STRATEGIC MARKETING AND SALES COMMUNICATIONS PLAN
Fiscal Year 2012
November 2011
TABLE OF CONTENTS
Overview and Summary
EXECUTIVE SUMMARY........................................................................................................................... 3
COLORADO LOTTERY MISSION AND FY12 GOALS .................................................................................. 5
SITUATION ANALYSIS ............................................................................................................................ 6
COLORADO LOTTERY SWOT ................................................................................................................ 9
KEY MESSAGES.................................................................................................................................. 11
Research – Executive Summary, Goals, Objectives, Strategies and Tactics ………………………….14
Product Marketing – Executive Summary, Goals, Objectives, Strategies and Tactics…………..…….17
PRODUCTS ......................................................................................................................................... 17
SCRATCH ........................................................................................................................................... 20
JACKPOT GAMES ................................................................................................................................ 26
Mega Jackpot Games: Powerball and Mega Millions .................................................................. 27
Lotto ............................................................................................................................................. 31
MatchPlay .................................................................................................................................. 33
Cash 5 .......................................................................................................................................... 34
Corporate Marketing – Executive Summary, Goals, Objectives, Strategies and Tactics…………….. 35
Retailer Relations – Executive Summary, Goals, Objectives, Strategies and Tactics…………...…... 46
Reference
SWOTS ............................................................................................................................................. 52
CORPORATE IDENTITY ........................................................................................................................ 68
PRODUCT REVENUE AND CONTRIBUTIONS ........................................................................................... 70
LOTTERY GAME PLAYERSHIPS, DEMOGRAPHICS AND AUDIENCES ......................................................... 72
RESEARCH ......................................................................................................................................... 78
POINT-OF-SALE .................................................................................................................................. 84
2
EXECUTIVE SUMMARY
Fiscal year 2011 saw many accomplishments by the Colorado Lottery, allowed the staff to make
progress on important initiatives, and positioned the organization to be even more effective in FY
2012. Achieving a new sales record of over $518.9 million is perhaps the most notable of a long list
of accomplishments. Among many other achievements include launching a new website which has
over 1.1 million visitors a month and executing one of the largest second-chance drawings in
Colorado Lottery history, perhaps only rivaled by the State Fair ticket entry promotion. Lottery staff
worked with Cactus Marketing to create 14 marketing initiatives in support of the launch of Scratch
and Jackpot games. The retooled emphasis on social media has begun to show signs of success with
more than 9,300 fans and followers on Facebook and Twitter. As part of a very active outreach
program, the Lottery executed a Protect Your Prize education and awareness campaign and
remained very active in Problem Gambling Coalition of Colorado.
The improvements, enhancements and new communication tools will all combine to make FY 2012
an exciting and successful year for the Lottery. However, the year promises to have many significant
issues the marketing and sales groups will have to manage, and manage well, for the organization to
achieve strong proceeds to support the various causes around the state: the basic mission of the
Lottery.
Economy. The economic conditions for the state continue to be hard on most residents and these
residents make up the Lottery playership base. The recession-like times have forced many people to
limit their normal Lottery spending. The near-term outlook for the economy is cautiously optimistic, but
the recovery rate is forecasted to be slow.
$2 Powerball. On January 15, 2012, the price of a Powerball single-board play will go from $1 to $2.
While all of the research conducted indicates there will be some decline in spending by players, it
also indicates the game will have faster growing and higher jackpots. If these are accomplished, the
game will produce increased proceeds for Colorado. Managing the rollout of the $2 price point is
critical to consumer acceptance of the price change and improved features of the game.
Mega Millions. Colorado has the perfect option for players who do not want to spend the $2 for
Powerball but still like the excitement of playing the large, multi-state jackpot games. Mega Millions
has been in the marketplace for over a year, but consumer acceptance of this game has fallen far
short of original expectations. Mega Millions will remain at $1, has large jackpots, and basically plays
just like Powerball.
3
Raffle. During FY 2011, the Lottery offered two versions of a raffle game. The first one, which was
sold over the holiday period of calendar year 2010, was a success. It sold completely out. However,
the second game, which was sold during the following early summer timeframe was not a success.
When the drawing was held on July 1, there were a significant number of unsold tickets which hurt
the profitability of the game. The Lottery will not be offering a raffle in FY 2012 and will need to make
up the income.
Research. The marketing group of the Lottery has had a fixed budget for research to learn about
consumers and how to make lottery products more appealing to them. Beginning in FY 2012,
Scientific Games has made additional research available to the Colorado Lottery. This additional
resource will help the Lottery with its product development and marketing efforts, but managing these
additional projects will also be a challenge for the existing staff of the Lottery and Cactus.
Profitability. The amount of funds the Lottery has returned to the state has become a very important
measurement about how well the Lottery is serving the citizens of Colorado. When FY 2011 ended,
the Lottery returned $113.6 million to the state on $518.9 million in sales for a percentage return of
21.85%. This compared to FY 2007 when sales totaled $455.9 million but proceeds were $119
million for a return rate of $26.10%.
The staff of the Lottery has challenged itself to improve all of these numbers. However, there is not
one single cause nor is there a single solution. There are several things that will have to be closely
analyzed and addressed, and none of these seemingly disparate items exists in a vacuum. They are
all closely related and the synergies between them must be closely examined as a group and not
individually. Some of the factors are game payout percentages. The Lottery has worked to bring the
Scratch games into a balance of optimum payout that would best stimulate sales. In doing this,
Colorado is 12th from the lowest in overall payout percentage. Popularity and sales of higher priced
Scratch tickets have led the way to the sales increases the Lottery has achieved but it has also been
one of the contributors of the growth in percentage payout. The lack of significant jackpots for
Powerball and Mega Millions, combined with the lack of awareness of Mega Millions, has also been a
critical factor. The Lottery needs to maintain a split of Jackpot to Scratch of a minimum of 35%
Jackpot sales to 65% for Scratch. Operational expenses have increased with the increase in sales
and marketing expenses that happened in FY 2009 and FY 2010. Back office expenditures and the
cost of courier distribution have also been factors along with maximizing the payouts to retailers in
commissions for selling games.
The Lottery’s greatest challenge for FY2012: examining, changing, improving, maximizing and
creating a synergy among these different factors to the maximum benefit of the Lottery and proceeds
partners while at the same time profitably growing sales and proceeds as much as possible.
4
COLORADO LOTTERY MISSION AND FY12 GOALS
ORGANIZATION MISSION:
The Colorado Lottery creates and sells games of chance that are held to the highest standards of
integrity, entertainment and efficiency, in order to maximize proceeds for the people of Colorado.
FY12 GOALS:
1. Achieve total sales of $527.4 Million in FY12.
Scratch sales: $350 Million = Net profit $57,750,000 at 16.5%
Powerball sales: $77 Million = Net $28,875,000 at 37.5%
Mega Millions sales: $32.4 Million = Net $11,016,000,000 at 34%
Lotto sales: $38 Million = Net $12,920,000 at 34%
MatchPlay sales: $10 Million = Net $2,600,000 at 26%
Cash 5 sales: $20 Million = Net $5,600,000 at 28%
2. Increase 70 percent favorability by changing 24 neutral; 5% from neutral to somewhat favorable
as documented in September/October FY12 Tracking Study, with long-term goal (three years) of
increasing favorability to 10 and decreasing neutral to 14% percent.
3. Identify efficiencies within technology, operations and production.
4. Increase retail network by 2-3% (approximately 60-90 retailers) including grocery, convenience,
liquor, restaurant/bar and other trade styles, and optimize retail location sales.
5
SITUATION ANALYSIS
In FY 2011 the Colorado Lottery reached nearly $519 million in sales, an all time record high with an
increase of 3.5% over the prior year. This achievement was largely driven by a significant increase in
Scratch sales, which grew 5% over FY10 and comprised 66.5% of total sales. Jackpot game sales,
which accounted for 33.5% of total sales in FY11, came to $174 million.
While the total dollar amount of proceeds returned to the state in FY11 exceeded the prior year, the
percent of sales returned to proceeds was not as high as it has been historically. This is primarily due
to the balance of sales coming from Scratch games vs. Jackpot games. With higher payout
percentages and other factors, Scratch games are less profitable overall than Jackpot games. In
addition, FY11 Jackpot game sales remained flat vs. the prior year, despite the presence of three new
Jackpot offerings – Mega Millions and Matchplay, in their second year in FY11, and Raffle, which was
new in FY11.
Given the organization’s mission to maximize proceeds for the State of Colorado, profitability -- the
Lottery’s ability to return a strong percentage of sales to proceeds – will be a key focus of FY12.
FY11 Achievements:
• The new courier system is fully up and running, providing a more efficient method for stocking and
restocking games which results in better inventory management and in turn, increased sales.
• Two Raffle games were launched, generating nearly $9 million in sales.
• A fully revamped Colorado Lottery website was launched, providing a more effective and engaging
hub of communication between the Lottery and its players.
• $113 million was returned to the State in proceeds, taking the total contribution to Colorado from
inception over $2.3 Billion in proceeds.
• Fifty-three Scratch games were launched, generating $344.9 million in sales.
Sales and proceeds contribution by product for FY11 were as follows:
Sales
Proceeds
% of Sales
% of Proceeds
% of Ad Budget
Scratch
$345.0 million
$54.9
66.5%
48.45%
49.9%
Powerball
$70 million
$27.4
13.5%
24.2%
19.9%
Mega Millions
$25.1 million
$8.2
4.8%
7.2%
9.5%
Lotto
$39.3 million
$13.4
7.6%
11.8%
3.2%
MatchPlay
$11.4million
$2.1
2.2%
2.0%
10.3%
Cash 5
$19.1 million
$6.1
3.7%
5.4%
0%
Raffle*
$9.0 million
$.5
1.7%
.5%
7.1%
6
Total
$518.9 million
$113.4*
FY12 Initiatives:
As noted above, profitability is a key focus in FY12. Several initiatives will address this charge,
including:
• More of the budget will be allocated to Jackpot games than has been historically,
underscoring the importance of driving the Lottery’s most profitable games.
• The launch of $2 Powerball in January will be supported with over $1 million in advertising,
and will include both launch and sustaining campaigns. Media will include TV, Radio, OOH,
Online, Social, POS and Events.
• Mega Millions will be repositioned, and to some degree, relaunched, as the $1 megajackpot game in Colorado after the Powerball change. In February, approximately $600k will
be spent on a month long multi-media campaign including TV, Radio, Online and Social.
• For both Powerball and Mega Millions, we will explore new ways to tout specific jackpot
amounts when the jackpot grows over the key trigger points of $100 million and $200 million.
Live read radio, banner ads, digital OOH boards, full page newspaper ads and TV are being
evaluated.
• Lotto will also receive advertising support in 2012, for the first time in three years. Currently
the second most popular game in Colorado with a loyal fan base, we expect Lotto sales to
see a lift once reminder advertising is in market.
• Scratch game support will be re-evaluated to make sure we’re driving sales of the most
profitable Scratch games in the portfolio, while not losing sales behind any category. Specific
Scratch games to be supported include Wheel of Fortune, Immortal Cash, Holiday family of
games, Bingo, and a 2nd Chance Drawing campaign.
• More emphasis will be placed on optimizing the retail environment. A retail audit was
conducted early in 2011, and the opportunities identified will be implemented in priority order
as budget allows. In addition, the Lottery in Motion displays, promotions module, updated
automated jackpot signs, and a test sales vehicle will all enhance our retail efforts.
• Building on FY10’s relaunch of ColoradoLottery.com, we will continue to make important
enhancements to the site including a Spanish language version, retailer extranet, more
robust MyLottery program, and a new Winner’s Awareness section.
• An increased budget for Event Marketing from $500,000 in FY 2011 to $950,000 for both
events and sponsorships in FY 2012 allows for a larger presence in Colorado beyond the
small events and 1-2 sponsorships that the Lottery has typically been a part of in the past.
This fiscal year the Lottery will be participating in more events, such as the Olathe Corn
Festival, The Taste of Colorado and the National Western Stock Show, as well as
sponsorships such as the Budweiser Event Center year-long sponsorship. Traditional sports
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sponsorships such as Kroenke and Rockies that were in place FY 2011 will also be in
secured in FY 2012.
• As noted in the Executive Summary, Scientific Games is funding some new research tools
which will help the Lottery and Cactus team make informed, effective marketing decisions.
Along with the retail audit, a new Segmentation Study will be employed to identify untapped
opportunities within the Colorado marketplace and ways in which the Lottery can better meet
player’s needs, both now and in the future.
• Hispanic market efforts will also be explored more extensively in FY11. While we have
already been translating some portion of our advertising to Spanish and running it on
Spanish-language networks, the opportunity to better reach the Hispanic audience has
clearly been identified via our ongoing tracking study. Cactus and the Lottery will work
together to identify, prioritize, and roll out key Hispanic initiatives as a test in FY12.
Each product and initiative will receive a predefined portion of the budget as follows:
Scratch
Powerball
Mega Millions
Lotto
Cash 5
Raffle
MatchPlay
Point of Sale
Research
Website
Proceeds/Corporate
Community Relations
Event Marketing
Sponsorships
News Media Relations
Consumer Promotions
Photography Expenses
Other
$4,512,000
$2,766,000
$1,773,000
$259,000
$0
$0
$0
$850,000
$250,000
$320,000
$51,000
$140,000
$500,000
$450,000
$120,000
$300,000
$7,500
$1,884,000
31.8%
19.5%
12.5%
1.8%
0%
0%
0%
6%
2%
2.3%
0.4%
1%
3.5%
3.2%
0.8%
2.1%
0.1%
13.3%
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THE COLORADO LOTTERY – SWOT
STRENGTHS
WEAKNESSES

