Questions and Responses Request for Proposal (RFP) #50077 Lead Agency Advertising Services

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2 Questions and Responses Request for Proposal (RFP) #50077 Lead Agency Advertising Services Question 1: Can we submit proposals via ? Phase I Submittals may not be submitted by fax or electronic transmission (i.e., ). Please see RFP #50077, section IV. Phase I Submittals Packaging and Delivery for more information regarding delivery requirements. Question 2: If we re a Small Business Enterprise with a partner media agency that does +$50 revenue can we still submit a proposal or would the partner media firm have to submit the proposal? Yes, you may submit a proposal so long as the partner media agency meets all of the other Minimum Agency Qualifications: have a minimum of 50 employees, have had at least $20 million in revenue for calendar year 2016, have a minimum of 15% of the agency s work product for calendar year 2016 in digital marketing efforts, be legal business entities licensed to do business in California, have an existing office in California and maintain it for the duration of the contract, and meet the requirements as set forth in Section II, Phase I Submittals of the RFP. However, assuming you are a joint venture, only one proposal needs to be submitted encompassing the joint venture between your agency and the partner media agency. Question 3: My company is interested to participate as a sub-contractor to a prime; do you know how I can get in front of some prime contractor candidates? In order to ensure the most competitive process, the Lottery will not release the names of agencies submitting a written intent to bid and/or participating in this RFP process until after an apparent successful agency has been announced. Question 4: As the incumbent, is David & Goliath pitching to keep the account and are they eligible to win again? In order to ensure the most competitive process, the Lottery will not release the names of agencies submitting a written intent to bid and/or participating in this RFP process until after an apparent successful agency has been announced. Any agency or joint venture meeting the Minimum Agency Qualifications may respond to the RFP and upon successfully completing the evaluation process identified in the RFP, may be awarded a contract. Question 5: Do you have a list of agencies interested in this RFP? In order to ensure the most competitive process, the Lottery will not release the names of agencies submitting a written intent to bid and/or participating in this RFP process until after an apparent successful agency has been announced. October 12, RFP #50077

3 Question 6: Are you able to share how many agencies are involved in the pitch, and whether there will be a narrowing of the field as we move through the process? In order to ensure the most competitive process, the Lottery will not release the names of agencies submitting a written intent to bid and/or participating in this RFP process until after an apparent successful agency has been announced. The Lottery will conduct a fair and impartial evaluation of proposals received in accordance with the RFP. Agencies that achieve a qualifying rating during each phase will advance. The Lottery s evaluation process is explained in the RFP sections II.B-H. Question 7: Can you please clarify for me if the CA Lottery RFP is open to any agency that can prove it qualifies or if it is invitation only? The RFP is open to any agency or joint venture that meets the RFP s Minimum Qualifications. Please see RFP #50077, section I.F. Minimum Agency Qualifications for a description of the qualifications. In a joint venture, at least one of the independent agencies must meet all of the Minimum Agency Qualifications. Question 8: Is there a list of participants that is publicly available? In order to ensure the most competitive process, the Lottery will not release the names of agencies submitting a written intent to bid and/or participating in this RFP process until after an apparent successful agency has been announced. Question 9: Would it be possible to obtain the mailing list or invite list? Interested parties may obtain a copy of the RFP notification mailing list by contacting the issuing office identified in RFP #50077 section I.G. Question 10: I took a look through your RFP and noticed the section about Agency Minimum Requirements, and was wondering how strict you are about these items. For instance, if we met some, but not all -- would it still be worth us submitting a proposal? Submitting agencies must meet all of the Minimum Agency Qualifications. Meeting the Minimum Agency Qualifications specified in RFP #50077, section I.F. is mandatory. Participating agencies and joint ventures must complete Attachment 2, Certification, certifying that they meet all minimum qualifications. Question 11: It states in the RFP that this is statutory and the incumbent is David and Goliath. Are you able to advise if they will be re-pitching for this? In order to ensure the most competitive process, the Lottery will not release the names of agencies submitting a written intent to bid and/or participating in this RFP process until after an apparent successful agency has been announced. October 12, RFP #50077

