Lottery milestones directed specifically to media outlets, government officials and consumers. Get Out & Play! Proceeds/Impact statements directed to consumers (player and non players). See what you’ve done for your own community? Secondary benefit to being a Lottery retailer or a message to proceeds partners for their continued support. Thank you for making Colorado a beautiful place to play! Partners/beneficiary message. Look who’s won! Promote winners’ stories and game-specific messages. The lottery takes its role seriously. Discuss corporate responsibility and the Lottery’s mission to raise proceeds. Play Smart – problem gambling awareness. Protect Your Prize campaign protect consumers from fraud/scams. Thank you for your hard work to make our mission a reality! Employee message. Goal: Increase 70 percent favorability by changing 24 neutral; 5% from neutral to somewhat favorable as documented in September/October FY12 Tracking Study, with long-term goal (three years) of increasing favorability to 10 and decreasing neutral to 14% percent. Objectives: Maintain a “very positive” and “somewhat positive” favorability rating of 70% by supporting main reasons for favorability. Strategy 1: Generate awareness for winners in an effort to maintain or increase favorability and keep players playing. WINNER AWARENESS CAMPAIGN Description: Create awareness of Lottery winners. Rationale: Help make winners’ of a large jackpot endear themselves to the Lottery and allow the Lottery to tell their winner story. It is believed that securing more winner stories will help reach/maintain a strong favorability rating. Likely/Required: Revamp the entire Winner Awareness Campaign-VIP/Winners Circle/Concierge Change verbiage on press releases New winner’s video Winners “area” to take pictures and give them extra attention Timeline: FY12 Budget: TBD Responsibility: Brooke Christopher, Heather Black, Cactus Strategy 2: Leverage proceeds contributions help to make the Lottery a more likable government agency and provide an additional reason to play Lottery games. VIDEO AND PHOTOGRAPHY Description: Create ongoing series of videos and b-roll footage. Rationale: To share where and how Lottery funds are used to make our state more beautiful for Colorado residents. Timeline: Ongoing Budget: Approximately $35,000 annually Responsibility: Brooke Christopher, Heather Black, Matt Robbins, Cactus PROCEEDS AWARENESS CAMPAIGN Description: Continue to make the Lottery a more likeable government state agency by increasing awareness and overall education about proceeds. Rationale: Research shows that increasing proceeds awareness leads to increased favorability and helps to justify purchase Required/Likely: Continue aggressive Signage program. Integrate into more focused events like Furry Scurry and REI related events like Bike to Work Day. Proceeds store poster program. Creating a Proceeds “widget” to include on web pages. Mile marker Proceeds signs. Social media – increase posts about proceeds & build relationships with proceeds partners through social media platforms. Timeline: FY12 Budget: TBD Responsibility: Brooke Christopher, Heather Black, Matt Robbins, Cactus COMMUNITY PROCEEDS AWARENESS CAMPAIGN- Description: Educate the general public that over the past 28 years, the Lottery has generated more than $2.3 Billion in proceeds and localizing that message all citizens so they may recognize the significant contribution of the Lottery. Rationale: Proceeds awareness encourages favorability and the potential purchase of products while reminding consumers to play. Timeline: FY12 Budget: $20,000 Responsibility: Brooke Christopher, Heather Black, Matt Robbins, Cactus COMMUNITY GOVERNMENT AND PARTNER RELATIONS Description: The Lottery takes its role in Colorado seriously. The Lottery has an ongoing commitment to the citizens of Colorado and especially their players to provide support and protection of the community and the environment. Rationale: Generate corporate responsibility awareness is to help reach/maintain a strong favorability rating. Likely/Required: Continuation of Protect Your Prize campaign – awareness and education to help protect our players from frauds and scams Continuation of Problem Gambling Awareness: The Colorado Lottery promotes responsible gaming and operates with the highest degree of integrity, trust, accuracy and responsibility. Bolster our “green” message (billboard materials, scratch recyclable paper etc.) Possible partnership with a non-profit organization with a proceeds message (ex. Audubon) Re-instate Amber Alerts Timeline: FY12 Budget: $30,000 Responsibility: Brooke Christopher, Heather Black, Matt Robbins, Cactus Strategy 3: Communicate products, programs, promotions and more to all Lottery employees to maximize internal awareness and support. EMPLOYEE RELATIONS: Description: Continue to improve overall morale through internal employee communications and programs. Rationale: Communicate products, programs, promotions and more to all Lottery employees to maximize internal awareness and support Likely/Required: Survey – Use Survey Monkey to conduct inquiry among staff as to what they would like to hear about, preferred communication, and other suggestions. Intranet o Update intranet landing page with key messages o Include a promotional corner o Include employee resources like the manual, procedures doc, etc Employee Meetings - find best places/ways for the Lottery employees (and their families) to interact and bond with one another. Continue to develop and execute internal Ticket newsletter on a monthly basis and the Lottery Enquirer on a weekly basis. Both communicate internal news about employees (and their families), promotions, product-related news, sales numbers, message from our Director etc. Blurb - investigate updating the font/color of the blurb copy to help it stand out when updates are made. Issue Resolution – determine ways for employees to bring forward issues anonymously while still being able to provide the answer back to staff to clear up any misperceptions (e.g. responses posted in Ticket, “suggestion box”, Timeline: FY12 Budget: $3,000 Responsibility: Brooke Christopher, Heather Black, Matt Robbins, Cactus Strategy 4: Use direct to consumer avenues to achieve excellent customer service in order to maximize satisfaction and encourage players to be brand ambassadors. CUSTOMER SERVICE Description: Continue efforts to strive for elegant, effective and efficient customer service in order to maximize satisfaction and encourage players to be brand ambassadors. Rationale: Assure positive engagement with customers for increased media attention and to ultimately generate increased sales. Likely/Required: Revamp the entire Winner Awareness Campaign (see above strategy 1) Online gaming space integration Continue to execute on social media contests and campaigns. Enable computers in claims office for consumers to enter 2CDs and signup for MyLottery. Hold weekly frequent player drawings in claims offices. Timeline: FY12 Budget: $20,000 Responsibility: Brooke Christopher, Heather Black, Matt Robbins, Cactus MYLOTTERY PROGRAM Description: Develop an interactive relationship with our customers. Rationale: Direct, relevant engagement with our customers will cultivate our brand by creating loyal customers and fans who will purchase our products and encourage others to do so. Manage and grow membership Manage email communications Execute member incentives Develop points progra Timeline: Ongoing FY12 Budget: $2,600 Responsibility: Eliza Tyndall, Cactus STATE FAIR SPONSORSHIP Description: Participate in the State Fair to reach core players. Rationale: The Lottery has participated in the State Fair for over 20 years. This continues the relationship with the State Fair and the city of Pueblo. Loaf ‘N Jug Drawing POS On location State Fair POS Caminos de Southern Colorado print ad Pueblo Chieftain print ad Timeline: August 2011 Budget: Media - $25,000 Production - $15,000 Responsibility: LuAnn Caligaris, Toni Glover, Cactus TASTE OF COLORADO SPONSORSHIP Description: The Taste of Colorado is a four-day event, over Labor Day weekend that takes place in Civic Center Park, Downtown Denver. This event has been attracting a loyal audience with an array of demographics since 1984. The admission to the event is free thus enhancing attendance numbers, consistently drawing over 500,000 people from around Colorado. Rationale: A Taste of Colorado draws over 500,000 over a four day period which gives the Lottery and opportunity to increase brand awareness and generate sales. 