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Trying to Sell California's Lottery

California LotteryCalifornia Lottery: Trying to Sell California's Lottery

The lyric "California, here we come, right back where we started from" is part of:

a) A song heard by millions of viewers when the series "The O.C." appears on Fox Broadcasting.

b) A song that perfectly captures the bizarre circumstances of what may well be the strangest advertising account review ever to take place in the West.

c) Both of the above.

(The answer is, of course, "c," and those who chose it must read daily newspapers enough to recognize a column-opening gambit when they see one.)

The reason the lyrics fit the situation so well is because several California agencies are indeed "right back where they started from," preparing for the third time in 18 months to compete for the account of the California Lottery Commission.

The third attempt was made necessary in April, when the commission in effect nullified the results of two previous long and expensive reviews, both undone by the filing of protests - and lawsuits - by agencies that were not selected for the assignment.

The commission decided to open the new review to any agency that wanted to take part, whether or not it had been considered before. Ten agencies and teams of agencies have agreed to participate.

(The field totaled 11 until last week, when the San Francisco office of J. Walter Thompson, part of the WPP Group, withdrew, citing what a spokesman, Owen Dougherty, described as the press of its workload for current clients.)

For those wondering why agencies would spend so much time and treasure to try to capture such a contentious, even snake-bit assignment, it turns out there are 100 million reasons: total billings on the four-year contract that the commission is scheduled to award in March are estimated at $100 million. That makes the assignment one of the largest accounts in review at a time when Madison Avenue is still struggling to emerge from its worst economic downturn in decades.

"It's like our version of 'The Twilight Zone,' " an executive at one California agency said, "but for a $100 million account, are you kidding?'' The executive spoke on the condition of anonymity, citing a request from the commission that agencies taking part in the review not discuss it with reporters.

Another reason agencies are going through the review again is that the commission has changed some procedures and rules from the last two times.

"The lottery commission has made a lot of adjustments to make the process more inclusive and agency-friendly," said Jerry Gibbons, who works out of San Francisco as executive vice president for the Western region of the American Association of Advertising Agencies, a trade organization.

For instance, the commission previously required a $50 million performance bond from the agency it selected, Mr. Gibbons said, but that has been reduced to $3 million to $4 million. And materials for the third review were purged of language, he added, that would have required the winning agency to pay for the defense of the commission and the State of California against any further protests or lawsuits stemming from another decision.

"Whether or not it will go smoothly, you still don't know, because an agency can still protest," Mr. Gibbons said. "But the commission is really reaching out to deal with issues that were problems for our industry."

Not everyone is convinced the third time will be the charm.

"I can assure you that any other pitch for an account of this size, there'd be 100 agencies taking part," an executive at another California agency said.

The agency that has handled the account for the last five years, the Los Angeles office of Grey Worldwide, part of the Grey Global Group, will try to keep it. The lottery commission granted an interim extension of the Grey contract in July; it is to remain in effect until the latest review is completed.

John Crosson, president at Grey Los Angeles, declined to comment on his agency's participation. Grey is taking part even though the two other reviews ended with its dismissal and the awarding of the assignment to three other agencies. (Yes, in keeping with the oddness of the entire process, there were three.)

Those three agencies are also seeking the account a third time. They are the Los Angeles office of DDB Worldwide, part of the Omnicom Group; the San Francisco office of Foote Cone & Belding, owned by the Interpublic Group of Companies; and the Los Angeles office of McCann-Erickson Worldwide Advertising, part of the McCann-Erickson World Group division of Interpublic.

Two other Omnicom agencies are taking part in the third review: BBDO West in Los Angeles and San Francisco, part of the BBDO Worldwide division, and the San Francisco office of TBWA/Chiat/Day, part of the TBWA Worldwide division. A third Interpublic agency is participating, Dailey & Associates in West Hollywood, Calif. And one WPP agency is taking part, the San Francisco office of Young & Rubicam Advertising, part of the Young & Rubicam division.

The lottery commission ruled last week that multiple participants owned by large agency companies may team up with the same media agency in seeking the account. So DDB and TBWA/Chiat/Day, for example, could both compete in tandem with the Omnicom media agency OMD. That issue was a stumbling block in the two previous reviews.

Of the four independent agencies taking part this time, three have teamed up in an effort they call Triple Play. (Sounds like a lottery game.) They are the Los Angeles office of Horizon Media; Runyon Saltzman & Einhorn in Sacramento, where the lottery commission is also based; and the Beverly Hills office of Wong Doody. The fourth independent, going solo, is Ground Zero in Marina del Rey, Calif.

The lottery commission is likely to narrow the field to three agencies after Jan. 1 and then identify a winner by Feb. 25, followed by final approval - for what it hopes is the last time for some time - at a meeting in March.

New York Times

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