4 Question 12: The RFP states that an agency (or one in the mix) needs to have a minimum of 50 employees and have had at least $20m in revenue for BBH Los Angeles doesn't match this criteria, but is part of a single North American entity (sister office in New York) which far exceeds this criteria. Please can you confirm whether or not this would deem us eligible for this process? No, if your agency does not meet all Minimum Agency Qualifications, then it is not eligible to participate in this RFP process. Question 13: I just want to confirm is Phase 1 and Phase 2 of the bidding process the same for all agencies including small and micro businesses. The bidding evaluation process is the same for all qualified agencies participating in Phase I and II regardless of the type of agency participating. Question 14: Will agencies be required to abide by finalized Exhibit B Contract Terms and Conditions by the Phase I submittal date of 9/21 or should it be assumed that there is an opportunity for agencies who make it to the finals to consider modifications to the Contract Terms and Conditions as a result of full legal review and vetting? Upon selection of the apparent successful Agency, the Lottery may, in its sole discretion, take into consideration any requests for revisions to the draft Contract Terms and Conditions. There is no guarantee, however, that the requested revisions will be made. Therefore, agencies should submit their proposals under the assumption that the Contract Terms and Conditions issued with the RFP will remain in place for the entirety of the contract. Question 15: Can you please confirm that the 2 Creative Case Histories will go on one DVD and the 2 Media Case Histories on a separate DVD? Agencies may submit the two creative and two media case histories on separate DVDs or may submit all four on one DVD. Question 16: Do the narrated Case History videos require subtitles? The Case History videos do not need subtitles, but the media case histories require subtitles. Question 17: Can you please clarify the specifics for the menu-formatted DVD requirement? The beginning of the DVD must include a menu, or table of contents, which clearly identifies the DVD content. Question 18: Can you please clarify any requirements for the written versions of the DVD content beyond the 2- page limit? October 12, RFP #50077

5 Per Section(s) II.A.3-5 on pages of the RFP, for the case histories, please include a succinct description or overview (for example, objectives, strategy, consumer/creative insight, and results) for each ad or campaign and a notation of the timeframe in which the work ran. For the media case histories, agencies must include a written summary of the media objective, target market, consumer insights, strategy, and results for each campaign. Question 19: On page 18, section A you note that Agencies must also include one CD or flash drive containing a copy of all written requested submittals listed above. Can you please confirm that the full submission requirement is as follows: 1 printed original, 4 printed copies, and one CD/flash drive with an electronic copy of the proposal? Yes. Question 20: Can you please confirm that the Agency Profile, Two Creative Case Histories, and Two Media Case Histories must each be delivered on separate DVDs (3 total DVDs), with accompanying CD/Flash Drive including an accompanying written case study (3 total CD/Flash Drives)? Agencies may submit DVD case history and CD/flash drive content on separate DVDs/CD/flash drives or all on one DVD/CD/flash drive. Question 21: For Package #2, would it be acceptable to provide all video content (agency profile, two case histories and two media case histories) on one menu-formatted DVD, while providing all written descriptions of video content on one CD/flash drive? We will provide five printed copies of each as requested. Yes. Question 22: Is the Lottery requesting the menu-formatted DVD be playable in a DVD player? If so, are you requesting that the written descriptions of video content also be included on the playable menuformatted DVD, as referenced on page 12? Yes. The written versions of the DVD content are required to be submitted on CD/flash drive. Question 23: For Attachment 1 Agency Fact sheet, is it permissible to deliver a designed/recreated PDF with all of the required information and in the order requested, or would you prefer we use the Attachment supplied? If so, will you supply an editable PDF? The Agency Fact Sheet may be submitted recreated and completed on a pdf as long as it is formatted as shown in the RFP. Question 24: Will there be an opportunity to discuss the contract terms & conditions with an opportunity to make adjustments where agreed? October 12, RFP #50077

6 Upon selection of the apparent successful Agency, the Lottery may, in its sole discretion, take into consideration any requests for revisions to the draft Contract Terms and Conditions. There is no guarantee however, that the requested revisions will be made. Therefore, agencies should submit their proposals under the assumption that the Contract Terms and Conditions issued with the RFP will remain in place for the entirety of the contract. Question 25: Are the terms in Exhibit B applicable only to the RFP, or would they apply as they are to the actual services rendered? The terms and conditions identified in Exhibit B, Draft Contract Terms and Conditions are applicable to the services identified in Exhibit A, Scope of Services, for Lead Agency Advertising Services. Thus, they are applicable to the actual services rendered. Question 26: Regarding Phase I Submittals Packaging and Delivery, could you clarify what is meant by within the sealed packages, agencies will include two separately sealed packages? Does this mean you d like us to combine Package 1 and Package 2, both of which are sealed separately, in one master package? Yes. Agencies submitting Phase I Submittals must include package 1 and package 2 in separate packages within one clearly identified package as outlined in RFP #50077, section IV. A. Question 27: If you d like us to combine Package 1 and Package 2 in one master package, would you like the one CD or flash drive containing a copy of all written request submittals within the master package? Yes. Question 28: Per the requirements for the Introduction Letter, will you provide list of agencies providing letter of intent so that we may answer question 1c, page11? To clarify question 1c on page 11 of the RFP, the Lottery is interested in how an agency differs from its competitors in the world of advertising, not how it differs from specific agencies that are participating in this RFP process. Question 29: What is the current DVBE participation level of incumbent? David & Goliath, the Lottery s current General Market advertising contractor, committed to 3% DVBE for non-media costs. Question 30: Who will be on the evaluation committee? Will each member have equal weight in the scoring? The Lottery s Evaluation Team includes executives and subject matter experts from across the Lottery. The names of the members of the Lottery s Evaluation Team are confidential until an October 12, RFP #50077