30’ of frontage x 20’ deep exhibit space Included in all press releases Name recognition and line in the following pieces: o Pre-Event Brochure o Newspaper o Weekend Brochure o On the two onsite Sponsor recognition signs o On the Festival’s website: Tickets and Passes to be used for Sales incentives: 15 VIP parking passes Timeline: September 2011 Budget: $20,000 Responsibility: Marie Valtakis, Lee Burnett, Cactus CSU-PUEBLO SPONSORSHIP Description: Sponsorship with CSU-Pueblo athletics. Rationale: Build relationship with local university and increase brand awareness on campus. Two (2) 34” (inch) X 32’ (foot) Neta & Eddie DeRose ThunderBowl sideline signs Two 4’ x 16’ permanent signs on the front of Neta & Eddie Derose Thunderbowl One (1) 4’ X 12’ sign in Massari Arena Full page ad in 2008 football game program Full page ad in 2008-09 basketball game program Scholar athlete presentation Timeline: August 2010 – March 2011 (year two of three year agreement) Budget: $11,000 ($9,000 for three year agreement) Responsibility: Tom Cargal, Cactus KROENKE SPONSORSHIP Description: Promotional program with sports teams to leverage their credibility and reach a prime Lottery audience in a fun and entertaining atmosphere. Rationale: The sport teams of KSE9 (Mammoth, Nuggets, and Avalanche) offer relatively high reach and frequency because the large fan base and many season ticket holders. The Pepsi Center venue gives the Lottery the opportunity to reach new players and current customers in an engaging, fun way. Blimp at all Mammoth and Avs games PA announcements Powerball and Mega Millions jackpot amounts and logos on digital fascia and center scoreboard Promo Teams for Mammoth and Nuggets Timeline: October 2011 – June 2012 Budget: Media - $200,000 Responsibility: Marie Valtakis, Lee Burnett, Cactus ROCKIES SPONSORSHIP Description: Promotional program with sports teams to leverage their credibility and reach a prime Lottery audience in a fun and entertaining atmosphere. Rationale: The Rockies and Coors Field offer relatively high reach and frequency because the large fan base and many season ticket holders. Timeline: July 2011 - September 2011 - Mega Millions April 2012 - June 2012 (TBD) Budget: Media - $180,000 Responsibility: Marie Valtakis, Lee Burnett, Cactus OLATHE SWEET CORN FESTIVAL Description: Olathe Sweet Corn Festival has been a yearly tradition since 1992. The goal of the festival is to bring people together and provide them with a sense of community and accomplishment. The event helps improve the economic status in Olathe and has been extended to two days due to past success Rationale: The Olathe Sweet Corn Festival allows the Lottery to increase brand awareness, reach new players and generate sales. Timeline: August 5 & 6, 2011 Budget: $5000 Responsibility: Marie Valtakis, Lee Burnett, Cactus CHILI & FRIJOLES FESTIVAL Description: The annual Loaf ’N Jug Chile & Frijoles Festival‚ held each year in late September‚ is Pueblo’s harvest celebration. Rationale: The event features music‚ arts and crafts‚ cooking competitions and chilies‚ chilies‚ chilies. Held downtown along Union Avenue‚ it draws Pueblo residents as well as people from across the state and around the nation. This venue gives the Lottery an opportunity to increase brand awareness, reach new players and generate sales. Timeline: September 23-25, 2011 Budget: $4,500 Responsibility: Marie Valtakis, Lee Burnett, Cactus BUDWEISER EVENT CENTER SPONSORSHIP Description: Sponsoring and attending one multiple events that take place at the Budweiser Event Center throughout the year. Rationale: Budweiser Event Center is located in Loveland, Colorado and is host to 500,000+ guests a year for events such as Colorado Eagles Hockey games, rodeos, concerts and trade shows. The Larimer County Fairgrounds and Events Complex, aka “The Ranch”, which includes the Budweiser Event Center on its grounds, also encompasses an arena, two livestock pavilions, the First National Bank building and Thomas M, McKee Building. These venues have quickly become popular locations for sporting events, entertainment and agricultural hubs for the Denver and Northern Colorado population. An average of 800,000 guests is on the grounds throughout the year, which makes this a great opportunity for the Lottery to continue to increase brand awareness. Presenting Sponsor of the World Championship Ice Racing & Arenacross o Support includes logo inclusion in Newspaper, event tickets, Web and event posters, email blasts and mentions on Radio o Press release o On-site promotion: Banners, Booth space, Mascots Monster Truck Winter Nationals o Logo inclusion on posters, email blasts, Newspaper, event tickets, TV and Radio mentions o Ticket outlet or on-site promotion Larimer County Fair & PRCA Rodeo o Support includes logo inclusion in daily maps, Newspaper, Web and event posters, email and mentions on Radio o Parade float entry o On-site promotion: Signage, Booth space, PA announcements, signage on shuttles o Full page ad in program o Message on LED Timeline: January, 2012 – June, 2012 Budget: $30,000 Responsibility: Marie Valtakis, Lee Burnett, Cactus NATIONAL WESTERN STOCK SHOW Description: Sponsoring and attending one of the largest events in Colorado that averages 500,000 in attendance each year. Rationale: The 16 day show serves as an entertainment arena, hosting one of the world’s richest regular season professional rodeos, largest horse show and Colorado’s largest tradeshow. National Western Stock show gives the Lottery an opportunity to increase brand awareness, reach new players and generate sales. 2012 Guest Services Guide (Circ. 50,000). Program benefits include: Logo on interior sponsor marquee page, Full page, four color ad Premium Exhibit Space - Complimentary 16’ x 20’ of premium exhibition space at a NWSS Expo Onsite Branding during the National Western o Coliseum – One 3’x8’ bangboard (Provided by NWSS) o Expo Hall - One North, South and Center Ticket Lobby Sponsor Marquee o Events Center - One Lobby Marquee o Promotional Rights One (1) :90 promotion for each of 28 rodeo performances o Promotion may include Colorado Lottery street team interacting with fans on the concourse to give away t-shirts, etc. (Giveaway item costs responsibility of Colorado Lottery and must be pre-approved by NWSS) o Promotion will be supported with PA announcements and video screens – Colorado Lottery to provide script for PA announcements and logo for inclusion on video screens Roaming rights for ten (10) rodeos one hour prior to the event 2012 Guest Services Guide (Circ. 50,000). Program benefits include: Logo on interior sponsor marquee page and Full page, four color ad Internet and Direct Marketing Access: Trademark and link from www.nationalwestern.com and Trademark and 30 word description on Sponsor page Timeline: January 7-21, 2012 Budget: $46,700 Responsibility: Marie Valtakis, Lee Burnett, Cactus WILD WILD WEST FESTIVAL Description: Wild Wild West Festival is a western themed festival that features events for the whole family ranging from concerts to carnival rides. Rationale: This three day event, which attracts roughly 60,000 people, will allow the Lottery to increase brand awareness, reach new players and generate sales. Timeline: May 2012 Budget: TBD Responsibility: Marie Valtakis, Lee Burnett, Cactus COUNTRY JAM Description: Country Jam is a four day country music festival which hosts top notch national talent. Rationale: Country Jam draws festival customers from a five state region which will allow the Lottery to increase brand awareness, reach new players and generate sales. Timeline: June 2012 Budget: TBD Responsibility: Marie Valtakis, Lee Burnett, Cactus Strategy 5: Promote the Lottery’s corporate programs to showcase its commitment to the State, its communities and players. CORPORATE RESPONSIBILITY CAMPAIGN Description: Critical to make the Lottery a more likeable government state agency and increase awareness and overall education about the Lottery’s corporate programs. Rationale: Promote the Lottery’s corporate programs to showcase its commitment to the State, its communities and players. Likely/Required: Continuation of Protect Your Prize and Problem Gambling participation and campaigns. Annual Report Bolster our “green” message (billboard materials, scratch recyclable paper etc.). Possible partnership with a non-profit organization with a proceeds message (ex. Audubon). Reintroduce Amber Alerts at retail level. Utilize LIM at appropriate levels. Timeline: Ongoing Budget: $40,000 Responsibility: Brooke Christopher, Heather Black, Matt Robbins, Cactus RETAILER RELATIONS In FY12 at retail, the Lottery will primarily focus on the optimization of its existing network in several areas. Due to the contract extension with its on-line vendor, Scientific Games, new technology and equipment will be provided to help retailers better service players operationally, while also giving them additional tools to grow sales through new marketing and promotional advances systematically. The Lottery will continue to educate and motivate retailers at all levels from front-line clerks to corporate management on the benefits of selling Lottery and its value to their business. During this fiscal year, the emphasis for the Lottery will also be providing on-going training to its sales force so that they can be empowered to maximize service to their retailers and grow sales throughout their respective territories. Improved inventory management will also be a key factor in the upcoming year, as the Lottery continues to refine its courier Scratch distribution system. Finally, the Sales section will work toward growing its current retailer base to over 3100 retailers by recruiting quality accounts both in traditional and non-traditional channels. Goal: Increase retail network by 2-3% (approximately 60-90 retailers) including grocery, convenience, liquor, restaurant/bar and other trade styles, and optimize retail location sales to reach $527.4M annually. Objectives: Retail Accounts: o Increase retail network by 2-3% (approximately 60-90 retailers) including grocery, convenience, liquor, restaurant/bar and non-traditional trade styles. Retail Sales Performance: o Increase average sales per trade style: Reach $110 million in annual average grocery store sales ($251,000 per outlet) Reach $347 million in annual average convenience store sales ($210,000 per outlet) Reach $5 million in annual average bar/restaurant sales ($64,000 per outlet) Reach $36 million in annual average liquor store sales ($63,000 per outlet) Reach $29.4 million in annual average non-traditional/other trade styles sales ($98,000 per outlet) Strategy 1: Enhance retailer/clerk relations (e.g. customer service, retailer-friendly policies, compensations, etc.) in an effort to convert retailers from sales people into brand ambassadors for the Lottery. RETAILER EXTRANET Description: Retailer Extranet – microsite targeted to Lottery retailers Rationale: The microsite will provide retailers with resources to manage their Lottery business efficiently and effectively. Likely/Required: Billing statements and business reviews financial data Troubleshooting tips Merchandising tools Product sales information including profit and bonus figures Accounting forms Security information Timeline: Q2 Budget: Contract Expenditure Responsibility: Eliza Tyndall, Cactus Strategy 2: Identify prospective Lottery retailers and recruit them to sell Lottery