The battle for an Arkansas Scholarship Lottery marketing contract worth more than $5 million a year is down to three Little Rock advertising finalists. Mangan Holcomb Partners, CJRW and Ghidotti-Vines were scheduled to present their proposals Friday at the Office of State Procurement in Little Rock.
Mangan Holcomb now holds the contract and believes that its performance speaks for itself. The lottery generated sales for $456 million in the 2016 fiscal year, a gain of almost 12 percent from 2015, although part of the increase was likely fueled by a billion-dollar Powerball jackpot in February.
Under a five-year plan developed by a London-based consultancy, Camelot Global Services, the advertising contract would rise from $5 million to $6 million next year, then up to a target budget of $7.5 million in 2020. The lottery sold its first tickets in 2009 and has since provided more than $600 million in college scholarships.
Friday’s planned presentations were not open to the press or public because the judging group is not covered by the state’s Freedom of Information Act, according to spokesman Jake Bleed of the Arkansas Department of Finance & Administration, the agency that oversees the Office of the Arkansas Lottery. Bleed said the bid process requires the state to form a technical evaluation committee to hear presentations and offer recommendations.
The lottery presentations were the talk of Little Rock’s advertising world partly because finalist CJRW represents Oaklawn Park, a client since 1974, when the agency was known as Cranford Johnson & Hunt. Because Oaklawn competes with the lottery for gaming dollars, it is listed as a lottery competitor in Camelot’s five-year business plan, which was issued in March and included as part of the bid solicitation document that went out to ad agencies.
The document says any agency representing a client that could be seen as a conflict must report the fact to lottery officials within 15 days. While Bleed wouldn’t comment on CJRW and Oaklawn specifically, he said that “members of the technical evaluation committee will score responses from vendors to that requirement, meaning any conflicts disclosed here could affect scoring of the contract and its ultimate award.”
Gary Heathcott, the longtime Little Rock adman involved in CJRW’s pitch, said “the lottery didn’t see it as a conflict and neither did Oaklawn; we asked specifically at the outset, and before we went forward, we sought approval from both sides.”
An Oaklawn representative confirmed that the racetrack has no objection to CJRW’s bid for the lottery work. “We have been supportive of the Arkansas Lottery since its inception because of the scholarships the program provides to Arkansas students,” David Longinotti said in an email. “If CJRW can help the Lottery grow the scholarship dollars available to Arkansans, we are fully supportive.”
The ‘Heathcott Effect’
Heathcott said that should CJRW win the lottery bid, “completely separate teams would work for the lottery and for Oaklawn.”
He grew animated in reply to what some advertising observers have called “the Heathcott effect” — the perception that Heathcott’s widely known conservative views are helping CJRW land work in a deeply red state.
“I’ve been in this business for 43 years, through success and failure, but I’ve always been a target,” he said. “It’s a very cutthroat business. But I have never solicited an account represented by another Arkansas-based marketing firm at the time. It’s my policy not to knock on the door of other people’s clients.”
An open request for bids is another matter, of course.
Heathcott also said that CJRW now has only three state agencies as clients — the Arkansas Parks & Tourism Commission, the Arkansas Economic Development Commission and the Arkansas State Police. He also said that several other local ad firms have far more state agencies as clients, though he concedes that Parks & Tourism is the biggest contract of all at more than $14 million a year.
Aristotle Inc. gets part of that payday for running the Arkansas.com website, though the state is looking for a single agency of record and is expected to select one next year.