7 apparent successful agency is selected. Individual evaluation team members will contribute to an overall team rating for each evaluated agency. Question 31: Will there be a specific weight assigned to each of the evaluation criteria, beyond just the order of priority? No. Question 32: Is the CA Lottery working with any outside consultants to manage the RFP process? If so, who? The Lottery is not working with outside consultants to manage its solicitation process for this RFP. Question 33: Is there preference given to the incumbent agency? No. All participating agencies are evaluated in accordance with the RFP. Question 34: Who are the evaluators and primary decision makers throughout this RFP process? For example: Procurement, Marketing, etc. The Lottery s Evaluation Team includes executives and subject matter experts from across the Lottery. The names of the members of the Lottery s Evaluation Team are confidential until an apparent successful agency is selected. Individual evaluation team members will contribute to an overall team rating for each evaluated agency. Question 35: In a Joint Venture submission, do both participating agencies need to meet all the Minimum Agency Qualifications in Tab I, Section F, or does one agency who meets all the qualifications suffice? If a joint proposal is being submitted, at least one of the independent agencies must meet all of the Minimum Agency Qualifications listed in the RFP section I. F. Minimum Agency Qualifications. Question 36: Is the Small/Microbusiness Participation goal of 25% optional or required? The 25% Small and Microbusiness Participation goal is optional. Question 37: Can companies outside the USA apply for this (like from India or Canada)? Yes. The RFP is open to all agencies and joint ventures that, at the time Phase I Submittals are due, meet the Minimum Agency Qualifications described in RFP #50077, section I.F. Question 38: Do we need to come over there for meetings? October 12, RFP #50077

8 Yes. The evaluation process for this RFP requires semi-finalists to attend a Briefing Day which will be held at Lottery headquarters in Sacramento, California. In addition, services outlined in Exhibit A, Scope of Services require the agency partner to meet with Lottery Sales & Marketing staff at Lottery headquarters upon request. Question 39: Can we perform the tasks related to the RFP outside the USA (like from India or Canada)? The RFP identifies tasks that require participating agencies to attend meetings at the Lottery headquarters and meetings and competitive evaluations at the agency s California office. Having an existing office in California that is maintained for the duration of the contract will meet the Minimum Agency Qualifications for the RFP, but agencies must determine whether services and tasks can be successfully executed outside of the United States for the duration of the contract. Question 40: Could you confirm the projected media spend per annum for the contract? The Lottery s advertising budget for this segment has historically been in the range of $40-$50 million annually, inclusive of agency fee, production, and media. Question 41: Can you clarify whether the prime agency can be a joint venture and combined meet the minimum 6 requirements or must the prime agency meet all 6 to be qualified? At least one of the agencies must meet all Minimum Agency Qualifications. Question 42: Are you looking for a new lead agency only or are you also looking for an agency for the Hispanic market? If Hispanic is not part of your search at this time, when will that business come up for review? The Lottery is only seeking to award a contract for Lead Agency Advertising Services for the General Market consumer segment through this RFP. The Lottery anticipates releasing an RFP for Spanishlanguage advertising services within the next year. Question 43: I know that you have a current relationship with D&G, who then subcontracts Initiative in for media, but I was wondering if you would be open to a solo media agency participating in this RFP to give you a different perspective on how to approach your marketing efforts? The Lottery is looking for an agency partner to provide creative and media solutions. A joint venture is also acceptable. Question 44: Are you able to share the scale of your budget (ideally broken down by media, production and agency fee)? The Lottery s advertising budget for this segment has historically been in the range of $40-$50 million annually, inclusive of agency fee, production, and media. October 12, RFP #50077

9 Question 45: I don t see a contract value in the RFP; will that be provided in another document? The Lottery s advertising budget for this segment has historically been in the range of $40-$50 million annually, inclusive of agency fee, production, and media. Question 46: In reading through the minimum agency qualifications the only one I see that we do not meet is to have an office located in California. However, will placing a satellite office within California as part of our response suffice? Yes, but the California satellite office must exist at the time Phase I Submittals are due and be maintained for the duration of the contract. This is one of the Minimum Agency Qualifications. The RFP identifies tasks that require participating agencies to attend meetings at Lottery headquarters and meetings and competitive evaluations at the agency s California office. Agencies must determine whether they can successfully execute the required services and tasks for the duration of the contract from a satellite office. Question 47: Are you able to give any indication as to the agency revenue opportunity for this assignment, on an annual basis? The Lottery s advertising budget for this segment has historically been in the range of $40-$50 million annually, inclusive of agency fee, production, and media. Question 48: Is there an allocated media budget for the California Lottery? Would you be able to provide a rough number? The Lottery s advertising budget for this segment has historically been in the range of $40-$50 million annually, inclusive of agency fee, production, and media. Question 49: Is there a ballpark for production budget? The Lottery s advertising budget for this segment has historically been in the range of $40-$50 million annually, inclusive of agency fee, production, and media. Question 50: Is there any willingness or interest by the California State Lottery in potentially consolidating services with a single agency supplier if that agency can demonstrate acceptable capabilities across a portion of or the full scope-of-work? The Lottery is only seeking to award a contract for Lead Agency Advertising Services for the General Market consumer segment through this RFP. Question 51: Of the critical issues the California Lottery is facing as listed in The Opportunity section I-C on pages 1-2, might you be able to rank which of these challenges and opportunities are of the greatest strategic importance to the Lottery in the coming year? October 12, RFP #50077