products to grow the retail network while maintaining current retailer base. INCREASING RETAIL NETWORK Description: Promoting the benefits of selling Lottery products to various tradestyles in the marketplace. Rationale: Increasing the retail network with proven tradestyles and new tradestyles should help increment overall Lottery sales and achieve FY12 sales goals. Likely/Required: Billing statements and business reviews financial data Retain existing retail accounts Increase traditional distribution channels, i.e. supermarket/grocery, convenience store, and liquor Expand into non-traditional distribution channels, i.e. dollar stores, bowling alleys, Hispanic groceries, bar/restaurants, and regional airports Timeline: FY12 ongoing Budget: $25,000 Responsibility: Tom Horvat Strategy 3: Expand internal and external Lottery exposure in retail locations and improve visibility/display of Lottery products, equipment and point-of-sale materials. IMPROVE MERCHANDISING AT RETAIL Description: Expand internal and external Lottery exposure in retail locations and improve visibility/display of Lottery products, equipment and point-of-sale materials. Rationale: Improved merchandising/awareness of Lottery products stimulates customer impulse purchases to help increase sales and achieve FY12 Lottery sales goals. Sell-in/coordinate SGI contract extension deliverables, i.e. Lottery In Motion displays, new ticket checkers, wand validators upgrade STVMs to 28-game capacity in high volume Scratch accounts explore permanent outdoor signage to identify Lottery retailers use merchandiser audit research study to improve standards execute SGI contract provided training techniques at retail Timeline: FY12 on-going Budget: TBD Responsibility: Tom Horvat Strategy 4: Educate retailers on Lottery products, equipment, selling techniques and benefits of selling Lottery products TRAINING, PLUS-SELLING TECHNIQUES, AND OPERATIONS. Description: Educate retailers on Lottery products, equipment, selling techniques, and the benefits of selling Lottery products. Rationale: By increasing training to our retailers, they will be better-equipped to serve our players as brand ambassadors and ultimately increase Lottery sales. Produce Lottery reference manual on equipment operations and product sales to slide under Extrema terminal. Revise/update quick reference cards (QRCs) for store personnel to reference how to sell tickets Create monthly training flyer emphasizing a particular Lottery game enhancement/feature, i.e. Power Play, Advance Play, etc. for sales reps to train retailers Explore various training methodologies to reach all retail levels, i.e. corporate, district managers, store managers, clerks, etc. Continue to use Lottery publications, i.e. Retailer Rap, Minute Message, etc. and Lottery Web site retailer extranet to educate retailers on key Lottery messages. Timeline: FY12 on-going Budget: $30,000 Responsibility: Tom Horvat Strategy 5: Execute promotions to motivate retailers to sell Lottery products and stimulate consumers to purchase. PROMOTIONS AT RETAIL Description: Use promotions to motivate retailers and consumers in order to increment sales of all Lottery products. Rationale: Effectively executing promotions at retail will help motivate players to buy and retailers to sell Lottery products resulting in sales increases. Use SGI promotional module to facilitate various Jackpot game promotions, i.e., statewide, chain-specific, retailer specific, etc. Conduct 3 chain and 175 independent retailer promotions per quarter. Create/implement tradestyle-specific promotions, i.e. bar/restaurant, liquor, etc. to stimulate sales as warranted. Coordinate in-store product promotions to support advertised products in order to create synergistic effort. Timeline: FY12 on-going Budget: $60,000 Responsibility: Tom Horvat Strategy 6: Train, empower and provide tools for Sales Representatives. RETAIL TRAINING PROGRAM Description: Train, empower, and provide sales tools for Lottery sales representatives. Rationale: By providing the sales force with on-going training, they will be able to provide better service and ultimately increase Lottery sales in their post- courier role as sales consultants to their accounts. Use SGI-provided training in Scratch contract where appropriate. Upgrade rep hardware for improved accessibility to information. Update sales rep auto reorder book and develop sales report manual. Conduct monthly district meetings and bi-annual sales meeting to inform sales reps on key Lottery initiatives. Timeline: FY12 on-going Budget: $20,000 Responsibility: Tom Horvat Strategy 7: Continue to refine Scratch game distribution system (courier system) to maximize Scratch product at retail. IMPROVED SCRATCH INVENTORY MANAGEMENT Description of idea: Continue to refine Scratch game distribution using courier delivery and back office auto reorder system to maximize Scratch sales. Rationale: Improving day-to-day management of Scratch inventory in the field will result in sales increases. Create retail operations manager position for improved day-to-day management of back office auto reorder system. Increase velocity of Scratch games systematically in conjunction with advertising campaigns, holidays and new games. Implement ability for sales reps to transfer full packs from one retailer to another. Continue to monitor price point mix, number of Scratch games in the marketplace, inventory levels by game, and game launch schedules in order to optimize Scratch sales statewide. Minimize Scratch ticket returns to reduce costs. Timeline: FY12 on-going Budget: NA Responsibility: Tom Horvat REFERENCE 1. SWOT 2. CORPORATE IDENTITY 3. PRODUCT REVENUE AND CONTRIBUTIONS 4. LOTTERY GAME PLAYERSHIP 5. DEMOGRAPHICS 6. AUDIENCES 7. RESEARCH 8. POINT OF SALE THE COLORADO LOTTERY – SWOT STRENGTHS WEAKNESSES Strong and loyal playership base No promotions module during the first half Established products with equity of FY11 Colorado economy stronger than national Distance between Pueblo, Denver, Grand average and on the rebound Junction and Ft Collins - some disconnect Industry and professional Lottery staff present experience Dependency of overall Jackpot game Vision and mission clearly communicated revenue on size of Powerball and Mega to all staff Millions jackpots Updated brand emphasis Security vs. business process/attitude Proceeds go to a great cause that is Economy still lagging and discretionary supported by residents spending squeezed Good relationship with proceeds Back office system not providing reporting recipients capabilities as expected. New back office system is in place and working On-going consumer research tracking and reporting Advances in using digital technology THE COLORADO LOTTERY – SWOT CONTINUED OPPORTUNITIES THREATS Full implementation of new courier/ Jackpot fatigue inventory management system to create National and Colorado economy still lagging efficiency and timely re-stocking of retailer Mergers and acquisition of lottery vendors inventory Anti-gambling activists Specific proceeds distribution (compared Payout pressure on Scratch products limits to general fund for other states) profitability New Web site retailer Extranet Funding process New plan for MyLottery membership Vendor/Supplier power Introduction of new Jackpot games or IT consolidation/centralization enhancements (Raffle and Lotto) Powerball and Mega Millions impact on Potential to promote entertainment value other Lottery games of Lottery games Reorganization of Product Mix Streamline business processes Aging demographic of lottery players Positive relationships with retailers Off-shore online gambling sites Retailer expansion Promotions module slated for February 2012 (estimated) Advances in using digital technology PRODUCT DEVELOPMENT – SWOT STRENGTHS WEAKNESSES Experienced, knowledgeable and Resources are limited motivated personnel Ability to access an ad hoc system of Consistent record of achievement in all information/reports product categories Research of online game development Back office system to support launches centered in one position and promotions Have reached capacity with current online Available external resources (Industry games network) Unchanged Scratch category Solid understanding of what games work best Innovation, creativity Additional vendors OPPORTUNITIES THREATS New back office system helps to launch Limited resources for product development new games and refresh existing games Ability to do business in an efficient manner Create better relationships between Sales because of division/department and Marketing through communication policies/work in silos Research for new products Economy and rising costs of consumer Personal and professional growth through goods conferences, symposiums and user Other, online lottery-type competitors conferences – amendment 41 Expensive costs that come with Licensed Management training opportunities Properties Five-year Strategic plan in place State budget New dynamic research $2 Powerball price point Scratch RFP JACKPOT GAMES – SWOT STRENGTHS WEAKNESSES Established Powerball, Meg Millions, System capabilities – can expand games Lotto, Cash 5 and MatchPlay brands No promotions module until January 2011 The addition of Mega Millions gives Coupon promotions hit marketing budget players four nights to dream big and Lack of overall winner awareness chase huge jackpots Jackpot winner lack of publicity Jackpot game profitability Promotion workaround is labor-intensive Powerball Power Play participation Data transfer Retail network Lack of reporting functionality Powerball billboard awareness 53% as of Many games to promote Jan ‘10 Cannot sell Jackpot games via internet Five or more game mix with balance of No expansion of player base risk and reward Shared marketing resources Electronic updating dual jackpot signs Flat MM sales New back office system in place Matchplay performance Courier system will free sales rep time to focus more on Jackpot games Expanded player base OPPORTUNITIES