Strong and loyal playership base


Established products with equity
Junction and Ft Collins - some disconnect

Colorado economy is better than previous
present
year

Industry and professional Lottery staff
experience


Dependency of overall Jackpot game revenue
on size of Powerball and Mega Millions jackpots

Vision and mission clearly communicated to
all staff
Distance between Pueblo, Denver, Grand
Economy still lagging and discretionary
spending squeezed

Back office system not providing reporting

Updated brand emphasis

Proceeds go to a great cause that is

Lacking a strong social media presence
supported by residents

Mega Millions low awareness and weak

Good relationship with proceeds recipients

On-going consumer research tracking and
capabilities as expected
playership

Matchplay discontinuation
reporting

Full implementation of new courier/ inventory
management system to create efficiency and
timely re-stocking of retailer inventory

New website

Mobile promotions
9
THE COLORADO LOTTERY – SWOT CONTINUED
OPPORTUNITIES
THREATS

Specific proceeds distribution (compared to

Jackpot fatigue
general fund for other states)

National and Colorado economy still lagging
Introduction of promotions module during the

Mergers and acquisition of lottery vendors
second half of FY12 (estimated)

Anti-gambling activists

Enhancements to new website

Payout pressure on Scratch products limits

New plan for MyLottery membership

Potential to promote entertainment value of

Funding process
Lottery games

Vendor/Supplier power

Streamline business processes

IT consolidation/centralization

Positive relationships with retailers

Powerball and Mega Millions impact on other

Retailer expansion

Enhanced POS system through Lottery In-

profitability
Lottery games

motion

Uncertainty of game balance due to introduction
of new games
Research program to identify areas of

Aging demographic of lottery players
concentration

No online subscriptions or purchases

Events participation

Online gaming sites

Potential to use social media as a platform to

$2 Powerball price point as of Jan, 2012
reach new, younger consumers

Hispanic market

Powerball game enhancements as of Jan,
2012
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KEY MESSAGES
GENERAL LOTTERY

Over 28 years and more than $2.3 billion generated for the state of Colorado.

The Colorado Lottery gives players the opportunity to dream big, have fun and take a
chance at winning large, instant cash prizes with a complementary family of games.

All of the proceeds from Lottery sales benefit the state of Colorado, supporting parks and
recreation, building trails, protecting open space and funding education physical
improvement projects.

Proceeds from the Colorado Lottery fund projects in every community in Colorado.

The Colorado Lottery promotes responsible gaming and operates with the highest degree
of integrity, trust, accuracy and responsibility.
CORPORATE

Look at what we’ve accomplished! Highlight what proceeds dollars have accomplished;
sales numbers and other significant Lottery milestones directed specifically to media
outlets, government officials and consumers.

Get out & Play! Proceeds/Impact statements directed to consumers (players and nonplayers).

See what you’ve done for your own community? Secondary benefit to being a Lottery
retailer or a message to proceeds partners for their continued support.

Thank you for making Colorado a beautiful place to play! Partners/beneficiary message.

Look who’s won! Promote winners’ stories and game-specific messages.

The Lottery takes its role seriously. Discuss corporate responsibility and the Lottery’s
mission to raise proceeds.

Play Smart – Problem Gambling Awareness.

Protect Your Prize campaign - protect consumers from fraud/scams.

Thank you for your hard work to make our mission a reality! Employee message.
ALL GAMES KEY MESSAGES:

A wide range of games with a variety of prizes.

No matter how you like to play, we have the game for you.
POWERBALL

General July-Jan
o
You can always dream big with Powerball.
o
Powerball jackpots are always huge and can change your life – starting with a jackpot
of $20 million.
11
o
All proceeds from Colorado Powerball sales stay right here in Colorado.
o
There are nine ways to win playing Powerball. Match 5 of 5 plus Power Play and you
could win a cool $1,000,000.
o

Increase your winnings – PowerPlay.
General Jan-June
o
More (3x more millionaires), Bigger (double starting jackpots), Better (better odds of
winning)
o
$2 to play
MEGA MILLIONS

After 1/15/12: Mega Millions is Colorado’s $1 mega jackpot game.

Drawings on Tuesday and Friday.

Jackpots are always huge and can change your life – starting with a jackpot of $12 million

All proceeds from Mega Millions sales stay right here in Colorado.

Megaplier gives you a chance to multiply your winnings and a chance to win an easy
million without even winning the Jackpot.
LOTTO

Lotto has made more than 391 local millionaires since the game began in 1989 – it could
be you!

Drawings on Wednesday and Saturday.

Lotto is Colorado’s original Jackpot game, giving people in the state the chance to
become an instant millionaire.