10 They are all equally important. Question 52: Our agency holding company is quite restrictive on the sharing of specific financial information by client. Given this constraint, will an agency receive unfavorable ratings if they are prohibited by policy to share revenue and billing information? Yes. The Lottery needs this information to evaluate proposals. Also, California Government Code sections and describe certain procurement processes and required business disclosures. Question 53: For the Case History videos, is it acceptable that the case histories we share were worked on by multiple Grey offices, or do they need to be completed in their entirety by the submitting office? The case histories should reflect the work of the agency team that would be assigned to work on the Lottery account, even if the team is from multiple offices. Question 54: What is your general channel media mix? The Lottery currently uses television, radio, out-of-home, paid digital (including mobile), social, website, /direct communications, and events. Question 55: Can you provide a breakdown by media channel for 2017? If not exact amounts, then percentage breakdown. The Lottery is looking to its selected agency to provide the optimal media channel mix as a recommendation to enhance media performance in the future. Question 56: What digital channel are you most active on? The Lottery uses multiple digital channels, but which channel the Lottery utilizes or is most active on is variable based on campaign objectives. There is no one digital channel that the Lottery is most active on. Question 57: What percentage of your digital display media is video vs. standard display? The Lottery is looking to its selected agency to provide a recommendation for digital media to improve performance in the future. Question 58: Is search engine optimization (SEO) included in the scope of work in addition to paid search? Paid search is part of the scope of services for this RFP. SEO is a separate function managed internally. October 12, RFP #50077

11 Question 59: Which social channels do you use for organic and paid media? The Lottery currently uses Facebook, Instagram, Twitter, YouTube, and Snapchat. Question 60: What percentage of your media is activated programmatically? The percentage is variable depending on campaign objectives. The Lottery is looking to its selected agency to provide a recommendation for digital media to improve performance in the future. Question 61: Do you have a consumer segmentation or any audience targeting work that you can share? Question 62: How do you currently measure integrated media campaign performance and business success, and what do you measure? Depending on campaign objectives, the Lottery uses things like tracking study data, sales revenue, and ROI, among others, to measure success. Question 63: What are the primary media KPIs? Are there secondary KPIs? Depending on campaign objectives and tactics, the Lottery uses things like tracking study data, sales revenue, and ROI to measure success. Question 64: How do you differentiate KPIs based on media type, objective, and device? The Lottery identifies goals and objectives for each media type. Question 65: What is your approach and frequency for reporting across media channels? The Lottery recaps every advertising campaign across all media channels. These recaps include ROI compared to the campaign goals. Question 66: Do you have an attribution model with all media channels? What are the parameters? The Lottery does not currently have an attribution model. October 12, RFP #50077

12 Question 67: What is your test and learn approach/cadence? Are there any key learnings you can share? The Lottery activates industry best practices to build its Marketing plan. The current budget parameters have limited funds for a test and learn approach. Key learnings will be provided to the finalists. Question 68: What is the current approach and tools you use to research audiences, develop creative, manage bids, targets users? The Lottery s current approach to test products and creative is consumer focus groups and quantitative surveys via the internet. The Lottery manages the project bidding process by reviewing 3 or more bids and determines the best value. The Lottery leverages the consumer segment data to target Lottery players. Question 69: Do you use a Data Management Platform? If so, which DMP do you currently use? The Lottery uses an Excel-based Business Intelligence/Business Analytics (BIBA) data repository for sales data but does not currently have a true DMP for marketing. Question 70: Do you have a current CRM platform? If so, is CRM data integrated into media and targeting? Yes, but CRM data is not currently integrated into media and targeting. Question 71: What ad server(s) do you use? The Lottery s media buying company determines the ad server. Question 72: Are there any media, data or preferred technology partnerships currently in place, and will the agency will be responsible for managing? The Lottery s current General Marketing Agency provides an econometrics media mix model. The Lottery is expecting the selected Lead Agency to provide an econometrics media mix model. Question 73: What is your current display tech stack? Is this managed in-house or by an agency? The Lottery s current display tech stack is managed by its media agency. Question 74: What activity has been done from a Display & Remarketing standpoint to date? The Lottery is looking to its selected agency to provide a recommendation for digital media to improve performance in the future. October 12, RFP #50077