THREATS Cross-promoting family of Jackpot games Jackpot fatigue a growing threat giving players a range of risk, reward and New technologies/substitute entertainment play style options Systems issues Inflation and weak national economy Integration/alignment in Lottery Unclear depth of national recession Market-based approach to Web site Saturation of Jackpot games, not much Player connection to proceeds room to introduce new ones Promotions module developed and ready Cannibalization of existing games by new in February 2012 games instead of playership growth Subscription service potential Marketing resources Advance Play marketing Game differentiation Jackpot game education Introduction of new Jackpot games Sales reps freed up and encouraged to support Jackpot games SCRATCH – SWOT STRENGTHS WEAKNESSES Scratch games give players an Profitability, especially with Licensed interactive, fun experience and the Property games opportunity for instant winning Fiscal support Vendor relations/support Licensed properties vendors not easy to Game design work with Knowledge of the product/industry Retailer/sales support Product mix gives players a range of risk, STVMs – don’t sell all products reward and play style Sci Scan limitations Loyal player base 200 additional STVM upgrades Second-chance drawing expansion Additional $ Bingo game 24-game strategy Retail network OPPORTUNITIES THREATS Updated STVMs Scratch category is susceptible to the weak More second-chance drawings to create economy more ticket value and will encourage sell- Licensed Properties can be expensive and through of inventory cost-prohibitive Expanded retailer base New Scratch contracts Licensed Properties continue to appeal to Dated game style new players Stagnant Scratch category New advertising philosophy Profitability RFP for Scratch ticket suppliers No additional price point strategy Rules timeline may change New play styles New price points Predictive ordering system with courier delivery frees sale reps’ time to focus on marketing support and new retailer recruitment Better in-store merchandising/games display Social media SALES – SWOT STRENGTHS WEAKNESSES Experienced Corporate Account Aging fleet of vehicles and shortage of Specialists, Customer Service Reps and vehicles Field Sales Force Accessibility/timeliness of sales data and Effective problem-solvers with a hands-on reports approach Lack of promotion module until Q3 Motivated self-starters that work well with Budget constraints on POS items other sections of the Lottery Rely too heavily on certain trade styles (e.g. Excellent relationships with retail grocery, convenience stores) accounts Use of POS in retail Momentum with Scratch game sales High clerk turnover Sales rep bonus plan System limitations hinder effective inventory Good POS system in place with retail management accounts OPPORTUNITIES THREATS Retailer recruitment and expansion Profitability challenges Full courier distribution/inventory Vendor field service issues management system Retailer fraud issues Implement sales training techniques to Ongoing battle of Lottery image maximize sales New clerks constantly needing to be Robust new back office system/predictive retrained ordering Economic downturn Courier distribution to allow for more time Businesses going out-of-business resulting on qualified sales calls in slow net gain of retailers Creative uses of POS in retail Better relationships to foster joint promotions Retailer extranet provides financials digitally to customers ADVERTISING – SWOT STRENGTHS WEAKNESSES Ad agency relationship entering fifth year No promotion module until FY12; no ability Strong relationships with media and to use terminal promotions or barcode production vendors coupons Extensive industry and professional Budget must stretch to cover six Jackpot Lottery staff knowledge products throughout the year and 23 permanent jackpot outdoor billboards communicate a wide range of jackpot in place and mechanical paid for (no amounts longer under lease) Increased marketing budget since FY09 Revitalized brand image and strong family of games 82% favorability according to 2008 Image Study* 36% strongly favor 27% somewhat favor 19% slightly favor OPPORTUNITIES THREATS Cross-promotion of the Lottery’s family of Ongoing recession games/products Uncertainty of how recently introduced Tap power of Internet/digital marketing games will change market place Excitement of new Jackpot games Election year More consumers turning to the Internet for Cannibalization with competing jackpots news, information, entertainment and Low Powerball, Mega Millions or Lotto shopping jackpot amounts threaten to affect sales Non-traditional advertising mediums: Inflation of media and production costs guerilla, mobile, social platforms reduce effective buying power Shrinking audience for traditional media outlets * In 2004, overall favorable impression of the Lottery was 84%: 32% strongly favor, 38% somewhat favor, 14% slightly favor. Source: Image Study, The Howell Research Group WEB SITE – SWOT STRENGTHS WEAKNESSES New website with focus on interaction Fiscal limitations to implement new with players technologies 1.1 million visitsper month on average; Lack of understanding 7.3 average page views per month (demographics/psychographics) of Dedicated base – MyLottery VIP Club MyLottery members (200,000+ members) Mobile text messages deliverability Coloradolottery.com has brand equity challenges New CMS system – ability to edit site in- Can’t accept payments via Internet house Good Web vendor with working knowledge of current site Good e-mail system Timely updates All second-chance drawings done via Internet registration Integration with Facebook Offers Spanish translation of key pages Retailer Extranet provides retailers with relevant information OPPORTUNITIES THREATS Expand MyLottery options Growing cost of site Video streaming; viral marketing Technology changes and ability to stay opportunities abreast of them Desktop widgets Possibility of becoming a target for Internet Interactive promotions criminals Quizzes and surveys Alienating older, non-tech savvy players Attend conferences where Internet, World Offshore online gambling Wide Web, e-marketing, viral marketing Casinos online loyalty programs and mobile media issues are being discussed Opportunity to gather data on players who register for second-chance drawings Opportunity to gather data on MyLottery members Sophisticated visitor tracking and analysis Email marketing opportunities Social media integration POINT-OF-SALE – SWOT STRENGTHS WEAKNESSES 900 dual automatic jackpot signs placed Poor placement of playcenters in some at retail stores 1,500 playcenters placed at retail Strong laws prohibit outdoor banners in 530 STVMs placed at retailers many metro locations Good support from Lottery sales reps with No permanent exterior signage merchandising will become better with No Mega Millions automatic jackpot signs courier Broad inventory of POS pieces in variety of sizes to accommodate available space Raise Program requirements Redesigned, Lottery-branded POS Special POS bonus piece 600 Powerball ticker automatic jackpot signs OPPORTUNITIES THREATS Add more attention-producing features to POS space at retail increasingly difficult to playcenters such as scroll signs, back-lit obtain without paying for it signs, LCD screens, etc. Lottery sales not top-of-mind for retail Investigation of new playcenter designs owners or clerks Secure retailer and produce exterior Pay-at-pump option has caused reduction signage of customers in convenience stores Use promotions or incentives to increase Printing vendors facing economic pressures POS space or plus-selling by clerk – many going out of business SIPC (Strategic In-store Planning Potentially higher attention POS options Committee) in place with new focus (high tech) are expensive to supply to near Paid POS 3,000 retailers Some special corporate signage such as Many stores remodeling with cleaner, less 7-11 clings and Bradley posters cluttered look and in doing so POS Retail Promotions (LnJ, King Soopers) opportunities are being removed Mega Millions sign extensions PUBLIC RELATIONS – SWOT STRENGTHS WEAKNESSES Extensive industry and professional Limited signage at proceeds-funded areas knowledge and projects Strong relationships with Great Outdoors Spotty success getting winners to agree to Colorado, State Parks, Division of Wildlife speak with press and other proceeds recipients More internal support for proceeds relations Ability to write and distribute press efforts needed releases regularly Corporate responsibility program , continue Closer relationships between Media to develop Relations and Community Relations Increased outreach to internal audiences Customer focus/responsive to consumers and consumer issues Strong writing/editing Good idea generation Increased exposure of Lottery in community Proceeds go to a cause that is supported by citizens More established relationships with media outlets in Denver metro-area and Southern Colorado Increased exposure of Lottery in the community – via press and via proceeds recipients Increased winner relations efforts Re-launch of Speaker’s Bureau – chance to get in front of decision makers and influential community members PUBLIC RELATIONS – SWOT CONTINUED OPPORTUNITIES THREATS All of the big winners throughout the year Retailer fraud issues give the Lottery a great story to tell Difficult to get partners to proceeds promote Increased visibility of signs at Lottery- Lottery contributions to projects funded venues Declining proceeds as a percent of sales Great story to tell in every community in Economy in recession – harder to work with Colorado proceeds recipients because of limited staff Proceeds Road Trips – continue building and budget cuts relationships with partners and recipients Winners reluctant to agree to speak to the Leveraging relationships with partners press and beneficiaries to spread Lottery word Shrinking media market (Rocky Mountain at a