The Maryland Lottery can't air television commercials or buy other advertising for at least the next three weeks because the company that produced and purchased marketing spots for the state's games of chance went out of business.
The Baltimore advertising firm Eisner Communications unexpectedly closed Friday, saying it had run out of money, leaving a number of large clients in the lurch. The National Aquarium in Baltimore, Provident Bank and Florida-based Spirit Airlines also are left looking for new advertising agencies.
But the Maryland Lottery, which relies on heavy advertising for ticket sales, could be particularly hard hit because state procurement laws make it difficult for the agency to buy marketing spots directly from television stations, newspapers and other media companies. An outside party generally has to buy the spots under a contract with the state, said Jimmy White, a lottery spokesman.
White said the agency would put out an emergency bid this week to find another advertising firm. The lottery hopes to have a new agency in place within the next two to three weeks.
"It all comes to a halt until we can get another agency on board," he said.
Daily broadcasts of Maryland Lottery drawings will continue.
Lottery officials learned of Eisner's demise Friday and are working to develop in-house campaigns to promote the games until commercials are aired again. White said the agency would do more in-store promotions and other marketing to take up the advertising slack.
"We certainly depend on advertising to accomplish what we need to do," White said yesterday. "And if we can't, we have to find other ways.
"It's not as if nothing is happening. It's just the very mass media things like television and radio spots aren't occurring right now."
Sales for the lottery topped $1.5 billion for the first time in the fiscal year that ended in June. Lottery retailers earned more than $102 million in commissions, and players took home more than $900 million in prizes.
John McLaughlin, a local advertising consultant who was once a vice president at Gray, Kirk/VanSant (now GKV Communications) in Baltimore, said Maryland Lottery advertising has succeeded in entertaining people — a recent spot showcased a man dressed as a pink poodle — so the short-term pause shouldn't hurt sales.
"We human beings are always hoping for miracles and we go and buy our $5 tickets," he said.
Joshua Schrader, a sales associate at Midway Liquors in Joppa where lottery tickets are sold, said he wasn't concerned about the loss in advertising:
"From my experience, people who buy them just always buy them and they don't come in because of a commercial. Advertising doesn't really affect it."
Eisner first won the $60 million advertising contract with the lottery in 1997. It lasted five years and Eisner bid again for the business in 2002, beating out several firms. The current contract was set to expire in May.
Eisner, once one of Baltimore's most successful advertising agencies, said Friday that it did not have enough money to pay its employees or keep the business going. The firm, which employed at least 50 people, lost a $20 million US Airways account last year after the Arlington, Va.-based airline merged with America West Airlines. Eisner's financial situation never improved after that.
Eisner created radio, TV and newspaper spots for its clients. It paid media outlets to run the spots using payments from its clients.
Private companies such as Provident can buy advertising directly from media companies. But without an outside advertising firm, state agencies such as the lottery would have to get such spending decisions approved by the Maryland Department of Budget and Management, White said.
"It would slow things down terribly trying to place that way," White said.
Provident contracted with Eisner in December 2005, but terminated the $3 million contract on Oct. 31. A bank marketing officer wouldn't go into detail about the termination but said there were a "number of issues" that caused concern.
Provident said it is working directly with media companies to continue running advertisements throughout the rest of the year.
"Our November and December programming will run uninterrupted," said Nancy Alperstein, Provident advertising and communications manager. "It's the program we have and we're working directly with the stations to see that schedule to fruition."
Area television station executives either would not comment or did not return telephone calls about Eisner yesterday.
Eisner landed the $2 million advertising and communications account at Baltimore's aquarium in 2002. It promoted the tourist attraction during a high-profile time when the aquarium was undergoing an $88 million expansion that included opening a new wing. The company also created commercials to promote the Animal Planet Australia: Wild Extremes exhibit at the aquarium.
Aquarium officials said they would continue to run ads through the rest of the year, but they have made no decisions on where to take their business.
GKV Communications in Baltimore is interested in taking over Eisner accounts and plans to bid on the lottery, said senior vice president Kevin Kempske. The firm hired 10 former Eisner employees and plans to bring more on board if it wins more accounts.
Other firms are weighing their options about the lottery.
"I don't think we've decided," said Michael O'Brien, who heads public relations at MGH in Owings Mills. "I think we want to see the [request for proposal] first, but I'd think we'd be open to getting any of the remaining contracts."