13 Question 75: Are you using any verification partners for brand safety, fraud and viewability measurement? If so, which ones? Yes. The Lottery s current media agency manages the verification partner for brand safety, fraud, and viewability measurement. Thus, the Lottery is looking to its selected agency to provide similar service. Question 76: Which DMP do you currently use? The Lottery is not currently using a DMP for marketing. Question 77: What is your segmentation strategy for first party data? The Lottery is not currently using first party data in paid advertising. Question 78: What is your current digital media tag strategy? How granularly are placements broken out (i.e. supply, creative, device, tactic, audience, etc)? The Lottery does not currently have a digital media tag strategy, but the Lottery is looking to its selected agency to provide a recommendation to improve performance in the future. Question 79: How do you measure and/or account for offline traffic and/or conversion? The Lottery measures sales for each retail location. Question 80: Are there any plans to migrate to a new analytics platform within the next year? The Lottery s current General Marketing Agency provides an econometrics media mix model. The Lottery is expecting the selected Lead Agency to provide an econometrics media mix model. The Lottery is looking to its selected agency to provide a recommendation to improve performance in the future. Question 81: If you have a DMP, what first party data do you currently utilize in media? The Lottery is not currently using first party data in paid advertising. Question 82: What tools and technology are employed for the following channels and will the selected agency have the autonomy to make recommendations on any of the currently employed technology tool kit(s)? Ad-serving/campaign management tools (search, social, programmatic) Cross-channel attribution Site Analytics In-store tracking / beacon technologies October 12, RFP #50077

14 Call tracking SEO reporting Data Management Platform DSPs Ad verification/fraud monitoring CRM The Lottery uses a variety of these tools either internally or through its agency. The Lottery is looking to its selected agency to provide a recommendation for media efficiencies and to improve performance in the future. Question 83: Can you share the yearly marketing budget? Could you separate out between media spend, production and fees? The Lottery s advertising budget for this segment has historically been in the range of $40-$50 million annually, inclusive of agency fee, production, and media. Question 84: Do you have the existing strategic positioning you can share? The Lottery s Three-Year Strategic Plan was presented to the Lottery Commission on March 24, 2016 and is located on its public website at Question 85: Are there any details on the core target audience? Age demographics? Question 86: Are retail activations a part of the efforts? The agency selected under this RFP may have input and involvement in some retail activation projects. Question 87: Is there a prioritization of specific product offerings? The Lottery will potentially share this type of information with the finalists of this RFP. Question 88: What marketing activity has currently been working well? October 12, RFP #50077

15 Question 89: What has been your most successful campaign/activation? Question 90: Do you have any other brands that Lottery look to as benchmarks for executing innovative and creative marketing efforts? The Lottery uses industry best practices gleaned from other U.S. Lotteries as benchmarks and also analyzes how other leading brands in the entertainment, retail, and fast-moving consumer goods (FMCG) space are bringing innovation and creativity to their marketing efforts. Question 91: What is the overall Budget for the duration of the contract? The annual budgeted amount for the Lead Agency Advertising contract is approximately $40 - $50 million. The duration of the contract is expected to be 5 years. Question 92: What is the annual budget? Could you provide the breakdown by media and production? The Lottery s advertising budget for this segment has historically been in the range of $40-$50 million annually, inclusive of agency fee, production, and media. Question 93: Could you provide product Information or catalogue for all California Lottery product lines? The Lottery s website, has information about all of its product offerings. Question 94: Can we get current product sale segmentation? The Lottery will share product sales performance with RFP finalists. Question 95: How does current consumer segmentation look like? The Lottery has consumer segmentation data that will be shared with RFP finalists. Question 96: Is becoming the largest lottery in the U.S. the ultimate objective of this RFP? October 12, RFP #50077

16 The ultimate objective of this RFP is to assist the California Lottery in maximizing supplemental funding for public education. The new Lead Agency will assist in accomplishing this goal. Question 97: What is the gap between California Lottery versus the largest lottery? Based on CY 2016 sales data, the New York Lottery s total sales were $7.83 billion compared to the California Lottery s total sales of $6.39 billion. Question 98: Will lead agency be leading the branding message for multicultural, promotional and digital services? Yes. Question 99: Is Olson + Co providing overarching digital strategy, digital media strategy, or just digital creative? Olson performs various services in support of the Lottery's owned digital assets. This includes project-based activities to enhance the Lottery s website and supporting components, digital content development for select efforts, managed services to maintain and monitor the Lottery s websites and input into the Lottery s digital strategic direction. Question 100: Page 3 of the RFP stating that the Lottery seeks an agency that can demonstrate econometric modeling. Is there an existing modeling tools that are in use? Yes, the Lottery utilizes an econometrics media mix modeling tool that is part of the services provided by the current Lead Agency. Question 101: Will the new strategic agency partner be using existing econometric modeling? The Lottery has an existing econometrics modeling tool that can be used in the future. If the new agency proposes an evolution of the econometrics media mix model, the Lottery will be open to evolve this model. Question 102: Are there any current researches that can be shared in different phases of the RFP process? Question 103: In the RFP, CA Lottery references getting lapsed players back into play. Can we get a segmentation of breakout of lapsed players? October 12, RFP #50077