grassroots level News exiting market, merger between Greater utilization of technologies KDVR and KWGN) means there are fewer Increased focus on customer care places to pitch our stories Continued relationship-building with proceeds recipients Continued relationship-building with members of the media Continued relationship-building with winners More proceeds contributions due to new games Lottery addressing declining prize payouts RESEARCH – SWOT STRENGTHS WEAKNESSES Long standing studies provide a good Difficult to consolidate data from several look at year-over-year trends and study sources progress Not all questions are actionable (meaning Extensive list of strong research partners there may be some wasted resources) and vendors from which to chose Different studies categorize audiences Tracking study dashboard is easy to view differently (segments categorized and provides a very quick overview of differently) findings Tracking study deliverables are on different Image study allows the Lottery to timelines (e.g., dashboard provided for two- understand the strengths and month period, report is quarterly, crosstabs weaknesses of current efforts so as to are monthly/quarterly/etc.) – hinder ability to leverage these learnings in future find accurate information over specified time messages and strategies periods Quarterly and annual qualitative research Tracking study is cumbersome – too many allows for additional insights into questions consumer motivations Research is not current – the economy has shifted since the last of many studies Not currently aligned with sales figures to garner additional insights Tracking study does not currently utilize avenues through which additional/different targets can be reached (e.g., online, mobile phones) Research provides a strong demographic profile, but the psychographic portion is missing (e.g., motivators, media consumptions, etc.) OPPORTUNITIES THREATS Research audit will help to identify missed No research manager on Lottery areas of focus staff means focus may wane Revamped annual tracking study is now Lack of comprehensive plan may create more established and can be adjusted as overlap or prevent the team from being able needed to identify gaps Social media research is becoming more prevalent and available for purchase; audit to be conducted in FY10 Investigating possibility of having Scientific Games conduct the segmentation study may open up research funds for other efforts Lotto Research will provide brief, but current segmentation information Emerging Market study can provide support for targeting new segments CORPORATE IDENTITY COLORADO LOTTERY POSITIONING STATEMENT To people in Colorado who like to play games of chance, The Colorado Lottery is the brand that gives players the chance to dream big and have a chance at winning large cash prizes for a small wager. The Colorado Lottery offers a family of unique, fun, interactive games with a broad range of risk (odds and price points) and reward (large cash prizes) that are easy to find, buy, play and redeem. The brand characteristics for The Colorado Lottery are fun, play, dream, winning, luck and supporting the great outdoors of Colorado. THE WINNING POSITIONING FOR THE COLORADO LOTTERY Life is short –– dream big and Don’t Forget to Play THE COLORADO LOTTERY TAGLINE Don’t Forget to Play Taglines are extremely important branding tools. “Don’t Forget to Play” further differentiates the Lottery brand, is short, memorable and will play an important part of the Lottery’s new brand image. The line “Don’t Forget to Play” also reinforces three very important key messages. First, it reminds people to have fun in life and that they should always find time to play. Second, it is a direct call to action for people to play Lottery games. And finally, it encourages people to get out and enjoy the great outdoors and lifestyle Colorado is famous for and that Lottery proceeds support. THREE MEANINGS: ONE TAGLINE Play is fun, lighthearted and a basic human need. We are reminding consumers to have fun and enjoy life. From recreation centers to State Parks, the Colorado Lottery helps everyone enjoy the outdoors. Keeps Lottery top of mind so consumers are reminded to play our family of games. PRODUCT REVENUE Total FY11 sales were $518,920,841, an increase of $17,723,432 over FY10 sales. Scratch had record sales of 344,945,609, an increase of $16,836,868 million. The new Jackpot games (MatchPlay and Mega Millions) introduced in late FY10 provided sales of $11,418,378 million and $25,126,942 million, respectively. Powerball sales decreased by $31,521,621 million while Lotto and Cash 5 also saw a decrease of $2,155,842 and $2,363,031 respectively. FY12 REVENUE GOALS Achieve total sales of $527.4 Million in FY12. Scratch sales: $350 Million = Net profit $57,750,000 at 16.5% Powerball sales: $77 Million = Net $28,875,000 at 37.5% Mega Millions sales: $32.4 Million = Net $11,016,000,000 at 34% Lotto sales: $38 Million = Net $12,920,000 at 34% MatchPlay sales: $10 Million = Net $3,400,000 at 34% Cash 5 sales: $20 Million = Net $7,000,000 at 35% PRODUCT REVENUES AND CONTRIBUTIONS Fiscal Mega Year Scratch Powerball Millions Lotto Cash 5 MatchPlay Raffle Total P 1983 136,920,137 0 0 0 0 0 0 136,920,137 4 1984 117,579,570 0 0 0 0 0 0 117,579,570 4 1985 105,263,444 0 0 0 0 0 0 105,263,444 3 1986 108,949,281 0 0 0 0 0 0 108,949,281 2 1987 113,297,685 0 0 0 0 0 0 113,297,685 3 1988 90,944,020 0 0 0 0 0 0 90,944,020 3 1989 61,932,292 0 0 16,972,331 0 0 0 78,904,623 1 1990 80,227,984 0 0 59,711,795 0 0 0 139,939,779 4 1991 66,876,901 0 0 118,571,408 0 0 0 185,448,309 5 1992 58,790,288 0 0 166,532,740 0 0 0 225,323,028 7 1993 117,307,110 0 0 136,638,088 0 0 0 253,945,198 7 1994 165,593,481 0 0 113,178,549 0 0 0 278,772,030 7 1995 180,919,348 0 0 163,035,920 0 0 0 343,955,268 10 1996 183,856,290 0 0 139,786,974 0 0 0 323,643,264 9 1997 212,215,028 0 0 125,941,046 16,885,837 0 0 355,041,911 9 1998 225,237,189 0 0 127,439,956 16,105,601 0 0 368,782,746 9 1999 233,937,322 0 0 119,716,980 12,068,634 0 0 365,722,936 8 2000 233,999,764 0 0 125,474,093 11,482,491 0 0 370,956,348 8 2001 249,210,219 0 0 88,940,701 12,481,748 0 0 350,632,668 7 2002 257,213,494 79,885,753 0 57,645,776 13,221,511 0 0 407,966,534 11 2003 254,255,554 75,702,315 0 48,270,758 13,245,013 0 0 391,473,640 10 2004 260,901,964 85,030,889 0 40,811,438 14,506,680 0 0 401,250,971 10 2005 282,735,729 80,912,668 0 38,266,117 15,052,268 0 0 416,966,782 10 2006 293,812,628 119,757,623 0 38,332,996 16,858,542 0 0 468,761,789 12 2007 297,112,493 101,570,695 0 39,835,761 17,407,163 0 0 455,926,112 11 2008 336,038,899 80,771,409 0 41,071,837 13,384,912 0 0 471,267,057 12 2009 328,254,471 100,733,520 0 43,552,521 20,831,732 0 0 493,372,244 11 2010 328,108,741 101,568,085 2,403,216 41,620,408 21,309,593 6,187,366 0 501,197,409 5 2011 344,945,609 70,046,464 25,126,942 39,257,377 19,153,751 11,418,378 8,972,320 518,920,841 11 Total 5,711,361,884 8,617,539,569 27,530,158 1,932,385,770 218,577,228 17,605,744 8,972,320 8,841,125,624 2,2 PLAYERSHIP OF LOTTERY GAMES Scratch comprises 66%, Jackpot Games 34% of market share (sales) for all lottery products. Lottery players include those consumers who play additional games. The Dec 09/Jan 10 Tracking Study Venn diagram shows cross Playership among all products. Total Scratch playership is 32% Powerball and Scratch at 5% Lotto and Scratch at 1% Powerball, Lotto and Scratch at 9% Powerball, Scratch, Lotto and Cash 5 is 7% Scratch only at 8% Total Powerball playership equals 39% Powerball and Scratch at 5% Powerball, Lotto and Scratch at 9% Powerball, Scratch, Lotto and Cash 5 is 7% Powerball and Lotto at 7% Powerball only at 9% Total Lotto playership is 29% Powerball and Lotto at 7% Powerball, Lotto and Scratch at 9% Powerball, Scratch, Lotto and Cash 5 is 7% Lotto and Scratch at 1% Lotto only at 2% Total Cash 5 playership is 12% Powerball and Cash 5 at 7% Powerball, Cash 5 and Scratch at 9% Powerball, Scratch, Lotto and Cash 5 is 7% Cash 5 and Scratch at 1% Cash 5 only at 2% DEMOGRAPHICS The current target market for Lottery products includes the following profile: Powerball Player Demographics o 75% are 35 years of age or older o 54% are 45 years of age or older o 55% have a college degree o 85% have at least some college or a degree o 68% earn $40,000 and up a year o 29% earn $76,000 and up a year o 52% are male Lotto demographics include older players that tend to be more loyal. o 74% are 45 years of age or older o 87% are 35 years of age or older o 42% have a college degree o 66% have at least some college or a degree o 64% earn $40,000 and up a year o 25% earn $76,000 and up a year o 50/50 male/female Cash 5 Player Demographics o 71% are 45 years of age or older o 93% are 35 years of age or older o 18% have a college degree o 34% have at least some college or a degree o 46% earn $40,000 and up a year o 3% earn $76,000 and up a year o 58% are female Scratch Demographics o 3% earn $76,000 and up a year o 58% are female Mega Millions, MatchPlay and Raffle Player Demographics – Complete demographic analysis to be provided as part of future research AUDIENCES JACKPOT TARGET SEGMENTS The FY06 Segmentation Study identified three distinct player groups the Lottery could market products with some anticipation of a positive return on investment. These segments, Active Fans (segment five), Fun Seeking Realists (segment three) and Dreamers (segment two) comprise 58% of the market and have the greatest opportunity for the Lottery in FY10. Player segments two and four are seen as minimal revenue impact unless jackpots get very high. Jackpot Chasers – Segment One This segment is least aware of lottery games in Colorado. Play Powerball/Lotto only when the jackpots are high. Low play motivations overall; more inclined to play to support a worthy cause and the chance to win a little bit of money. Not dreamers, and are least comfortable with new technology. Least aware of Colorado Lottery and what they do. This segment has the