Whither the Arkansas Lottery? (Craig Douglass On Consumers)

Having long been a supporter of state lotteries for the funding of public programs, I’m compelled to admit the promotion of the Arkansas Scholarship Lottery continues to be a puzzlement. By promotion I mean the marketing communications strategy targeting Arkansas consumers. (In the spirit of full disclosure, our company applied to compete for the original lottery advertising account, but was denied the opportunity because we had never conducted an audit on our own business.)

Lotteries have been around for hundreds of years. In fact, the building of the fledgling American colonies — their churches, libraries, roads, bridges, colleges and other public works — were funded by lotteries. Lottery proceeds also helped bankroll the American Revolution and the French and Indian Wars. Local lottery net revenue even financed Princeton, the University of Pennsylvania and Columbia University. Today, 43 states, plus the District of Columbia, run lotteries for various public purposes, many of which benefit education.

With such a long history, and knowledge of the experience enjoyed by so many states prior to Arkansas voters approving our own lottery, it would seem lottery managers would understand how to adjust marketing strategies to account for changes in the economy, as well as the maturation of the retail experience, which is at the heart of why consumers purchase lottery tickets.

Don’t misunderstand. The current executives at the Arkansas Scholarship Lottery are good people attempting to do a good job to provide adequate funding for college scholarships. More than 30,000 students and their families in each of the past three years have benefited from lottery efforts.

But why the mercurial results? Our primary take on the question is the lottery has never been established as a proprietary Arkansas brand. Its original positioning, which continues in part today, was more transactional than experiential. And the fact that the key managers of the startup lottery were South Carolinians, not knowing or understanding Arkansas or our state’s consumer culture, didn’t help. The advertising was even “cookie cutter” and “canned,” not produced for an Arkansas audience.

Since the first scratch-off instant ticket was sold in September 2009, what has been established as the emotional connection between Arkansas consumers and the Arkansas Scholarship Lottery? Is it the fun or the cause, the excitement of winning or the promise of scholarships? What motivates Arkansas consumers to part with some discretionary income — what’s left after buying gasoline or sundries at a convenience store — on a lottery ticket? Are those who regularly play the lottery not playing as much? Are new players being recruited by effective advertising and public relations?

Player fatigue was recently cited as one reason for a decline of $33 million in ticket sales in fiscal 2013. Fatigue? It’s not up to the lottery consumer to stay energized with anticipation of new games, prizes or promotions. It is, of course, the lottery’s responsibility to keep the games and the rewards fresh, exciting and part of the everyday consumer experience — a winning experience.

Winning by playing the lottery means cash prizes, of course. But an effective Arkansas lottery brand would also mean consumers who participate in the lottery experience a “win” simply by playing, by feeling a sense of optimism and the thrill of the chase or the chance. A winning lottery brand should also associate the local retailer with the lottery player by incorporating active and interactive merchandising into the ticket-buying experience. (Video terminals at lottery retailers have been a step in the right direction, but they could be better promoted as part of advertising the games, including the Natural State Jackpot.) And a winning experience should always have as its foundation the awarding of college scholarships, a notion that many consumers use as a prima facie justification for playing.

Lottery executives might very well say they agree with the above and are executing that kind of strategy. If they are, it is not coming through in advertising, promotion or public relations, which is almost nonexistent in the current lottery marketing mix. And it certainly is not resulting in incremental sales.

Next month we will look at branding ideas that may help increase sales and make the Arkansas Scholarship Lottery truly Arkansas’ own.

Craig Douglass is a Little Rock advertising agency owner and marketing and research consultant. He is president of Craig Douglass Communications Inc.