17 Question 104: How many lapsed users are there? By Game? Do we know how long they ve lapsed? Question 105: Is consumer segmented by playing frequency or do they also segment by playing value? Question 106: What is your equation for success? e.g. we need V number of W type of people to spend $X with Y frequency in order to increase our business by Z% The Lottery utilizes various methods to measure success, such as tracking study data, sales revenue, and ROI, depending on campaign tactics and objectives. Ultimately, the Lottery s primary objective is to drive contributions to public education via increased sales. Question 107: How do you currently measure your ROI? The Lottery uses a combination of econometrics modeling, sales data, and other data metrics to obtain ROI. Question 108: What do you consider your largest barriers to purchase? Question 109: Who do you consider your primary target as there are multiple targets/segments? October 12, RFP #50077

18 Question 110: How would you prioritize targets? Question 111: Based on Brand Tracking research, what are the top positive perceptions of the CA Lottery? Question 112: Adversely, what are the top negative perceptions of the CA Lottery? Question 113: What has been the most successful CA Lottery Campaign to date and why? Question 114: Has there been any messaging around public education in previous campaigns and was it successful? Over the years, the Lottery has done several campaigns around public education with varying levels of success. October 12, RFP #50077

19 Question 115: How does the CA Lottery plan to increase relevance from a product innovation standpoint in order to resonate with Millennials? The Lottery is continually developing new ideas for products to appeal to consumers including millennials. Question 116: What are CA Lottery s plans to increase loyalty/building a database for CRM? The Lottery s current loyalty program, which is managed in-house, is the 2 nd Chance program. The Lottery continually looks at ways to leverage this program in its marketing efforts. Question 117: Are there any other State Lottery entities that you think are doing a good job in this space? If so, who are they and why? An overall comparison of lotteries is not useful, as each lottery has a unique perspective and focus based on its population s preferences. Question 118: What type of restrictions do you have with regard to targeting in the digital space? The Lottery s strategy to grow sales in a responsible manner and California law and Lottery regulations inform how the Lottery approaches targeting in the digital space. Question 119: Are you able to share % of sales by gain? Question 120: What does success look like should you choose the right Agency partner? The Lottery wants to grow sales in a responsible manner, improve brand perceptions, position the brand as fun and entertaining, and expand playership. Question 121: Will the agency be given the opportunity to ask questions (should they arise) based on the Semi- Finalist brief? Yes, the semi-finalists will be able to ask questions regarding the brief. October 12, RFP #50077

20 Question 122: Will the California State Lottery please share current segmentation work and sales data by game and county? Question 123: How would you prioritize the following business objectives? Increase sales / contributions to public education Frequency of play Re-engage lapsed players Improve brand perception Positioning as fun and entertaining Diverse community outreach Brand and messaging refresh The Lottery s primary objective is to drive contributions to public education via increased sales. The Lottery would equally prioritize the items listed in this question in order to meet the ultimate objective and mission to increase contributions to public education. Question 124: Assuming the above are immediate (1-2 year) objectives, what do you anticipate being your biggest challenge over the next 5 years? In the long term, the Lottery needs to continually grow its playership and remain relevant in order to fulfill its mission. Question 125: Can you share your current, customer segmentation with us? The Lottery will share consumer segmentation data with RFP finalists. Question 126: How would you prioritize your audience segmentation? And does that prioritization align with your business objectives, or is it driven by other considerations? Question 127: What has been your most successful campaign and why? October 12, RFP #50077

21 Question 128: What are your current production, and media budgets for 2017? Will the budget remain flat, or change in 2018, and if so, how? The Lottery s advertising budget for this segment has historically been in the range of $40-$50 million annually, inclusive of agency fee, production, and media. Question 129: How would you prioritize the lottery games? Question 130: Over the next 4 years are you anticipating any new game releases? The Lottery launches approximately 48 new Scratchers games every year. The Lottery does not anticipate launching new draw games over the next four years. Question 131: How far behind is CA Lottery in largest lottery in sales? What percentage difference are you looking to make up in becoming THE largest? Based on CY 2016 sales data, the New York Lottery s total sales were $7.83 billion compared to California Lottery s total sales of $6.39 billion. Question 132: Have previous marketing objectives included a portfolio approach (inclusive of scratchers, etc.) or have they been primarily focused on jackpot? The Lottery s marketing objectives include a portfolio approach inclusive of Scratchers. Question 133: What technology, if any, have you invested in thus far in your marketing efforts (ex. VR, AR, mobile, etc.)? The Lottery has a mobile application. October 12, RFP #50077