lowest opinion of the lottery. Lowest rating of all corporate image attributes. Don’t see the entertainment value in lottery games. Lowest proportion of Past 12 Months participation in any game; lowest proportion of dollars spent in Past 12 Months on any game. Account for 16% of Past 12 Months lottery players; account for 6% of Past 12 Months lottery spending. Oldest segment with a mean age of 47, most educated, 2nd highest income. Dreamers – Segment Two 2nd highest proportion of dollars spent in Past 12 Months on any game (26%). This segment is 4th highest in proportion of Past 12 Months participation in any game (don’t play as frequently but spend more). Visit casinos. This segment is a big player of Cash 5 and Scratch. Play Powerball/Lotto when the jackpots are high or at the last minute. Account for 18% of Past 12 Months Lottery players; account for 26% of spending Past 12 Months on Lottery games. This segment likes annuity games, games with some control over chances of winning. Participate in spectator sporting events; highest participation in video games. This segment is least likely to visit restaurants, bars or pubs. Tied for third for Internet usage but use it mainly to download music. This segment ranks 2nd highest for paying to download a game. Tied for 2nd highest opinion on corporate image. Feel Colorado Lottery games are marketed in a socially responsible way and the lottery is well managed. Even split on gender, least educated, 2nd youngest segment with a mean age of 44, lowest income, greatest proportion of Hispanics. Fun Seeking Realists - Segment Three Most informed of who lottery is and what they do. Highest proportion of Past 12 Months Players (account for 23% of Past 12 Months lottery players). Account for 19% of spending on any game in Past 12 Months. Spend money on poker outside of casinos. Also bet on horse/dog racing at off-track betting places. Most hours spent on the Internet in a week. Participate in outdoor activities, spectator sports, concerts, festivals and movies. This segment has the highest participation in frequenting restaurants, bars and pubs. Motivated to participate to win a little bit of money, for entertainment or fun and to support worthy causes. Tied with Active Fans for highest favorability of state lottery. See the Lottery as an appropriate way to raise revenue. Feel it is up to the individual to control his/her gaming. Comfortable with technology, feel people have the right to do what they want even if it could harm them. Tied for 2nd highest opinion on corporate image. Skew male; second most educated, highest income, most likely to be non-Hispanic. Dabblers - Segment Four Dabblers are 3rd highest in proportion of Past 12 Months Players of any game (21% of Past 12 Months Players). This segment is 4th in proportion of dollars spent on any game in the Past 12 Months (account for 15% of spending in Past 12 Months). Spend money on poker and black jack online. This segment is most likely to play when jackpot is high. Motivated to play to win a little bit of money and also they dream about winning big. Dabblers have the second lowest opinion of the Lottery overall and rank 2nd to Jackpot Chasers on the need for more controls on gaming. They feel strongly that people deserve only what they have worked for, and feel that things in their life are not as good as they used to be. Even split on gender, second oldest segment. Active Fans – Segment Five This segment accounts for 34% of Past 12 Months spending. This segment accounts for 22% of Past 12 Months Players. 2nd most aware of Colorado’s Lottery games and informed of who Lottery is and what they do. This segment is more likely to spend on higher price point Scratch. Motivated to win a little bit of money, for entertainment or fun and to feel lucky. Enjoy playing Scratch games. Participate in outdoor activities; go to plays, concerts and movies. Participate in a variety of other forms of gaming (although in low levels). This segment is 2nd highest for hours spent online in a week. See the lottery as an appropriate way to raise revenue, innocent form of entertainment and fun to play even if they don’t win. Comfortable with new technology, enjoy a challenge, believe in fate and that life should be enjoyed without the worry of the future. This segment has the highest opinion of corporate image. Skew female, youngest segment with a mean age of 39, well educated, 2nd lowest income. SCRATCH TARGET SEGMENTS A sub-set of the Segmentation Study called Scratch Player Segments was developed to help the Colorado Lottery identify revenue opportunities for those residents who predominately play Scratch Games. These segments identified as Scratch Enthusiasts (segment one), Quick Action Scratchers (segment two) and Scratch Dabblers (segment three) provide a greater understanding of Lottery Scratch Players. Scratch Enthusiasts – Segment One Highest proportion of spending, 2nd highest percentage of players (account for 32% of past year scratch players and 53% of Scratch spending). Segment most aware of Scratch games in Colorado. Purchase all price points of Scratch tickets, more likely than other segments to purchase $10 tickets. Have a positive opinion of corporate image. Like many characteristics of Scratch tickets, especially price and games with a top prize of $100k or more. Likes play style with multiple games or play areas. Prefer Scratch tickets that take longer to play, more so than other segments. Purchase Scratch tickets on impulse and wait until later to scratch them. Like to scratch the ticket slowly. Motivations for play include: the chance to win a little money, for entertainment/fun, to support worthy causes, so they can dream about winning big. Believe it is up the individual to control his/her own gambling. Feel comfortable with new technologies. Life should be enjoyed now with little worry for future. Believe in fate and daydream of winning big. This segment spends the most hours online per week (mean = 10.1) downloading music. Skews female, youngest segment with a mean age of 42.1, least educated and lowest income. Quick Action Scratchers – Segment Two 47% past year Scratch players; account for 33% of Scratch spending. This segment has the 2nd highest proportion of spending. Spend less money than other segments at casinos. Like play styles of matching your numbers to others on the ticket, also like a game with a bonus multiplier. Prefer Scratch tickets that are fast to play. Believe it is up to the individual to control his/her own gambling, lowest percentage agreeing that more controls are needed for where and when people can play lottery games. Motivated by the chance to win a little bit of money, to support worthy causes and for entertainment and fun. This segment is comfortable with new technology. Life should be enjoyed today with little worry for future. Believe in fate; think people deserve only what they’ve worked for. This segment is the most likely to have purchased a product or service directly online. Skews female, mean age of 48.4, most educated, tied with Scratch Dabblers for highest income. Scratch Dabblers – Segment Three 20% of past year Scratch players; 14% of spending. Spend money betting on live horse/dog racing both at the track and at off-track locations. Not as likely as other segments to spend money playing poker or black jack online. Price is the attribute most considered when purchasing Scratch tickets. Prefer Scratch tickets that are fast to play. Likes play styles with multiple games or play areas on one ticket, and match your numbers to others on the ticket. Prefer to win cash, not fond of winning prizes other than cash. Not likely to go to spectator sports or participate in other live entertainment such as concerts or plays. Not as comfortable with new technologies as other segments. Spend 2nd most time online (mean= 7.6 hours/week). Fairly even gender split, oldest segment with a mean age of 49.3, tied with Quick Action Scratchers for highest income; well-educated. RESEARCH Research for the Lottery will come from two sources in FY2012. First Scratch research will primarily reside within the Scratch Contract for Goods and Services with Scientific Games, Inc. Additionally the marketing budget provides additional resources for Tracking/ Playership and Segmentation studies. In August 2011 The Research intelligence Group was awarded the Tracking/Playership and Segmentation projects. Responsibility for research decisions lies with a six person committee consisting of Lottery and Cactus personnel. Research projects will be implemented based on the goals and objectives outlined in the Marketing Plan and strategic needs as defined by the organization. ADVERTISING AWARENESS & PLAYERSHIP TRACKING - JULY-JUNE 2010 METHODOLOGY: The annual Advertising Awareness and Playership Tracking study was a continuation of the improvements that were made in FY09 as part of the revamped tracking study that was the result of a thorough investigation of the possible strategies and available options. The Tracking Study was conducted monthly among 200+ adult residents of Colorado, ages 18 and older, to measure trends in advertising awareness and playership. Random telephone surveys were completed using cell phone as well as land-line service to improve sampling representation and data quality. Every two months the customized section of the survey is updated to track recent advertising or marketing techniques, market/environment conditions or new product preference. KEY FINDINGS: Figures based on FY09 cumulative report. Will be updated when FY10 cumulative report is complete in September 2010 The first quarterly findings report that Overall ad recall for the quarter (56%) was supported by recall of 61% during the January benchmark. In the April/May study this recall rebounded again to 62%. Total ad recall was highest within the 55 to 54 year age group and among these individuals living in moderate-income households. Those with college degrees or post-graduate are will above average