Best odds of any growing Jackpot game to win more than a million.
MATCHPLAY

Jackpots start at $100,000 and grow until hit.

Drawings on Tuesday and Friday.

Play MatchPlay in addition to your other games – your favorite game doesn’t have to
know.

MatchPlay gives you MORE:
o
More value - Best value of any Jackpot game. Three lines of play for $2.
o
More ways to play – three lines to play on each ticket; combined play plus line play.
o
More ways to win – four ways to win on each ticket; combined play plus line play;
best overall odds of any Jackpot game.
CASH 5

Cash 5 gives players the chance to win $20,000 through daily drawings.

A chance to win $20K every day.

Winning experience – the number of winners.
12

Best jackpot odds of any Jackpot game.
SCRATCH

Scratch games are fun, offering an interactive, exhilarating experience with the chance to
win cash instantly.

Scratch games have better odds than ever (better prize payouts).

Scratch games give players a wide range of options on price, prize, theme and play style
and may offer a second-chance to win at any given time in the market.

Scratch games may not change your life, but they can change your day.
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RESEARCH AND PLANNING
A research committee will be established that will consist of Cactus and Lottery personnel.
The Colorado Lottery will utilize research budget in FY12 to measure Marketing Plan objectives. In
addition, resources will be allocated to Segmentation and Tracking research in order to match specific
player needs to games offered by the Colorado Lottery. Other research considerations are future
enhancement or replacement to existing games for launch in FY13. Research options available to
the Lottery are listed below.
SECONDARY RESEARCH ANRVICE DESCRIPTION FREQUENCY
Product Portfolio Analysis
This suite of analyses includes Attribute Analysis, Sales Index Analysis, Prize Structure Analysis and
State of the Industry.
Bi-Annual
Geo-Demographic Analysis
Geo-demographic analysis for Colorado.
Annual
Economic Optimization
In year one of the contract, conduct a baseline assessment of the Lottery’s payout levels. Each
subsequent year of the contract, SG will provide an update to this analysis.
Annual
Concept Testing Validation
The Lottery has requested that at least once a year they be provided with some validation of the
concepts launched based upon concept testing. The Lottery is be able to offer this analysis through
their AEGIS MAP and Game Gallery products. They will flag those concepts that went through testing
and were subsequently launched and will provide an analysis that shows actual sales performance.
At least once per year
Segmentation Study
Conduct consumer Segmentation Research for the Lottery; in FY2012.
Attitude and Usage/Tracking Study
Procure an Attitude and Usage study for the Lottery, subsequent to the Segmentation Study. This will
allow for the short form batter to be incorporated. Lottery will then monitor the segments on a
quarterly basis during the ongoing collection of tracking study data.
14
Annually with the intent of quarterly updates.
Concept Testing
The Lottery may choose from either focus groups or Invoke or a combination to meet the biannual
requirement. This type of testing will be conducted twice in a year.
Bi-Annual
Research Consultation
At the direction of the Lottery, SGI will assist in creating a research plan to meet current marketing
objectives.
Ongoing
Industry White Papers
When SGI uncovers information they believe is pertinent to the Lottery’s business, they will share it in
a timely manner.
As Developed
-DEMOGRAPHIC ANALYSIS
Market/Player Analysis
This is the most comprehensive analysis that SGI creates using the system. In depth analysis that
looks at both instant and online games and sales in the marketplace, including product trends,
geographic distribution of sales, players and general retailer distribution.
Advertising and Promotion analysis Through the custom cluster system, SGI can look at which
promotions appealed to which specific groups. They can then use winners’ files to adjust for people
buying where they work versus where they live. There is also a benefit in being able to see “visually”
on a map the areas where segments of the population responded more positively.
Goal: Reach $533 million in sales. Scratch sales will make up $350 million and Jackpot game sales
will make up $183 million.
Objectives: Market research will seek to optimize communication to residents of Colorado to
determine attitudes and behaviors toward products, advertising and playership.
Research structure will change from single responsibility to committee / Jay Sisson research
coordinator.
Strategy 1: Use research to identify best audiences upon which to focus FY12 and beyond efforts.
15
SEGMENTATION STUDY
Description:
Conduct updated Segmentation study to understand types of Lottery
players.
Rationale:
The 2006 study needs to be updated due to the addition of new Jackpot
games and the changes over the past four years since the survey was
last conducted.
Timeline:
Q1/Q2 FY12
Budget:
N/A
Responsibility:
Jay Sisson, Lee Burnett, Cactus
Strategy 2: Use research to identify opportunities to enhance and expand the product line up among
key audiences.
NEW GAME RESEARCH
Description:
Research new lottery jackpot game for key segments to possibly replace
MatchPlay.
Rationale:
Optimize Jackpot Game mix
Timeline:
January 2012
Budget:
$80,000
Responsibility:
Jay Sisson, Lee Burnett, Cactus
EYE TRACKING
Description:
Investigate use of eye tracking studies to determine where to place key
design elements, value statements and descriptors.
Rationale:
Increase awareness of Scratch games to consumers at point of purchase
Timeline:
January 2012
Budget:
$70,000
Responsibility:
Todd Greco, Lee Burnett, Scientific Games, Inc.
16
PRODUCT MARKETING
The Lottery will concentrate on bringing the product mix for both lines of business (Scratch and
Jackpot game) into a 65% - 35% sales ratio configuration. Historically the percentage of Scratch to
total sales has exceeded 65% while Jackpot games have fell below the 35% level. In order for the
Lottery to attain better profitability, more marketing resources will be allocated to Jackpot games with
the objective of to bring the sales ratio to 65/35. The Lottery will launch in January 2012 a new
Powerball game with a $2 price point, better overall odds and more million dollar prizes. Marketing
will continue to access the profitability of existing games to determine the optimum product mix for
Jackpot games.
The Lottery will introduce in December 2011 a $5 Bingo game as part of the overall mix of Scratch
games to complement the current mix of base games and price points. In addition the Lottery will
continue to focus on profitability of games and payouts at all price points in order to meet proceeds
goals.
Goal: Achieve total sales of $527.4 Million in FY12 ($177.4 Million for Jackpot Games; $350 Million
for Scratch games).
Objectives:

Implement a multi-faceted “Play” positioning strategy that encapsulates the three ways to
play; our games, in our great state and in life.


Attain average annual per capita spend of $105.76.
o
Scratch – $1.34 per week or $69.68 annual
o
Powerball – $.30 per week $15.60 annual
o
Lotto – $.15 per week or $7.80 annual
o
Cash 5 -$.08 per week or $4.16 annual
o
Mega Millions - $.13 per week $6.44 annual
o
MatchPlay – $.04 per week $2.08 annual
Increase (past 30 day) playership for all Lottery games to 55%, and:
o
Increase Scratch play from 31% to 33%
o
Achieve Powerball play 25%
o
Increase Lotto play from 23% to 24%
o
Increase Cash 5 play from 9% to 10%
o
Increase Mega Millions play from 18% to 22%
o
Maintain MatchPlay play at 6%
All Games Key Messages:
17

A wide range of games with a variety of risk and reward.

No matter how you like to play, we have the game for you.
Strategy 1: Educate consumers on how easy it is to find, purchase, play and redeem Lottery games;
inform them of its broad range of price points, play styles, jackpot sizes and unique game features.
PROMOTIONS/INCENTIVES
Description:
Utilize various promotions to encourage trial.

Use promotions module especially for Jackpot games.

Model Weekly Jackpot Games pack that includes one ticket for each
draw within a 7-day period. Value is $21, but sell for $20.
Rationale:

Provide retailer plus sell incentive.

Direct marketing with coupons.
Well executed promotions encourage player trial of a new product,
increase average transaction spend, prompt cross-play between
products and product lines, incentivize clerks to ‘ask for the sale’, and
ultimately, increase lottery sales.
Timeline:
Beginning February 2012
Budget:
$300,000
Responsibility:
Marie Valtakis, Lee Burnett, Cactus
PRODUCT/BRAND POINT OF SALE
Description:
Long-term POS materials that feature two or more Lottery products or
the logo, URL and “Don’t Forget to Play” tagline.
Rationale:
Featuring more than one product on long-term POS materials allows us
to feature all of the games under the Colorado Lottery umbrella. For an
entire POS materials description see the reference section.
Likely/Required:


Playcenter
o
Topper/Danglers
o
Header
o
URL strip
STVM
o
Topper
o
Side panel decal
o
URL strip

Lottery In-motion (January)

Six- and three-tiered manual jackpot signs
18

In-store and window automatic Jackpot signs (Powerball, Lotto,
Mega Millions)


“Don’t Forget to Play”
o
Window decals
o
Posters (2 sizes)
o
Jackpot sign backs
On-counter brochure rack with Powerball and Mega Millions jackpot
amounts (with rack extension for additional brochures)

CDU and Ticket messages

Winning Numbers Carrier with lazy susan

Ticket checker sticker and dangler
For Consideration:

New playcenters

Updatable jackpot signs (see below)
Timeline:
July 2011 – June 2012
Budget:
TBD
Responsibility:
Alan Hoffman, In Store Strategic Planning Committee, Cactus
Strategy 2: Educate and promote game feature to core and infrequent players (e.g. Advance Play,
multiplier, etc)
AUTOMATIC JACKPOT SIGNS AT RETAIL
Description:
Investigate options for new signs that will not become obsolete if games
change.
Rationale:
Automatically updating jackpot signs provide consumers with the most
up-to-date jackpot amount at the locations where games are sold.
Timeline:
Q2
Budget:
TBD
Responsibility:
Tom Cargal, Sales, Cactus
19
SCRATCH
In fiscal year 2011, the Colorado Lottery posted record Scratch sales of $345 million (up from $328
million in fiscal year 2011 – a five percent increase). The increase in Scratch sales came from a
number of tactics implemented throughout the year. The majority of these strategies were introduced
during the latter half of Q2 and followed through in Q3 and Q4. The plan included the full
implementation of a new courier delivery system, strategic marketing support that kept the product
message at the forefront nearly every week, an increase in payout in the higher price point
categories, and innovative product development. In order to continue to invigorate the Scratch
product line, the Lottery will position each price point to realize its potential. In fiscal year 2012, the
Colorado Lottery will focus on several key issues such as innovative game design, product line
extension for Bingo, and options available under the new Scratch Contracts in order to increase
Scratch game sales and profitability.
Scratch Key Messages:

Scratch games are fun, offering an interactive, exhilarating experience with the chance to win
cash instantly.

