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MZD takes the Hoosier lottery over goal.

MZD TAKES THE HOOSIER LOTTERY OVER GOAL

Rrrrrrip! Scratch, scratch, scratch, scratch, scratch! Match the numbers. You are either rich, semirich, slightly rich or you blew a buck.

Unless you live in a cave, you probably noticed when the fun and games of the Indiana State Lottery exploded last October. Since then, it has had a couple of high-profile personnel problems and a printing glitch that made "oops!" out of the "Hoops" game. Nevertheless, the lottery's approval rating, which started as astronomical, has remained high. "In our most recent research we asked, 'Do you think the lottery is well-run and is the lottery honest?'" says Deputy Director David Hansen, the number two man at the lottery. "The overall rating we got was 85 percent."

The drum started to beat seven months ago and the beat goes on with fresh action month after month. Coming up by May are new, "on-line" games. "Customers use what we call a play slip," explains Hansen. "You fill out the numbers you want and the play slip is fed into a computer. It produces a ticket. There will be about 2,000 locations with a terminal where you can play. It is like Lotto in Illinois, which is very popular."

According to Hoosier Lottery Director John R. Weliever, "Tickets will be available around April 30, a month before the legally mandated starting date of June 1."

"GTECH in Providence will provide the computer equipment and services," says Hansen. The first games will be a three-digit numbers game and a Hoosier Lotto Game. With the new equipment the lottery can move into Lotto, Pick-4 and Keno. GTECH suggests that Indiana join a multistate lottery called Lotto America. It includes every state bordering Indiana, where GTECH also provides on-line service. Adds Hansen: "All of these possibilities should boost business."

And business is already booming. In the first fiscal year ending in June, the lottery is expected to rake in more than $300 million, pay out $150 million and enrich the state coffers by $100 million. That $50 million difference will go to pay the costs of administration, to vendors and suppliers - and for a lot of promotion.

A $5 million budget to keep customers excited and informed makes the lottery the largest promotion client of any state agency. It is among the top 25 consumer promotion spenders in Indiana, and is a plum account at the Montgomery Zukerman Davis, Inc., advertising agency in Indianapolis.

MZD earned its first fee with a socko pregame blitz that helped set a nationwide record for start-up sales. In the first 24 hours, nearly 8.2 million tickets were sold at $1 each. The tally was $21.8 million for the first week, and $61 million for the first four weeks. It took a lot of scratching to haul in all that scratch. But how did the lottery's jolting hoopla happen?

It started last July with four advertising agency presentations and a selection play-off. Proposals were reviewed by an evaluation committee including Hansen, the top advertising executive from the Florida Lottery as an impartial observer and two members of the Lottery Commission. The commission is a bipartisan group made up of five respected citizens appointed from cities around the state. They picked MZD.

Its people started to work immediately with the experienced Indiana Lottery staff. Hansen brings 17 years of experience to the job. He started in the Michigan lottery as an advertising and public relations man, and went on to guide lotteries in Kentucky, Iowa, New York, Missouri, West Virginia, Montana, Wisconsin, Florida and Costa Rica.

Director of Administration Marty Hartman handles prize payment, facilities, accounting and data processing. She also has several years of experience, including a stint as operations director of Colorado's lottery. Retailer Relations Coordinator Ann Tucker worked on the Missouri lottery and is responsible for licensing, customer service and telemarketing.

Product Development Manager Michael J. Kneffel is an ex-advertising executive and an alumnus of the Michigan and Kentucky lotteries. He's involved in developing promotion ideas, tracking sales, conducting research and planning games.

Combined, these veterans have more than a quarter-century of lottery experience. They are the experts who teamed up with MZD partner and management supervisor, Alan Zukerman; account supervisor, Joe Carman; and account executive, Norman Wilkins.

The group developed a marketing plan that was as thorough as any battle strategy to come out of the Pentagon. It had to be. They only had 73 days, including weekends, before the first game in October. The plan contained sections on budget, tickets, vendors, distribution, prize awards and other operating details.

Information in the plan also dispelled the myth that only less-educated, low-income people play the lottery.

According to Hansen, the information collected nationally says "lottery players are middle American. They are what we call in VALS (values and lifestyle) research 'belongers' who accept what is apple pie. They are very much station wagon- or pickup truck-type people as opposed to yuppies, who are not particularly good lottery customers. They're just your average, middle-class people, heavily blue-collar, craft and service workers. Middle everything: middle-income, middle-aged, middle-education."

"Our research tends to confirm what every other state has found out about their customers," says Hansen. "We don't really target market at this point. Our advertising approach is more shotgun and general."

MZD's initial marketing plan also contained some basic creative information. The logotype of a red, Indy 500 checkered flag swooshing through the air was part of the agency's winning presentation - so they had a start. This symbol was scattered across all of the advertising and sales promotion materials: banners, posters, counter cards, window stickers, door exit signs, hats, T-shirts and Key chains.

"The first commercial was a 10-second spot," says Joe Carman, account supervisor. "We called it the 'Big Tease' and it showed a guy falling backward in a chair and used the line, 'This is going to be big, really big.' It said the lottery was coming on the 13th."

The second spots were frenetic 60-second and 30-second spots with the Pointer Sisters singing a variation on their hit "So Excited." There were "dancers around them from all walks of life and it turned into a New Year's Eve party with confetti, balloons and streamers," says Carman.