in Lottery ad awareness. Ad awareness was significantly below average among younger adults, seniors 65+ and those with high school education or less. Scratch games and messages about jackpots or winnings are the images and messages recalled most often. A large majority or respondents are aware of Powerball billboards. Powerball’s radio advertising is recalled by a relatively small percentage of Coloradoans. Only 23% if Coloradoans have never played a Colorado Lottery game before. The incidence of Cash 5 playership lags far behind all other Lottery games. Compared to the 77% of Coloradoans who have “ever played” any Colorado Lottery game, 56% have played within the last 12 months. The highest incidence levels of past 12 month Lottery play are among consumers with incomes $35-75K, age 45-54, and those having some college education. Past 12 month Lottery playership is lowest among Coloradoans 65 and older, many of whom have fixed or limited income. Powerball’s much higher incidence of play within the prior 12 months was supported by jackpot amounts of over $200 million in March ($276M) and September ($207M). Cash 5 lags behind in past 12 month playership Past 12 month playership: o Total Powerball – 38% o Powerball only – 13% o Powerball and Lotto – 9% o Powerball, Lotto and Scratch – 11% o Total Lotto – 25% o Lotto only – 3% o Lotto and Scratch – 2% o Total Scratch – 30% o Scratch only – 12% o Powerball and Scratch – 5% Within the past 30 days a total of 39% of Coloradoans played any Lottery game. Powerball is leading the Colorado Lottery game played in the prior 30 days. A larger portion of players report spending less money on the Lottery overall in the prior 30 days. The average game spend in the prior 30 days: o Powerball – nearly $25 o Lotto – $20 o Cash 5 – just over $20 The average Scratch player spent more on Scratch than any other game. 84% of Scratch players buy multiple tickets at each purchase. Results show that $5 is a very typical amount spent on Scratch tickets for each purchase A very large majority of Coloradoans are in favor of the Lottery o 34% strongly in favor o 27% somewhat in favor o 14% slightly in favor o 11% neutral o 12% opposed Coloradoans support the Lottery because proceeds benefit the state and they like having jackpots available with chances to win; and the Lottery helps raise money for the state. The Colorado Lottery is widely known for the proceeds supporting State Parks and open space. Only a small percentage of individuals are aware of community projects funded in the past by the Lottery. Retail locations are the most common place where jackpot players look for winning numbers. LOTTO ENHANCEMENT STUDY – JUNE 2010 METHODOLOGY: As a continuation to the New Jackpot games research that was conducted in FY09, a Lotto enhancement study was created to identify possible changes that could be made to the current Lotto product. The study was comprised of two phases. The first was a qualitative, online bulletin board study to gather input and feedback on the various Lotto enhancements being considered. The bulletin board was held over three days and consisted of 96 participants. Of the 8 Lotto enhancements tested (including the current Lotto game), 7 options were featured in the quantitative portion (phase two) of the study. Phase two was a 25-minute strategy and stake exercise conducted among 1,479 individuals (908 panel participants and 571 MyLottery participants) in order to determine sales potential and identify cannibalization to current games. Each game that was of interest in phase one was presented to respondents via Flash in one of five cells. KEY FINDINGS Qualitative: Overall o Overall, participants prefer the fun/excitement of the Lotto Extra multiplier wheel. Current Lotto players prefer Extra, Lotto Ball, Instant and Kicker (in order), primarily for the added chances to win big. Lapsed Lotto players prefer Extra, Lotto, Instant and Kicker. They like new ways to win and more ways to win at least something. They give more lip service to supporting Colorado. o Key drivers are fun/excitement, perceived chance of winning, ‘big enough’ jackpots and something new to play that’s ‘different enough’ from current games. Several participants would play every newly released game for awhile at least. $1 and $2 price points impact game preferences as well as anticipated frequency of play. Participants compare ticket price to chances of winning even small prizes. The $2 ticket price may interfere with spontaneity, fun, excitement; it gives players pause. o Bigger jackpots will overcome some resistance to $2 ticket prices. Lotto Extra o Lotto Extra multiplier, stacked to higher payouts, is more fun/exciting. They like the suspense, the new twist, and having the choice to play the multiplier. o It offers the best of Powerball, with better odds plus benefits for Colorado. o Most say instructions, prizes are straightforward. o A few women are initially unclear about jackpot exclusion from multiplier; need to pick extra numbers; and how the wheel works before watching the draw. o Suggestions: higher payouts, merchandise prizes, color-coded multipliers. Lotto Kicker o Lotto Kicker is exciting/fun and gives players a chance to hit twice. Participants appreciate having the choice to add the Kicker. o Others say it lacks excitement, odds are too long and it feels like separate games. o Some find it confusing until they play, and may not understand if they won. o Suggestions: bigger payouts, shorter Kicker and pick own Kicker. Lotto Instant o Instantly winning is exciting, and $1 is the right price. o But for some, winning a free ticket is not thrilling like winning money. o Suggestions: better payouts and $1 winner instead of free ticket. o Some participants are unclear on whether the free ticket is a quick pick. There is lingering confusion about how the game works, when they’d get the free ticket, how it affects their original ticket and how to track it. Colorado Lotto o It may not generate the level of excitement of some new games, but many intend to continue playing Lotto. It’s an ‘old friend’ that’s still a good game… a fun, low-cost way to hope and ‘dream big.’ o Many justify playing Lotto as a way to support a better Colorado. This is raised more often by lapsed than current player participants. o Several participants play Lotto less and Powerball more. Powerball has higher jackpots, and some claim more success with Powerball than Lotto. o Suggestions: higher payouts on 3, 4 and 5 matches, payouts hitting more often. Lotto Ball o Just like Powerball but for Colorado,’ Lotto Ball has less appeal overall than either Lotto or Powerball. Powerball has more appealing payouts. o Current G3 players rank Lotto Ball second best. More payment options improve the odds of winning something -- and it costs just $1. o Instructions are clear; repetition will help. o Suggestions: bigger mid-range payouts; more winners than Powerball; offer multiplier option for another $1; they want to know the odds. Big Lotto Ball o Big Lotto Ball appeals because it’s new/exciting, there are more payment options and a good range of prizes, and it is state-based. o The $2 cost and similarity to Powerball work against this game. o Participants say instructions; prizes are simple and easy to understand. o Suggestions: $1 price, higher payouts, payout for matching the ball. Lotto Play o Very few participants ranked Lotto Play in their Top 3. Its minimal prize increase is not enough to bring excitement to playing. o Lotto Play is too similar to Lotto -- not different enough to add fun or increase anticipated frequency of playing. o Instructions, prizes are straightforward; the game is simple to understand. o Suggestions: bigger payouts; payouts for 2 matches; offer this or Lotto, not both. Lucky Lotto o Just 2 participants ranked Lucky Lotto in the Top 3. It doesn’t seem new, is ‘lack- luster,’ isn’t different enough from Lotto, plus it costs more. o While payouts for 5 of 6 and 3 of 6 matches are higher, this is not enough to overcome the $2 price or generate excitement -- or it is overlooked. o Instructions are clear to most participants. o Suggestions: bigger payouts; $1 or a multiplier to justify $2. Quantitative: Key FIndings: o At a Total Respondent level, none of the four new Lotto game concept games produced an increase in overall spend for the Colorado Lottery’s range of games, over and above the current range of Colorado games. o In terms of the Total Respondents level, Lotto Instant (15.8) is the game that would stimulate the highest spend among the four individual new concepts. o In terms of the MyLottery sample, Lotto Instant (21.2) would provide the highest individual game spend among the four new concepts. o However, when looking at just the Colorado Lottery ‘MyLottery’ player’s overall Lottery spend, Lotto Kicker is the only concept that would significantly increase total spend on CO Lottery’s range of games. o o Lotto Kicker also increased overall spend among Female respondents and was the clear choice of Hispanic respondents when it came down to the choice question (42% v 22% for Lotto Instant in 2nd place). o Lotto Kicker and Lotto Instant would significantly increase total spend on CO Lottery’s range of games among the 55+ year old age range, but Lotto Instant (18.1) is the game that would provoke the highest new spend among the four new concepts in this age group. o Lotto Instant scores highest of all four concepts for ‘Clarity of Instructions’, ‘Ease of Play’, ‘Name of the Game’, ‘Appeal’, ‘Chance of Winning’ (tied with Lotto Ball) and ‘Likelihood to Play in the Future’. o Lotto Ball had similar metric scores to Lotto Instant throughout the study, but failed to increase overall spend significantly among any sub-group or in total. o Lotto Extra proved an unsuccessful concept, and actually encouraged a decrease in overall Lottery spend across Total, General Population and MyLottery sample frames. o Lotto Extra also saw the lowest individual game spend among the