Scratch games have better odds than ever (better prize payouts).

Scratch games give players a wide range of options on price, prize, theme and play style and
may offer a second chance to win at any given time in the market.

Scratch games may not change your life, but they can change your day.
Goal: Achieve Scratch sales of $350 Million.
Objectives:

Increase both the frequency of the play and spend on games for Scratch

Increase Scratch game playership from 31% to 33% as indicated in the June 2011 Tracking
Study.

Increase average monthly spend from $22.50 to $25.00.
Strategy 1: Use the $20 Scratch games to generate excitement for the category, mobilize the core,
and encourage infrequent and jackpot players to play.
$20 MILLIONS SERIES II – MAJESTIC TREASURES
Description: In August, the Lottery will launch another $20 game that features a new
printing technique called “color shift ink,” which gives the tickets a different
color depending on the angle of the ticket. This feature was included on this
ticket due to the fact that it has the potential to generate a lot of sales in a
relatively short period of time.
20
Rationale:
The success of the $20 price point category is vital to the Lottery reaching its
sales goals each year. Each $20 game has the potential of generating $28
to $43 million in sales over the life of the game. By increasing the velocity of
sales for these games, the Lottery can introduce more products thus
increasing the overall profitability of the organization. In the past, the Lottery
has and has not advertised the launch of $20 games, and the games without
advertising support have launched at much lower rates than those with
advertising support. This unique ink in addition to a marketing campaign
could help this game become one of the fast-selling $20 games introduced
by the Lottery, and could open the door to launch an additional $20 game in
FY12.
Likely/Required:

:30 TV

:60 Radio

Outdoor bulletins

Online video and flash banners

POS – Featured game insert, Writing surface, Register topper,
Wobbler

Website – 2CD Web page, Marquee, MyLottery emails, Email footers

Social media – Facebook and Twitter postings; Interactive treasure
hunt
Timeline:
August 8 – September 4, 2011
Budget:
Media - $645,000
Production - $164,000 (not including POS)
Responsibility:
Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
$20 MILLIONAIRE SERIES –
Description:
Projected in April 2012, the Lottery will launch another $20 game that
supports the Millionaires Series format.
Rationale:
The success of the $20 price point category is vital to the Lottery reaching its sales goals each
year. Each $20 game has the potential of generating $28 to $43 million
in sales over the life of the game. By increasing the velocity of sales for
these games, the Lottery can introduce more products thus increasing
the overall profitability of the organization.
Likely/Required:
21

Outdoor bulletins

POS – Register topper, Wobbler

Website – 2CD Web page, Marquee, MyLottery emails, Email footers

Social media – Facebook and Twitter postings
For Consideration:

TBD event support
Timeline:
March 2012
Budget:
TBD
Responsibility:
Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
Strategy 2: Use the popularity and novelty of themed Scratch games to attract and motivate players
of all degrees to play.
$5 WHEEL OF FORTUNE
Description:
In September, the Lottery will launch and promote a Wheel of Fortune
themed Scratch game that features graphics from the most successful
game show in the history of television. Second-Chance Drawing winners
will win a trip to Hollywood for the opportunity to play a non-broadcast
version of Wheel of Fortune.
Rationale:
By taking part in this linked game, the Lottery will have the opportunity to
participate in a product that has a vast appeal to a large audience. As
part of the license fee, the Lottery will receive the following:
Likely/Required:

:30 TV

:60 Radio

Online video and flash banners

POS – Register Topper, Wobbler, Poster, Bonus standee

Website – 2CD Web page, Marquee, MyLottery emails, Email footers

Social media – Facebook and Twitter postings
For Consideration:

Interactive game
Timeline:
September 5 - September 25
Budget:
Media - $523,000
Production - $600
Responsibility:
Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
22
$5 IMMORTAL CASH
Description:
Promote the Immortal Cash Scratch game, gearing efforts towards the
primary demographic for popular vampire-related culture: women 30-45.
The game will include a Second-Chance Drawing for a romantic escape
to the Broadmoor Hotel.
Rationale:
Immortal Cash offers the Lottery a chance to appeal to a new subset of
players in a manner/tone different from traditional campaigns, and
provides the opportunity to engage these players with messages/tactics
that meet them where their interests lie.
Likely/Required:

:30 TV

Outdoor bulletins

Online video and flash banners

POS – Featured game insert, Register topper, Wobbler, Writing
surface

Website – 2CD Web page, Marquee, MyLottery emails, Email footers

Social media – Facebook and Twitter postings, Facebook application
For Consideration:

Cinema :15 on-screen
Timeline:
September 26 – October 16, 2011
Budget:
Media - $470,000
Production - $166,000 (not including POS)
Responsibility:
Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
$1, $2, $3 AND $5 HOLIDAY SCRATCH FAMILY OF GAMES
Description:
In FY12, the Lottery plans to launch another round of “holiday” themed
family of games in early November. These games will feature price
points of $1, $2, $3, and $5.
Rationale:
The Holiday family of games provide the Lottery an opportunity to
generate a large amount of sales in a short time span. During the months
of November and December, the Lottery has the best opportunity to set
new weekly sales records, and possibly surpass $9 million in weekly
sales for the first time in the Lottery’s history.
Likely/Required:

:30 TV

:60 Radio

Online video and flash banners

Outdoor bulletins
23

POS – Featured game insert, writing surface, register topper,
wobbler

Website – 2CD Web page, Marquee (English and Spanish),
MyLottery emails, Email footers

Social media – Facebook and Twitter postings, Facebook application
For Consideration:

Kroenke Sponsorship
Timeline:
November 14 – December 4, 2011
Budget:
Media - $500,000
Production - $30,000 (not including POS)
Responsibility:
Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
Strategy 3: Increase awareness of extended play games to appeal to players interested in the longer
play format.
BINGO SCRATCH GAME(S)
Description:
Launch and support the Bingo play style using the introduction of a
continuous $5 price point within the market.
Rationale:
The Bingo category ($3/$5) produces more than $800,000/week in sales
(a potential of $40 million/year). By supporting these games with a
marketing campaign, increased awareness of the games creates the
potential to increase those sales figures on a weekly basis (when
available, $5 Bingo produced approximately $200,000 per week – this
game was only available around specific holidays). By offering this
game at all times, the Lottery may see an increase of $7-10 million/year
depending on the cannibalization of other $5 games.
Likely/Required:

:30 TV

Online video and flash banners

Outdoor bulletins

POS – Writing surface, register topper, wobbler

Website – 2CD Web page, Marquee, MyLottery emails, Email footers
For Consideration:

Kroenke Sponsorship
Timeline:
April 2012
Budget:
Media - $417,000
Production - TBD
24
Responsibility:
Todd Greco, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
Strategy 4: Offer players more winning opportunities.
2ND CHANCE DRAWING SCRATCH CAMPAIGN
Description:
Create seasonal second-chance drawings for non-winning Scratch
tickets that do not have a game-specific second-chance drawing. Winner
would receive one entry per $1 spent.
Rationale:
Educating consumers on second-chance drawings through ongoing
efforts will provide an added value opportunity to players above and
beyond the instant game play and encourage Scratch ticket sales;
furthermore, a points system based on the ticket price encourages play
at higher price points. This will familiarize players with a points-based
rewards system, setting the foundation for a future “points for prizes”
program where players will have the option to utilize accumulated points
to purchase prizes from a catalogue of prizes (similar to a loyalty rewards
program).
For Consideration:

