CJRW wins $34.5M contract to plug Arkansas lottery

CJRW has been awarded a five-year, $34.5 million advertising, marketing and public relations contract for the Arkansas Scholarship Lottery pending a 14-day protest period and subsequent review.

The procurement office for the state's Department of Finance and Administration posted the "anticipation to award notice" on its website Tuesday. CJRW, a Little Rock firm that is also under contract with the Arkansas Department of Parks and Tourism and the Arkansas Economic Development Commission, was selected by a three-person evaluation committee.

Other finalists were Mangan Holcomb Partners and Ghidotti-Vines, a partnership between Ghidotti Communications and Vines Media. Mangan Holcomb Partners has had the account for the past 18 months.

Expected start date of the contract is Jan. 8. Both CJRW and the lottery can agree to two additional one-year terms beyond the initial five-year contract.

CJRW executive Gary Heathcott declined to comment on the contract until it is officially awarded and the 14-day protest period is complete.

Mangan Holcomb Partners and Ghidotti-Vines have the option of protesting the decision by Dec. 20. Protests are evaluated by the state's procurement director, Ed Armstrong. Department of Finance and Administration spokesman Jake Bleed said protests are generally evaluated "in a timely manner."

Mangan Holcomb President Sharon Vogelphol wrote in an email that her company would be evaluating its options after learning it would no longer be handling the contract.

"We will be in contact with the Office of State Procurement to understand what the next steps in the process will be," Vogelphol wrote.

Ghidotti CEO Natalie Ghidotti said she did not plan a protest on behalf of Ghidotti-Vines.

[EMAIL UPDATES: Sign up for free breaking alerts and daily emails with the day's top headlines]

"Of course, we're disappointed with the news," Ghidotti wrote. "We had some excellent, results-focused ideas for the Lottery, and were excited to have the opportunity to implement those, but we understand how this process goes. I wish the best of luck to the Lottery team and their new marketing partner!"

Finding a new marketing and advertising firm was viewed by the agency as important in its attempt to boost sales and net proceeds. In its request for presentations from marketing and ad agencies, the lottery said it wanted to improve its sales by "recruiting new players, increasing frequency of less committed players, and protecting the play of regular players."

During fiscal 2016 the lottery generated sales of $456 million but noted in its request to advertising and marketing firms that "a historic billion-dollar Powerball jackpot in February 2016 helped foster sales that may be difficult to match in future years."

Net proceeds for the lottery peaked at $97.5 million in fiscal 2012 and were $85 million in fiscal 2016. For the first four months of fiscal 2017, the net proceeds are $25.1 million, up $1.2 million for the same time period last year.

Lottery revenue for the first four months of fiscal 2017 is $140.5 million.

Camelot Gaming Services, a London-based consulting firm, entered into a contract with the lottery in November to help increase sales. Projected revenue for fiscal 2017 is $463 million, $517 million in fiscal 2018 and $615 million by 2021.

Proceeds for college scholarships are estimated to hit $81 million in 2017 and $109 million by 2021, according to Camelot's projections.

Asked how a new marketing firm might help improve sales, Bleed said the lottery would "happily provide a comment at the appropriate time. Since we are in the protest period of the procurement process, we'll let that play out."

Evaluation committee members included Esperanza Massana of the Arkansas Economic Development Commission, Joe David Rice of the Parks and Tourism Department and Donna Bragg of the Arkansas Scholarship Lottery.

CJRW's pitch to the committee focused on "strong brand positioning and equity, heightened awareness of and support in leveraging new opportunities, a highly engaged target constituency, and highly innovative approaches to public education and outreach."

When the lottery contract was previously available, CJRW passed because it was viewed internally as a conflict of interest with its client work for Oaklawn Racing and Gaming in Hot Springs. Officials with CJRW and Oaklawn said they did not consider there to be a conflict of interest.

CJRW currently holds the contract with the state Department of Parks and Tourism. That state account, worth about $15 million annually, will be open for bids in March.

Finalists for the state's Parks and Tourism Department account will be selected in January. CJRW or firms operated by its founders have held the tourism account since 1979.

Presentations from selected agencies will be made March 21 to a nine-member panel.

A Section on 12/07/2016

Upcoming Events