four concept games. o When examining the ‘choice’ tie-breaker, Lotto Instant (29%) edged out Lotto Kicker (28%), but there was no definitive winner. o However, Lotto Kicker appeared to polarize respondents, with 33% claiming it was their least favorite game. Recommendations: o TRiG recommends that the Colorado Lottery tread very carefully with potential plans to alter the current Colorado Lotto game. o With the recent introductions of both MatchPlay and Mega Millions the market appears saturated with drawing games, and the player base has yet to adjust fully. Mega Millions playership within this piece of research has spend at similar levels to MatchPlay. o TRiG recommends that only Lotto Instant be looked at in the short-term as a potential change to the Lotto game. o The polarization of Lotto Kicker as a concept seems to negate some of the positives we have seen within the study, with the most surprising aspect being the final ‘choice’ appeal among the Hispanic market. o This perhaps could lend itself to further investigation. o Lotto Ball appears to be too similar to both Powerball and Mega Millions to have any true value in the marketplace. Lotto Extra failed to generate any real support, mainly due to its poor performance in terms of ‘chance of winning’. POINT-OF-SALE PROGRAM Since its inception the Lottery has used unpaid point-of-sale to help promote games, features and jackpots. The retail environment continues to be extremely important for the success of The Colorado Lottery business. The Colorado Lottery has five primary types of POS advertising including: Playcenter – a freestanding kiosk that provides a valuable in-store footprint and allows for material storage, message display and an area for players to scratch their tickets, fill-out their playslip or learn about Lottery games and proceeds contributions. Point of sale / Point of purchase (POS/POP) – refer to the areas within the retail area, but do not include the Lottery’s playcenter. This includes register displays, parking lot and external signage, and window displays. Scratch Ticket Vending Machines – vending machines stocked with Scratch tickets used at approximately 800 locations. Jackpot Signs Paid POS POS strategy will be developed at quarterly POS summit meetings involving product and sales department staff. Assessment of needs, what works, what doesn’t work, inventory levels and distribution will be part of those meetings. Ongoing POS design and production will be the responsibility of the advertising and product managers with as needed input from sales and corporate account staff. The POS plan-o-gram and Rep Rap will be used to communicate change-out information to sales reps. PLAYCENTER Description: Blue, stand-alone unit where information is stored. Rationale: The playcenter continues to be the primary in-store information center for Lottery product/game messaging at no charge. Topper- Don’t Forget to Play permanent branding piece on top of the playcenter Header- General Lottery games permanent piece that is adhered to the top of the playcenter Featured Game Insert- 17”x11” game-specific printed piece below the header URL strip- Brand strip below the brochure rack with www.coloradolottery.com web site address. Writing surface- Highlights featured Scratch games and lists Scratch games in market by price point and upcoming Scratch games. These are replaced every 4-6 weeks based on new game launches and games currently in market. Poster back- Double-sided Don’t Forget to Play brand piece that includes brand messaging on one side and games on the other. The poster appears on the back of the playcenter and provides additional advertising when the playcenter is placed up against a window or in an open area. Door decal- Non-removable adhesive Colorado Lottery circle decal on the front door serves as a brand identifier within the retail environment. AT THE REGISTER- Description: POS that appears at the point of purchase. Rationale: Materials at the point of sale/purchase area remind consumers to play the games of the Colorado Lottery. The majority of Lottery games purchases are impulse buys, therefore a continued presence at the register is important to increasing sales utilizing quick, readable messages and converting the consumer in purchase mode. Door decal- Non-removable adhesive Colorado Lottery circle decal on the front door serves as a brand identifier within the retail environment. Terminals (Extrema and SciScans)- Digital messaging for consumers who are checking out. CDU Surround- Printed POS with jackpot game messaging to spur impulse purchases. In-Counter strip- Printed piece that is placed inside the counter at the point of purchase and includes featured Scratch game messaging. Register topper- Printed piece that is placed on top of the register and includes featured Scratch game messaging. Penny trays- Trays with Lottery logo on the bottom that hold pennies and winning number reports for customers. 3-tiered manual jackpot signs- Small counter signage that communicates the jackpot amounts for all three Jackpot games. Ticket Checker, sticker and dangler- POS materials that direct consumers to the terminal to check winning numbers. On-counter wire brochure rack- Small brochure rack with 4 placeholders for playslips, how to play information and Lottery brochures. Racks are featured in stores without a Playcenter. Scratch ticket dispensers- Displays printed Scratch cards in the counter to help customers purchase Scratch tickets. Cards are organized by price point in the case. SCRATCH TICKET VENDING MACHINE Description: The Scratch Ticket Vending Machine is placed in select retail locations and allows customers to conveniently purchase their own Scratch tickets. Rationale: The STVM continues to be a convenient way for consumers to purchase Lottery tickets and reminds people to play as they are checking out of the store. There is an opportunity to make Jackpot games available for sale on the STVM as well, further promoting the brand, encouraging crossover play and offering additional convenience. STVM Header- Rectangle printed vinyl that is inserted into the lighted portion of the STVM. The messaging includes a call to action, “Buy Scratch tickets here,” and is designed around the “Don’t Forget to Play” brand look and feel. STVM Slot card- A vinyl-printed piece with coloradolottery.com printed on it placed above the slot on the machine and offers consumers a resource for finding more information on the Lottery. Wobblers- Non-adhesive printed pieces that are adhered to the STVM. Wobblers advertise featured Scratch games. Signage- Retail locations display various signage free of charge that advertise the Lottery brand, products/games and jackpot amounts. 2-tiered automatic update window signs- New digital signs that will automatically update Lotto and Powerball jackpot numbers to be displayed in the windows and at customer service within retail locations. Don’t Forget to Play Door decals- New “Don’t Forget to Play” window decals were launched in March 2008 to reflect the new brand tag line. Door decals are two sizes for retail locations to display on designated doors/windows. An alternative adhesive is being investigated for testing prior to the launch of the new design in January 2010 to ensure that decals stick no matter what the conditions. Don’t Forget to Play/games window posters- New Don’t Forget to Play window posters were launched in May 2008 with the re-design of the playcenter. Window posters are two-sided for dual messaging –“Don’t Forget to Play” and names of all Lottery games. Powerball jackpot lighted window signs- Digital signs that are currently displayed in windows of retail locations. Signs update automatically via satellite; the Lottery is currently investigating opportunities to update the signs to include Lotto and a simple, automatic updating system. Powerball/Lotto jackpot lighted in-store and window signs- Digital signs featuring both Powerball and Lotto and that update directly off the Extrema terminal. Both window and in-store version were created to provide optimal readability. Pump toppers- POS materials that advertise a featured Scratch game at the gas pump prompting people to go inside and purchase. Lucky Store AdLight Sign-in-store lighted signs to advertise Powerball and Lotto Lucky Stores Lucky Store Metal Tacker sign- Embossed metal sign for retailers that advertises Cash 5 and Scratch top prize sold. Lucky Store Poster- in-store poster to advertise general Lottery top prize winner. Retail Checks- Large and small-sized checks to advertise winners sold in retail location. Brochures- Brochures include playslips, Play Smart, Proceeds, how to play flyers, game overviews and Power Play brochure. These are organized in the brochure racks in the playcenter and in wire brochure racks in stores without a playcenter. o Game specific playslips- Pre-printed forms where consumers can fill in their numbers. There are playslips for Cash 5, Powerball and Lotto. Playslips are slated to be revised with the new brand identity. o Game specific how to play flyers- Printed brochures that explain how to play each of the Jackpot games. There are English and Spanish versions available. Cash 5 and Lotto are being updated with the “Don’t Forget to Play” brand. Powerball will be updated after the matrix change. o Play Smart- Two-sided brochure slip to support the Play Smart/Play Responsibly communications campaign that provides information and resource on problem gambling. o Proceeds-Tri-fold brochure to inform consumers of Lottery proceeds contributions throughout the state – broken up into counties, featuring photos from 5-6 proceeds projects. The brochure was recently reprinted; a revised version will be included with new brand identity launch in January 2009. o Game overview Brochure- Create a brochure that incorporates all of the Lottery games and provides an education component to engage non-players and encourage crossover play.
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