:30 TV

Outdoor bulletins

Online video and flash banners

:60 Radio

Website – 2CD Web page, Marquee, MyLottery emails, Email footers
Timeline:
June 2012
Budget:
Media - TBD
Production - TBD
Responsibility:
Todd Greco, Marie Valtakis, Lee Burnett, Alan Hoffman, Marketing Staff,
Cactus
25
JACKPOT GAMES
The portfolio of Jackpot games marketed by the Colorado Lottery will seek to maximize profitability
and increase market share by offering a diverse portfolio of products for specific player segments.
Because the Lottery has increased the number of Jackpot games, an umbrella media tactic will
provide the most efficient means to support the category as a whole. Some products that provide the
most opportunity for increased proceeds will be allocated additional marketing resources to support
their individual message in the market. Other products that have a loyal player base and a sustaining
sales trend may not receive additional funds. Approximately one third of the total marketing budget
will be earmarked for Jackpot games support.
Jackpot game category mix
Powerball
Ticket
$1 plus
Mega
Millions
$1 plus
Lotto
MatchPlay
Cash 5
$1
$2 for 3
$1
Cost
Optional
Matrix
Jackpot
lines
$1 Power Play
$1
$2 plus $1
Megaplier
5 of 59 plus 1 of
39 (Powerball)
5 of 56 plus
1 of 46
6 of 42
6 of 38
5 of 32
(Mega Ball)
$20 million
$12 million
$1 million
$100,000
$20,000
G
G
G
G
F
Starts
Grows = G
Fixed = F
30 yr graduated
Jackpot
Payout
annuity or lump
sum @ 50%
annuity value
Drawing
26 yr
annuity or
lump sum of
cash in prize
pool
25 yr graduated
annuity or lump
sum @ 50%
Lump sum
payout
Lump
sum
payout
annuity value
W, S
T, F
W, S
T, F
Daily
1 in 196 million
1 in 176
1 in 5.3 million
1 in 2.8
1 in
million
201,376
1 in 6
1 in 7
Days
*Jackpot
Odds
*Overall
million
1 in 36
1 in 40
1 in 35
Odds
* Odds have been rounded up
26
MEGA JACKPOT GAMES (POWERBALL/MEGA MILLIONS)
In January 2012, Powerball game enhancements (3x more millionaires, double starting jackpots,
better odds) will be rolled out along with a new $2 price point. This provides an opportunity to reach
infrequent and lapsed Powerball plays with news about the game. It also provides an opportunity for
Mega Millions, which will now be Colorado’s only $1 mega jackpot game.
Mega Jackpot Key Messages (ongoing):

Powerball / Mega Millions jackpots are always huge and can change your life.

You can always dream big with Powerball and Mega Millions.

Two big games, four nights to win.

Four big jackpots, four nights to win big.

There are many ways to win playing Colorado Mega Jackpot Games, just ask the Colorado
winners.

Increase your winnings – Power Play and Megaplier

All proceeds from Colorado Powerball and Mega Millions sales stay right here in Colorado.
POWERBALL

General July-Jan
o
You can always dream big with Powerball.
o
Powerball jackpots are always huge and can change your life – starting with a jackpot
of $20 million.
o
All proceeds from Colorado Powerball sales stay right here in Colorado.
o
There are nine ways to win playing Powerball. Match 5 of 5 plus Power Play and you
could win a cool $1,000,000.
o

Increase your winnings – PowerPlay.
General Jan-June
o
More (3x more millionaires), Bigger (double starting jackpots), Better (better odds of
winning)
o
$2 to play
MEGA MILLIONS

General July-Jan
o
After 1/15/12: Mega Millions is Colorado’s only $1 mega jackpot game.
o
Drawings on Tuesday and Friday.
o
Jackpots are always huge and can change your life – starting with a jackpot of $12
million
o
All proceeds from Mega Millions sales stay right here in Colorado.
27
o
Megaplier gives you a chance to multiply your winnings and a chance to win an easy
million without even winning the Jackpot.
Goals:
Achieve Powerball sales of $77 Million.
Achieve Mega Millions sales of $32.4 Million
Objectives:


Powerball
o
Achieve Powerball playership of 25%
o
Increase average monthly spend from $15 to $16
o
Maintain an average 35% Power Play rate.
Mega Millions
o
Increase Mega Millions playership from 18% to 22%, as indicated in the June 2011
Tracking Study
o
Increase average monthly spend from $17.50 to $21.00
o
Maintain an average 35% Megaplier rate.
Strategy 1: Co-promote actual Powerball and Mega Millions jackpot amounts to increase jackpot
awareness among all audiences.
JACKPOT AWARENESS
Description:
Use point of purchase and mass media awareness vehicles to get the
jackpot amounts for the Mega Jackpot Games out to the public. Increase
activity when each game reaches its agreed upon trigger point (Tier 1:
$100 million +; Tier 2: $200 million+).
Rationale:
Jackpot awareness encourages purchase and reminds consumers to
play.
Likely/Required:

14X48 Statewide Bulletins

Online banners

In-store signage

When reach trigger
o
Media Releases
o
Web Emails
o
Social Media
o
Increase online banner weight
28

Kroenke Sponsorship

Rockies Sponsorship

Live read radio

Newspaper ads

Digital OOH (Q3-4)
Timeline:
July 1, 2011 through June 30, 2012
Budget:
TBD
Responsibility:
Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
Strategy 2: Educate and promote game features to core and infrequent players.
JACKPOT GAME CALENDAR
Description:
Feature a calendar of the Jackpot games draw days at retail.
Rationale:
A great way to educate consumers on the draw days of the Jackpot
games and, in turn, remind consumers of the range of games from the
Lottery.
Likely/Required:

POS – CDU Surround, Poster, In-counter strip, Wallet card,
Playcenter/STVM Topper
Timeline:
January 2012 – June 2012
Budget:
Production - $3000
Responsibility:
Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
Strategy 3: Generate awareness and create game differentiation for the Powerball game
enhancement ($2 price point).
POWERBALL $2 CHANGE
Description:
Generate excitement for the new Powerball game, along with awareness
of the price change from $1 to $2.
Rationale:
To educate Consumers on the new “Powerball 2.0”
Likely/Required:

:30 TV

:30 Radio

14X48 Statewide Bulletins (existing) – $2 extension

14x48 Additional statewide bulletins

Online banners – Baseline and upweight

POS – CDU Surround, Poster, Featured Game insert, Wobbler,
Register Topper, Buckslip brochure
29

Revised permanent POS – HTP, Wallet card, jackpot sign inserts

When reach trigger ($100m or more) – see jackpot alert campaign
above
Timeline:

Kroenke Sponsorship

Rockies Sponsorship
December 26, 2011 – January 29, 2012
Sustaining: March 5, 2012 – April 8, 2012
Budget:
Media – $1,230,000 (plus $957,000 for committed OOH and Online)
Production - $200,000
Responsibility:
Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
MEGA MILLIONS WINTER CAMPAIGN
Description:
Establish Mega Milions as the $1 mega jackpot game.
Rationale:
Reminding consumers that another $1 option is available may help retain
current Powerball players should they not be willing to continue to play
Powerball at the $2 price point.
Likely/Required:

:30 TV

:30 Radio

OOH 14X48 Statewide Bulletins (existing) –$1 extension

Online banners – Baseline and upweight

POS – CDU Surround, Poster, Featured Game insert, Wobbler,
Register Topper, 8x3 banner, Playslip holder

When reach trigger ($100m or more)
o
Media Releases
o
Web Emails
o
Web Marquee
o
Social Media
o
Increase online banner weight

Kroenke Sponsorship

Rockies Sponsorship
Timeline:
January 30, 2012 – March 4, 2012
Budget:
Media – $525,000 (plus $957,000 for committed OOH and Online)
Production - $175,000
Responsibility:
Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
30
LOTTO
Lotto, Colorado’s game, is projected to produce $38 million in FY12. Lotto appeals to the same player
segments as Powerball and Mega Millions; namely Jackpot Chasers, Fun Loving Realists, Active
Fans and Dabblers.
Lotto Key Messages:

Lotto is Colorado’s original Jackpot game, giving people in the state the chance to become
an instant millionaire.

Lotto has made more than 392 people in Colorado millionaires since the game began in
1989.

Best odds of any growing Jackpot game to win more than a million.
Goal: Achieve Lotto sales of $38 million
Objectives:

Increase Lotto playership from 23% to 24% as indicated in the June 2011 Tracking Study.

Increase average monthly spend from $16.00 to $16.50.
Strategy 1: Remind consumers that Lotto has made over 391 Colorado millionaires and communicate
jackpots when relevant.
LOTTO PROMOTION
Description:
Promote the Lotto product with the Promotions Module.
Rationale:
By giving players the opportunity to purchase a Lotto ticket and every nth
ticket purchased throughout the state will produce a free Lotto ticket.
Exact setup of the promotion will be decided on when testing of the
Promotions module is completed.
Likely/Required:

Radio

Online

POS

News Media

Website
Timeline:
Q4
Budget:
Cost
Responsibility:
Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
31
LOTTO TRIGGERED JACKPOT CAMAPIGN
Description:
Use point of purchase and mass media awareness vehicles to
communicate Lotto jackpots when they reach the agreed upon trigger
point of $5 million.
Rationale:
Jackpot awareness encourages purchase and reminds consumers to
play.
Likely/Required:

Timeline:
:15 live read radio
January 2012 – June 2012 (when the jackpot reaches the $5 million
trigger and not during a time when Powerball or Mega Millions are at
trigger amounts)
Budget:
TBD
Responsibility:
Jay Sisson, Lee Burnett, Alan Hoffman, Marketing Staff, Cactus
32
MATCHPLAY
During FY12, no marketing budget will be appropriated for the MatchPlay product. This is in
response to the analysis completed on the marketing campaign during the fourth quarter of FY11 that
had no impact on sales of the product. Product Marketing is developing a multi-option exit strategy
for MatchPlay that could start as early as March 2012. MatchPlay sales will be monitored during
FY12 and should the product reach a point where acceptable profit is a risk, a decision to end the
game earlier may be required.
MatchPlay Key Messages:

Jackpots start at $100,000 and grow until hit.