22 Question 134: Are there existing brand attributes/audiences that demonstrate highest/lowest propensity to convert that we should be aware of? Question 135: Of existing game opportunities, how much of the existing base only play 1 game vs.2 or more? What has driven this historically? Question 136: What value has been placed on conversion vs. storytelling? What role does each play in your approach? The Lottery is looking to its selected agency to provide a recommendation for new ideas to become more successful in building playership. Question 137: Is there a campaign that you are most proud of from an innovation and/or territory breakthrough perspective? Can you share insights and KPIs associated with this campaign? Question 138: How are marketing budgets historically set? Do we anticipate them to change year over year? And if so, what will the change be based on? The Lottery s advertising budget for this segment has historically been in the range of $40-$50 million annually, inclusive of agency fee, production, and media. The annual budget is set each year based on business needs, and can vary year to year. Question 139: Do you have any historical CRM data that you have captured? If so, have you been able to leverage it in your marketing efforts? The Lottery has a customer database that is not currently being leveraged in paid media efforts. October 12, RFP #50077

23 Question 140: How do you currently segment audiences? Location, occasion, etc.? Question 141: What is the current consumer perception and do you have existing/historic brand studies or consumer insight studies available to share? Question 142: Where do you see the best opportunity for consumer growth? And why? The Lottery is looking to its selected agency to provide a recommendation for new ideas to become more successful in building playership. Question 143: Do you have specific goals for increasing unaided brand awareness, key brand equity measures and health metrics? The Lottery will share detailed goals to build the brand with RFP finalists. Question 144: Do agencies work together from a connective marketing brief or are projects silo d based on need? Based on direction from the Lottery, the agencies work together to build a combined and cohesive marketing brief. Question 145: What are your best practices in working with cross-cultural agencies? Question 146: What is the cadence/protocol for sharing best practices, learnings, strategy across all partners? Working with the Lottery, it is the Lead Agency s role to help lead the development and execution of a cohesive marketing program across all partners. October 12, RFP #50077

24 Question 147: What measurement tools and services are you currently using in-house? Are there any specific historical KPIs that the organization currently uses to measure success? The Lottery has a variety of tools in-house, including an econometrics model, social listening, and sales data (BIBA). Depending on campaign objectives and tactics, the Lottery uses things like tracking study data, sales revenue, and ROI to measure success. Question 148: What first party data is the brand able to share/provide for programmatic/re-targeting purposes? None at this time. Question 149: What is the preferred destination for messaging? The Lottery currently uses television, radio, out-of-home, paid digital (including mobile), social, website, /direct communications, and events as its media mix. Question 150: How are you dividing your media mix by upper and lower funnel? The Lottery is looking to its selected agency to provide a recommendation for the optimal media mix. Question 151: Beyond an evergreen approach, are there any key seasonality/priority flighting periods in the year? Question 152: Do you have any direct media partnerships or annual commitments in place (retail, ooh ) that we should consider in the planning process? The Lottery has eight permanent OOH billboards that feature the Mega Millions and Powerball jackpot amounts. Question 153: Do you currently have any co-op partnerships that we should consider? The Lottery does not currently have any co-op partnerships. Question 154: Are you open to working with media partners to create content on your behalf? The Lottery currently works with its media partner to create content. The Lottery is open to new ideas. October 12, RFP #50077

25 Question 155: What is your approach to paid, owned and earned media? Each plays an important role in the Lottery s overall marketing mix. The Lottery is looking for its selected agency to work in conjunction with the Lottery s internal Corporate Communications/PR and Marketing teams to develop a holistic strategy and approach that utilizes a blend of paid, owned, and earned media. Question 156: Is it possible to understand the make-up of the evaluation panel (marketing, digital, media, social, pr, etc.)? The Lottery s Evaluation Team includes executives and subject matter experts from across the Lottery. The subject matter experts encompass expertise from all areas of marketing. The names of the members of the Lottery s Evaluation Team are confidential until an apparent successful agency is selected. Question 157: How had the marketing spend been allocated by channel in recent years? Question 158: Do you know where / who / what you are losing dollars to? Are there some channels performing better than others? Question 159: What promotional or experiential events have you seen real success with recently? Question 160: What kind of research do you wish you had? What do you wish you knew more about? The Lottery is always seeking to learn more about all target consumers and is open to additional consumer research regarding Lottery players vs. non-players. However, detailed research needs will be discussed after an apparent successful agency is selected. October 12, RFP #50077