"Then," Carman goes on, "we did what we called 'Hoosier Holiday' with a sleigh, horses and top-hatted footmen driving through a winter scene. It was stock footage. We took a step back in time and put the words across the bottom of the screen with a bouncing ball so people could sing along."

The latest commercial, produced by Thomas Productions of Indianapolis, is for "Double Dollars." It starts with boy twins and girl twins ice-skating and socializing. Enter a nerd who is suddenly bookended by the two female redheads. They think he is irresistible because he scratches and wins a pile of money. One taps lovingly on the frame of his horn-rimmed glasses while the other whispers (or blows) in his ear. Music and shots are reminiscent of commercials for another "double" product that promotes a mint flavor, not currency. Chew that over.

"We use television to raise awareness, introduce new games, educate people on the elements of the game explain the prize structure and tell them the amount of money to be won," says Carman. "For the new on-line game television spots we're thinking of an educational teaser campaign to explain what the game will be like and how to play. There may be demonstrations in the shopping malls."

There have been separate campaigns for every game, including Hoosier Millionaire, Hoosier Holiday Millionaire, Hoosier Hoops, Fast Cash, More Fast Cash and Double Dollars. Soon there will be two more. "Big promotions are done for the big prize games and mini-campaigns for the smaller ones," Carman explains.

The tonality of the creative work is colorful, exciting, humorous and fun. It is handled by Burl Seslar, vice president of creative; Kurt Conner, art director; Mike Soper, writer and art director; and practically everybody in the creative department at MZD.

The distribution of funds among media that looked effective in the plan and which has been used so far is: television, 50 percent; newspaper, 20 percent radio, 15 percent; and outdoor, 5 percent. "We have not used magazines or direct mail," says Hansen.

Much of the television excitement is the commission's weekly prize give-away TV shows. According to plan, a flagship station had to be selected. WTTV-TV in Indianapolis won out over five other television stations and production companies. In all, 10 stations broadcast the weekly, 30-minute show at 7:30 on Saturday evening, on which Hoosier millionaires are made.

The arrangement is a barter deal. Each network station trades the 30 minutes for three minutes of commercials it sells to local sponsors. WTTV also agreed to furnish live airtime seven nights a week when daily games, such as Lotto, begin. The minutes are all choice spots because lottery shows tend to be the highest-rated in their time periods.

Events marketing, especially the lottery's star-studded, balloon-filled opening festivities, also play a big role in MZD's master plan. "Michael Kneffel and Alan Hogan of the lottery staff spearhead the work and we help," says Carman. "We worked on the opening-day festivities, on Friday the 13th. We had kickoff events in Indianapolis, Muncie, South Bend, Fort Wayne, Gary, Clarksville, Evansville and Terre Haute."

Thousands of people gathered in plazas and marts, bands played, TV and radio stations broadcast live and a thousand tickets were given away free. Giant tickets were scratched off and prizes given to charities. At the Pan Am Plaza in Indianapolis more than 1,500 people watched an "opening ribbon cutting," and did their own scratching as 30,000 red and white balloons soared and dotted the blue sky. "A big day," Carman recalls.

Other suppliers beside MZD helped get the games airborne and keep them flying. Start-up consultants were from the Lottery Support Group, Inc., in Atlanta. Webcraft Games, Inc., in North Brunswick, N.J., prints the tickets.

Other indispensables are the retailers who sell the tickets. There are some big names: Marsh Supermarkets, Inc., and their Village Pantry stores; Kroger Co. grocery stores; United Speedway, Bonded and Checkers filling stations; Osco Drug Co. and an assortment of hardware stores, credit unions, bookstores, tanning salons, liquor stores, bars, variety stores, restaurants and whatever. They tend to have two characteristics in common. They enjoy heavy, in-and-out traffic and have sales of less than $20 with change, which makes an impulse ticket purchase a natural. In return, vendors get $25 for every pack of 500 tickets, satisfy their customers and have the potential to increase their business because of the added traffic.

Although there was some resistance to a lottery in Indiana before the "yea" vote in May 1989, this seems to have dissipated. One reason may be the do-good aspects. The "Build Indiana" Fund receives 85 percent of the state's take for special projects. Teachers pensions receive 11 percent, and 5 percent goes to police and fire fighters pensions. The money would have to be raised some way.

Not everybody plays the lottery in Indiana but a sizeable number do. "Sales are fairly well-distributed across the state," says MZD's Carman. "Of the eight different regions, there is work to be done up in the northwest corner and the southeast corner because of the proximity of Ohio and Illinois with much bigger games. But we are extremely pleased with the results."

"One thing that was lacking in our original marketing plan was any past sales data," Hansen comments. "Our projected income for the first year was $200 million. We have now revised that to $300 million." There was no track record for Indiana and no way to judge the pent-up enthusiasm. "The staff at the lottery had to make some assumptions about what the public was going to do."

Looks like the lottery and the public are going to do just fine.

PHOTO : 'Hoosier Hoops' television spot created by Montgomery Zukerman Davis
COPYRIGHT 1990 Curtis Magazine Group, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Montgomery Zukerman Davis Inc.; Indiana
Author:Johnson, Doug
Publication:Indiana Business Magazine
Date:Apr 1, 1990
Words:1998
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