Drawings on Tuesday and Friday.

Play MatchPlay in addition to your other games – Your favorite game doesn’t have to know

MatchPlay gives you MORE:
o
More value - Best value of any Jackpot game. Three lines of play for $2.
o
More ways to play – three lines to play on each ticket; combined play plus line play
o
More ways to win – four ways to win on each ticket; combined play plus line play;
best overall odds of any Jackpot game.
Goal: Achieve MatchPlay sales of $10 million.
Objective:

Maintain MatchPlay playership at 6% as indicated in the June 2011 Tracking Study.
33
CASH 5
Cash 5 is projected to produce $20 million in FY12. Cash 5 is Colorado’s daily game with draws
every day of the week. Active Fans, Dabblers and Dreamers make up the loyal player segments.
Very little additional marketing resources will be allocated to Cash 5 beyond the retail point-of-sale
and possible umbrella advertising.
Cash 5 Key Messages:

Cash 5 gives players the chance to win $20,000 daily.

A chance to win $20K every day.

Winning experience – the number of winners.

Best jackpot odds of any Jackpot game.
Goal: Achieve Cash 5 sales of $20 Million.
Objectives:

Increase Cash 5 playership from 9% to 10% as indicated in the June 2011 Tracking Study.

Increase average monthly spend from $16 to $17.
34
CORPORATE MARKETING
The Colorado Lottery Corporate Marketing program consists of the strategies and tactics used to
identify, create and maintain satisfying relationships with customers with a specific focus on
generating proceeds. Key areas within our corporate marketing program are the following: Customer
Service, Product Marketing, Advertising, Proceeds Awareness, Winner Awareness, Media Relations,
Corporate Communications and Employee Relations.
Key General Lottery Messages:

Over 28 years and more than $2.3 billion generated for the state of Colorado.

The Colorado Lottery gives players the opportunity to dream big, have fun and take a chance
at winning large, instant cash prizes with a complementary family of games.

All of the profits from Lottery sales benefit the state of Colorado, supporting parks and
recreation, building trails, protecting open space and funding education physical improvement
projects.

Profits from the Colorado Lottery fund projects in every community in Colorado.

The Colorado Lottery promotes responsible gaming and operates with the highest degree of
integrity, trust, accuracy and responsibility.
Corporate Key Messages

Look at what we’ve accomplished! Highlight what proceeds dollars have accomplished; sales
numbers and other significant Lottery milestones directed specifically to media outlets,
government officials and consumers.

Get Out & Play! Proceeds/Impact statements directed to consumers (player and non players).

See what you’ve done for your own community? Secondary benefit to being a Lottery retailer
or a message to proceeds partners for their continued support.

Thank you for making Colorado a beautiful place to play! Partners/beneficiary message.

Look who’s won! Promote winners’ stories and game-specific messages.

The lottery takes its role seriously. Discuss corporate responsibility and the Lottery’s mission
to raise proceeds.

Play Smart – problem gambling awareness.

Protect Your Prize campaign protect consumers from fraud/scams.

Thank you for your hard work to make our mission a reality! Employee message.
Goal: Increase 70 percent favorability by changing 24 neutral; 5% from neutral to somewhat favorable
as documented in September/October FY12 Tracking Study, with long-term goal (three years) of
increasing favorability to 10 and decreasing neutral to 14% percent.
35
Objectives:

Maintain a “very positive” and “somewhat positive” favorability rating of 70% by supporting
main reasons for favorability.
Strategy 1: Generate awareness for winners in an effort to maintain or increase favorability and keep
players playing.
WINNER AWARENESS CAMPAIGN
Description:
Create awareness of Lottery winners.
Rationale:
Help make winners’ of a large jackpot endear themselves to the Lottery
and allow the Lottery to tell their winner story. It is believed that securing
more winner stories will help reach/maintain a strong favorability rating.
Likely/Required:

Revamp the entire Winner Awareness Campaign-VIP/Winners
Circle/Concierge

Change verbiage on press releases

New winner’s video

Winners “area” to take pictures and give them extra attention
Timeline:
FY12
Budget:
TBD
Responsibility:
Brooke Christopher, Heather Black, Cactus
Strategy 2: Leverage proceeds contributions help to make the Lottery a more likable government
agency and provide an additional reason to play Lottery games.
VIDEO AND PHOTOGRAPHY
Description:
Create ongoing series of videos and b-roll footage.
Rationale:
To share where and how Lottery funds are used to make our state more
beautiful for Colorado residents.
Timeline:
Ongoing
Budget:
Approximately $35,000 annually
Responsibility:
Brooke Christopher, Heather Black, Matt Robbins, Cactus
PROCEEDS AWARENESS CAMPAIGN
Description:
Continue to make the Lottery a more likeable government state agency
by increasing awareness and overall education about proceeds.
Rationale:
Research shows that increasing proceeds awareness leads to increased
favorability and helps to justify purchase
36
Required/Likely:

Continue aggressive Signage program.

Integrate into more focused events like Furry Scurry and REI related
events like Bike to Work Day.

Proceeds store poster program.

Creating a Proceeds “widget” to include on web pages.

Mile marker Proceeds signs.

Social media – increase posts about proceeds & build relationships
with proceeds partners through social media platforms.
Timeline:
FY12
Budget:
TBD
Responsibility:
Brooke Christopher, Heather Black, Matt Robbins, Cactus
COMMUNITY PROCEEDS AWARENESS CAMPAIGNDescription:
Educate the general public that over the past 28 years, the Lottery has
generated more than $2.3 Billion in proceeds and localizing that
message all citizens so they may recognize the significant contribution of
the Lottery.
Rationale:
Proceeds awareness encourages favorability and the potential purchase
of products while reminding consumers to play.
Timeline:
FY12
Budget:
$20,000
Responsibility:
Brooke Christopher, Heather Black, Matt Robbins, Cactus
COMMUNITY GOVERNMENT AND PARTNER RELATIONS
Description:
The Lottery takes its role in Colorado seriously. The Lottery has an
ongoing commitment to the citizens of Colorado and especially their
players to provide support and protection of the community and the
environment.
Rationale:
Generate corporate responsibility awareness is to help reach/maintain a
strong favorability rating.
Likely/Required:

Continuation of Protect Your Prize campaign – awareness and
education to help protect our players from frauds and scams

Continuation of Problem Gambling Awareness: The Colorado Lottery
promotes responsible gaming and operates with the highest degree
of integrity, trust, accuracy and responsibility.

Bolster our “green” message (billboard materials, scratch recyclable
paper etc.)
37

Possible partnership with a non-profit organization with a proceeds
message (ex. Audubon)

Re-instate Amber Alerts
Timeline:
FY12
Budget:
$30,000
Responsibility:
Brooke Christopher, Heather Black, Matt Robbins, Cactus
Strategy 3: Communicate products, programs, promotions and more to all Lottery employees to
maximize internal awareness and support.
EMPLOYEE RELATIONS:
Description:
Continue to improve overall morale through internal employee
communications and programs.
Rationale:
Communicate products, programs, promotions and more to all Lottery
employees to maximize internal awareness and support
Likely/Required:

Survey – Use Survey Monkey to conduct inquiry among staff as to
what they would like to hear about, preferred communication, and
other suggestions.

Intranet
o
Update intranet landing page with key messages
o
Include a promotional corner
o
Include employee resources like the manual, procedures
doc, etc

Employee Meetings - find best places/ways for the Lottery
employees (and their families) to interact and bond with one another.

Continue to develop and execute internal Ticket newsletter on a
monthly basis and the Lottery Enquirer on a weekly basis. Both
communicate internal news about employees (and their families),
promotions, product-related news, sales numbers, message from our
Director etc.

Blurb - investigate updating the font/color of the blurb copy to help it
stand out when updates are made.

Issue Resolution – determine ways for employees to bring forward
issues anonymously while still being able to provide the answer back
to staff to clear up any misperceptions (e.g. responses posted in
Ticket, “suggestion box”,
Timeline:
FY12
Budget:
$3,000
38
Responsibility:
Brooke Christopher, Heather Black, Matt Robbins, Cactus
Strategy 4: Use direct to consumer avenues to achieve excellent customer service in order to
maximize satisfaction and encourage players to be brand ambassadors.
CUSTOMER SERVICE
Description:
Continue efforts to strive for elegant, effective and efficient customer
service in order to maximize satisfaction and encourage players to be
brand ambassadors.
Rationale:
Assure positive engagement with customers for increased media
attention and to ultimately generate increased sales.
Likely/Required:

Revamp the entire Winner Awareness Campaign (see above
strategy 1)

Online gaming space integration

Continue to execute on social media contests and campaigns.