26 Question 161: Do you want to better know a certain target? Do you need to better understand why people aren t playing more? The Lottery is always seeking to learn more about all target consumers and is open to additional consumer research regarding Lottery players vs. non-players. However, detailed research needs will be discussed after an apparent successful agency is selected. Question 162: Have you done any research on the California Lottery brand s purpose and how much understanding there is amongst players? Yes. Question 163: What ROI measurement do you have in place currently to establish effectiveness? The Lottery utilizes an econometrics model to determine media effectiveness. Question 164: Do you have any form of segmentation that you use, that you could share with us? Either on audience or moments and occasions and when people typically interact with the brand? Question 165: What other lottery campaigns/strategies have you seen work well or do you admire? The Lottery analyzes how other leading brands in the entertainment, retail, and FMCG space bring innovation and creativity to their marketing efforts. Question 166: What is the seasonality or rhythm of your year? Is there a cultural events calendar you follow? Question 167: Regarding buying guidelines, do you have any strict programming guidelines? Yes. In Phase I and II of the RFP the Lottery will evaluate bidding agencies credentials and past work and the Lottery Evaluation Team will gain a sense of each agency as a whole. If an agency advances to October 12, RFP #50077

27 Question 168: Are there any partnerships we need to be cognizant of across any mediums? No. Question 169: What consumer trends have the marketing team seen in different lottery game formats in recent years? Question 170: What success have you had in mobile and more innovative digital platforms to date? The Lottery s mobile app has been a great success and there are plans to improve its functionality. Question 171: How big a barrier is the need for cash when making a purchase? Question 172: Do gaming formats align to certain target segments? Yes. Question 173: What games are the biggest revenue drivers? Which games are the triggers to play VS which games are more spontaneous purchases? Question 174: What customer research have you done with audience targets? October 12, RFP #50077

28 Question 175: What are the motivational drivers behind playing? Question 176: What are the popular use cases? Gifts? Pooled tickets? Morning pick me up? Evening treat? Question 177: Do you have California Lottery data that you could share on usage habits (time of day/days of week / seasonality)? Question 178: How do you typically target players given the data you have seen psychographic profiles, demographic segments etc? How successful do you feel this has been? The Lottery s general buying demographic is ages 18-49, however, it can fluctuate depending on communication goals and media platforms. In Phase I and II of the RFP the Lottery will evaluate bidding agencies credentials and past work and the Lottery Evaluation Team will gain a sense of each agency as a whole. If an agency advances to the Finalist phase, the Lottery will provide it with all data and information necessary to allow it to submit a complete Finalist Work Assignment. Finalist agencies will have an opportunity to present Question 179: How responsive is the sales model currently? How quickly do you see market response to promotional changes or triggers? October 12, RFP #50077

29 Question 180: Do we know what core reasons currently lead to players lapsing from play? Question 181: Do people know that the California Lottery supports public education in California? The Lottery regularly monitors awareness of the Lottery s mission to support public education through a tracking study. In Phase I and II of the RFP the Lottery will evaluate bidding agencies credentials and past work and the Lottery Evaluation Team will gain a sense of each agency as a whole. If an agency advances to the Finalist phase, the Lottery will provide it with all data and information necessary to allow it to submit a complete Finalist Work Assignment. Finalist agencies will have an opportunity to present Question 182: From a media POV, what is your buying demographic? The Lottery s general buying demographic is ages 18-49, however, it can fluctuate depending on communication goals and media platforms. Question 183: If two or more agencies are partnering on the RFP, is each agency required to submit case studies and an agency profile with video not to exceed 10 minutes or just the advertising agency? No, the agency profile and case studies videos should represent the work of the partnership of the agencies. Question 184: Is it a requirement or just ideal for the lead agency of advertising services to provide media services? It is a requirement. The Lottery is seeking media planning and buying services as part of the scope of the RFP. Question 185: TMA entity is registered in Delaware but can render services in California. Does this meet the requirement for agency entities? October 12, RFP #50077

30 Agencies and joint ventures that are registered/incorporated outside of California and meet the minimum agency qualification listed in section I.F, may participate in the Lottery s competitive RFP process for lead agency advertising services. Question 186: What has CA Lottery seen that they believe are examples of innovative marketing? The Lottery may share recent examples of innovative marketing with the finalists of this RFP, but wants agencies to show their own innovative marketing strategies that the Lottery could utilize. The Lottery also analyzes how other leading brands in the entertainment, retail and FMCG space bring innovation and creativity to their marketing efforts. Question 187: Where has CA Lottery seen the greatest ROI? Tactics/Programs/Media/Products? Question 188: What programs and/or products have generated the greatest traction among casual versus dedicated players? Question 189: Are new distributions/sales routes open as an option? (e.g., vending/online) The Lottery is always evaluating whether new distribution methods meet the Lottery s needs and adhere to Lottery regulations, state, and federal law. This task, however, is not part of the scope of this RFP. Question 190: What competes with CA Lottery for dollars spent on playing? (e.g., fantasy football) While there is no direct competition in terms of product, the Lottery is competing with other point of purchase goods, as well as other gaming and entertainment choices in California. Question 191: What is the biggest barrier for casual players? October 12, RFP #50077