Enable computers in claims office for consumers to enter 2CDs and
signup for MyLottery.

Hold weekly frequent player drawings in claims offices.
Timeline:
FY12
Budget:
$20,000
Responsibility:
Brooke Christopher, Heather Black, Matt Robbins, Cactus
MYLOTTERY PROGRAM
Description:
Develop an interactive relationship with our customers.
Rationale:
Direct, relevant engagement with our customers will cultivate our brand
by creating loyal customers and fans who will purchase our products and
encourage others to do so.

Manage and grow membership

Manage email communications

Execute member incentives

Develop points progra
Timeline:
Ongoing FY12
Budget:
$2,600
Responsibility:
Eliza Tyndall, Cactus
STATE FAIR SPONSORSHIP
Description:
Participate in the State Fair to reach core players.
39
Rationale:
The Lottery has participated in the State Fair for over 20 years. This
continues the relationship with the State Fair and the city of Pueblo.

Loaf ‘N Jug Drawing POS

On location State Fair POS

Caminos de Southern Colorado print ad

Pueblo Chieftain print ad
Timeline:
August 2011
Budget:
Media - $25,000
Production - $15,000
Responsibility:
LuAnn Caligaris, Toni Glover, Cactus
TASTE OF COLORADO SPONSORSHIP
Description:
The Taste of Colorado is a four-day event, over Labor Day weekend that
takes place in Civic Center Park, Downtown Denver. This event has
been attracting a loyal audience with an array of demographics since
1984. The admission to the event is free thus enhancing attendance
numbers, consistently drawing over 500,000 people from around
Colorado.
Rationale:
A Taste of Colorado draws over 500,000 over a four day period which
gives the Lottery and opportunity to increase brand awareness and
generate sales.

30’ of frontage x 20’ deep exhibit space

Included in all press releases

Name recognition and line in the following pieces:
o
Pre-Event Brochure
o
Newspaper
o
Weekend Brochure
o
On the two onsite Sponsor recognition signs
o
On the Festival’s website:

Tickets and Passes to be used for Sales incentives:

15 VIP parking passes
Timeline:
September 2011
Budget:
$20,000
Responsibility:
Marie Valtakis, Lee Burnett, Cactus
CSU-PUEBLO SPONSORSHIP
Description:
Sponsorship with CSU-Pueblo athletics.
Rationale:
Build relationship with local university and increase brand awareness on
campus.
40

Two (2) 34” (inch) X 32’ (foot) Neta & Eddie DeRose ThunderBowl
sideline signs

Two 4’ x 16’ permanent signs on the front of Neta & Eddie Derose
Thunderbowl

One (1) 4’ X 12’ sign in Massari Arena

Full page ad in 2008 football game program

Full page ad in 2008-09 basketball game program

Scholar athlete presentation
Timeline:
August 2010 – March 2011 (year two of three year agreement)
Budget:
$11,000 ($9,000 for three year agreement)
Responsibility:
Tom Cargal, Cactus
KROENKE SPONSORSHIP
Description:
Promotional program with sports teams to leverage their credibility and
reach a prime Lottery audience in a fun and entertaining atmosphere.
Rationale:
The sport teams of KSE9 (Mammoth, Nuggets, and Avalanche) offer
relatively high reach and frequency because the large fan base and
many season ticket holders. The Pepsi Center venue gives the Lottery
the opportunity to reach new players and current customers in an
engaging, fun way.

Blimp at all Mammoth and Avs games

PA announcements

Powerball and Mega Millions jackpot amounts and logos on digital
fascia and center scoreboard

Promo Teams for Mammoth and Nuggets
Timeline:
October 2011 – June 2012
Budget:
Media - $200,000
Responsibility:
Marie Valtakis, Lee Burnett, Cactus
ROCKIES SPONSORSHIP
Description:
Promotional program with sports teams to leverage their credibility and
reach a prime Lottery audience in a fun and entertaining atmosphere.
Rationale:
The Rockies and Coors Field offer relatively high reach and frequency
because the large fan base and many season ticket holders.
Timeline:
July 2011 - September 2011 - Mega Millions
April 2012 - June 2012 (TBD)
Budget:
Media - $180,000
Responsibility:
Marie Valtakis, Lee Burnett, Cactus
41
OLATHE SWEET CORN FESTIVAL
Description:
Olathe Sweet Corn Festival has been a yearly tradition since 1992. The
goal of the festival is to bring people together and provide them with a
sense of community and accomplishment. The event helps improve the
economic status in Olathe and has been extended to two days due to
past success
Rationale:
The Olathe Sweet Corn Festival allows the Lottery to increase brand
awareness, reach new players and generate sales.
Timeline:
August 5 & 6, 2011
Budget:
$5000
Responsibility:
Marie Valtakis, Lee Burnett, Cactus
CHILI & FRIJOLES FESTIVAL
Description:
The annual Loaf ’N Jug Chile & Frijoles Festival‚ held each year in late
September‚ is Pueblo’s harvest celebration.
Rationale:
The event features music‚ arts and crafts‚ cooking competitions and
chilies‚ chilies‚ chilies. Held downtown along Union Avenue‚ it draws
Pueblo residents as well as people from across the state and around the
nation. This venue gives the Lottery an opportunity to increase brand
awareness, reach new players and generate sales.
Timeline:
September 23-25, 2011
Budget:
$4,500
Responsibility:
Marie Valtakis, Lee Burnett, Cactus
BUDWEISER EVENT CENTER SPONSORSHIP
Description:
Sponsoring and attending one multiple events that take place at the
Budweiser Event Center throughout the year.
Rationale:
Budweiser Event Center is located in Loveland, Colorado and is host to
500,000+ guests a year for events such as Colorado Eagles Hockey
games, rodeos, concerts and trade shows. The Larimer County
Fairgrounds and Events Complex, aka “The Ranch”, which includes the
Budweiser Event Center on its grounds, also encompasses an arena,
two livestock pavilions, the First National Bank building and Thomas M,
McKee Building. These venues have quickly become popular locations
for sporting events, entertainment and agricultural hubs for the Denver
and Northern Colorado population. An average of 800,000 guests is on
the grounds throughout the year, which makes this a great opportunity
for the Lottery to continue to increase brand awareness.
42

Presenting Sponsor of the World Championship Ice Racing &
Arenacross
o
Support includes logo inclusion in Newspaper, event tickets,
Web and event posters, email blasts and mentions on Radio

o
Press release
o
On-site promotion: Banners, Booth space, Mascots
Monster Truck Winter Nationals
o
Logo inclusion on posters, email blasts, Newspaper, event
tickets, TV and Radio mentions
o

Ticket outlet or on-site promotion
Larimer County Fair & PRCA Rodeo
o
Support includes logo inclusion in daily maps, Newspaper,
Web and event posters, email and mentions on Radio
o
Parade float entry
o
On-site promotion: Signage, Booth space, PA
announcements, signage on shuttles
o
Full page ad in program
o
Message on LED
Timeline:
January, 2012 – June, 2012
Budget:
$30,000
Responsibility:
Marie Valtakis, Lee Burnett, Cactus
NATIONAL WESTERN STOCK SHOW
Description:
Sponsoring and attending one of the largest events in Colorado that
averages 500,000 in attendance each year.
Rationale:
The 16 day show serves as an entertainment arena, hosting one of the
world’s richest regular season professional rodeos, largest horse show
and Colorado’s largest tradeshow. National Western Stock show gives
the Lottery an opportunity to increase brand awareness, reach new
players and generate sales.

2012 Guest Services Guide (Circ. 50,000). Program benefits
include: Logo on interior sponsor marquee page, Full page, four
color ad

Premium Exhibit Space - Complimentary 16’ x 20’ of premium
exhibition space at a NWSS Expo

Onsite Branding during the National Western
o
Coliseum – One 3’x8’ bangboard (Provided by NWSS)
43
o
Expo Hall - One North, South and Center Ticket Lobby
Sponsor Marquee

o
Events Center - One Lobby Marquee
o
Promotional Rights
One (1) :90 promotion for each of 28 rodeo performances
o
Promotion may include Colorado Lottery street team
interacting with fans on the concourse to give away t-shirts,
etc. (Giveaway item costs responsibility of Colorado Lottery
and must be pre-approved by NWSS)
o
Promotion will be supported with PA announcements and
video screens – Colorado Lottery to provide script for PA
announcements and logo for inclusion on video screens

Roaming rights for ten (10) rodeos one hour prior to the event

2012 Guest Services Guide (Circ. 50,000). Program benefits
include: Logo on interior sponsor marquee page and Full page, four
color ad

Internet and Direct Marketing Access: Trademark and link from
www.nationalwestern.com and Trademark and 30 word description
on Sponsor page
Timeline:
January 7-21, 2012
Budget:
$46,700
Responsibility:
Marie Valtakis, Lee Burnett, Cactus
WILD WILD WEST FESTIVAL
Description:
Wild Wild West Festival is a western themed festival that features events
for the whole family ranging from concerts to carnival rides.
Rationale:
This three day event, which attracts roughly 60,000 people, will allow the
Lottery to increase brand awareness, reach new players and generate
sales.
Timeline:
May 2012
Budget:
TBD
Responsibility:
Marie Valtakis, Lee Burnett, Cactus
COUNTRY JAM
Description:
Country Jam is a four day country music festival which hosts top notch
national talent.
44
Rationale:
Country Jam draws festival customers from a five state region which will
allow the Lottery to increase brand awareness, reach new players and
generate sales.
Timeline:
June 2012
Budget:
TBD
Responsibility:
Marie Valtakis, Lee Burnett, Cactus
Strategy 5: Promote the Lottery’s corporate programs to showcase its commitment to the State, its
communities and players.
CORPORATE RESPONSIBILITY CAMPAIGN
Description:
Critical to make the Lottery a more likeable government state agency
and increase awareness and overall education about the Lottery’s
corporate programs.
Rationale:
Promote the Lottery’s corporate programs to showcase its commitment
to the State, its communities and players.
Likely/Required:

Continuation of Protect Your Prize and Problem Gambling
participation and campaigns.

Annual Report

Bolster our “green” message (billboard materials, scratch recyclable
paper etc.).

Possible partnership with a non-profit organization with a proceeds
message (ex. Audubon).

Reintroduce Amber Alerts at retail level.

Utilize LIM at appropriate levels.
Timeline:
Ongoing
Budget:
$40,000
Responsibility:
Brooke Christopher, Heather Black, Matt Robbins, Cactus
45
RETAILER RELATIONS
In FY12 at retail, the Lottery will primarily focus on the optimization of its existing network in several
areas. Due to the contract extension with its on-line vendor, Scientific Games, new technology and
equipment will be provided to help retailers better service players operationally, while also giving
them additional tools to grow sales through new marketing and promotional advances systematically.
The Lottery will continue to educate and motivate retailers at all levels from front-line clerks to
corporate management on the benefits of selling Lottery and its value to their business. During this
fiscal year, the emphasis for the Lottery will also be providing on-going training to its sales force so
that they can be empowered to maximize service to their retailers and grow sales throughout their
respective territories. Improved inventory management will also be a key factor in the upcoming year,
as the Lottery continues to refine its courier Scratch distribution system. Finally, the Sales section will
work toward growing its current retailer base to over 3100 retailers by recruiting quality accounts both
in traditional and non-traditional channels.
Goal: Increase retail network by 2-3% (approximately 60-90 retailers) including grocery, convenience,
liquor, restaurant/bar and other trade styles, and optimize retail location sales to reach $527.4M
annually.
Objectives:

Retail Accounts:
o
Increase retail network by 2-3% (approximately 60-90 retailers) including grocery,
convenience, liquor, restaurant/bar and non-traditional trade styles.

Retail Sales Performance:
o
Increase average sales per trade style:

Reach $110 million in annual average grocery store sales ($251,000 per
outlet)

Reach $347 million in annual average convenience store sales ($210,000
per outlet)

Reach $5 million in annual average bar/restaurant sales ($64,000 per outlet)

Reach $36 million in annual average liquor store sales ($63,000 per outlet)

Reach $29.4 million in annual average non-traditional/other trade styles sales
($98,000 per outlet)
Strategy 1: Enhance retailer/clerk relations (e.g. customer service, retailer-friendly policies,
compensations, etc.) in an effort to convert retailers from sales people into brand ambassadors for
the Lottery.
46
RETAILER EXTRANET
Description:
Retailer Extranet – microsite targeted to Lottery retailers
Rationale:
The microsite will provide retailers with resources to manage their Lottery
business efficiently and effectively.
Likely/Required:

Billing statements and business reviews financial data

Troubleshooting tips

Merchandising tools

Product sales information including profit and bonus figures

Accounting forms

Security information
Timeline:
Q2
Budget:
Contract Expenditure
Responsibility:
Eliza Tyndall, Cactus
Strategy 2: Identify prospective Lottery retailers and recruit them to sell Lottery products to grow the
retail network while maintaining current retailer base.
INCREASING RETAIL NETWORK
Description:
Promoting the benefits of selling Lottery products to various tradestyles
in the marketplace.
Rationale:
Increasing the retail network with proven tradestyles and new tradestyles
should help increment overall Lottery sales and achieve FY12 sales
goals.
Likely/Required:

Billing statements and business reviews financial data

Retain existing retail accounts

Increase traditional distribution channels, i.e. supermarket/grocery,
convenience store, and liquor

Expand into non-traditional distribution channels, i.e. dollar stores,
bowling alleys, Hispanic groceries, bar/restaurants, and regional
airports
Timeline:
FY12 ongoing
Budget:
$25,000
Responsibility:
Tom Horvat
Strategy 3: Expand internal and external Lottery exposure in retail locations and improve
visibility/display of Lottery products, equipment and point-of-sale materials.
47
IMPROVE MERCHANDISING AT RETAIL
Description:
Expand internal and external Lottery exposure in retail locations and
improve visibility/display of Lottery products, equipment and point-of-sale
materials.
Rationale:
Improved merchandising/awareness of Lottery products stimulates
customer impulse purchases to help increase sales and achieve FY12
Lottery sales goals.

Sell-in/coordinate SGI contract extension deliverables, i.e. Lottery In
Motion displays, new ticket checkers, wand validators

upgrade STVMs to 28-game capacity in high volume Scratch
accounts

explore permanent outdoor signage to identify Lottery retailers

use merchandiser audit research study to improve standards

execute SGI contract provided training techniques at retail
Timeline:
FY12 on-going
Budget:
TBD
Responsibility:
Tom Horvat
Strategy 4: Educate retailers on Lottery products, equipment, selling techniques and benefits of
selling Lottery products
TRAINING, PLUS-SELLING TECHNIQUES, AND OPERATIONS.
Description:
Educate retailers on Lottery products, equipment, selling techniques, and
the benefits of selling Lottery products.
Rationale:
By increasing training to our retailers, they will be better-equipped to
serve our players as brand ambassadors and ultimately increase Lottery
sales.

Produce Lottery reference manual on equipment operations and
product sales to slide under Extrema terminal.

Revise/update quick reference cards (QRCs) for store personnel to
reference how to sell tickets

Create monthly training flyer emphasizing a particular Lottery game
enhancement/feature, i.e. Power Play, Advance Play, etc. for sales
reps to train retailers

Explore various training methodologies to reach all retail levels, i.e.
corporate, district managers, store managers, clerks, etc.
48

Continue to use Lottery publications, i.e. Retailer Rap, Minute
Message, etc. and Lottery Web site retailer extranet to educate
retailers on key Lottery messages.
Timeline:
FY12 on-going
Budget:
$30,000
Responsibility:
Tom Horvat
Strategy 5: Execute promotions to motivate retailers to sell Lottery products and stimulate consumers
to purchase.
PROMOTIONS AT RETAIL
Description:
Use promotions to motivate retailers and consumers in order to
increment sales of all Lottery products.
Rationale:
Effectively executing promotions at retail will help motivate players to buy
and retailers to sell Lottery products resulting in sales increases.

Use SGI promotional module to facilitate various Jackpot game
promotions, i.e., statewide, chain-specific, retailer specific, etc.

Conduct 3 chain and 175 independent retailer promotions per
quarter.

Create/implement tradestyle-specific promotions, i.e. bar/restaurant,
liquor, etc. to stimulate sales as warranted.

Coordinate in-store product promotions to support advertised
products in order to create synergistic effort.
Timeline:
FY12 on-going
Budget:
$60,000
Responsibility:
Tom Horvat
Strategy 6: Train, empower and provide tools for Sales Representatives.
RETAIL TRAINING PROGRAM
Description:
Train, empower, and provide sales tools for Lottery sales
representatives.
Rationale:
By providing the sales force with on-going training, they will be able to
provide better service and ultimately increase Lottery sales in their postcourier role as sales consultants to their accounts.

Use SGI-provided training in Scratch contract where appropriate.

Upgrade rep hardware for improved accessibility to information.

Update sales rep auto reorder book and develop sales report
manual.
49

Conduct monthly district meetings and bi-annual sales meeting to
inform sales reps on key Lottery initiatives.
Timeline:
FY12 on-going
Budget:
$20,000
Responsibility:
Tom Horvat
Strategy 7: Continue to refine Scratch game distribution system (courier system) to maximize Scratch
product at retail.
IMPROVED SCRATCH INVENTORY MANAGEMENT
Description of idea:
Continue to refine Scratch game distribution using courier delivery and
back office auto reorder system to maximize Scratch sales.
Rationale:
Improving day-to-day management of Scratch inventory in the field will
result in sales increases.

Create retail operations manager position for improved day-to-day
management of back office auto reorder system.

Increase velocity of Scratch games systematically in conjunction with
advertising campaigns, holidays and new games.

Implement ability for sales reps to transfer full packs from one retailer
to another.

Continue to monitor price point mix, number of Scratch games in the
marketplace, inventory levels by game, and game launch schedules
in order to optimize Scratch sales statewide.

Minimize Scratch ticket returns to reduce costs.
Timeline:
FY12 on-going
Budget:
NA
Responsibility:
Tom Horvat
50
REFERENCE
1. SWOT
2. CORPORATE IDENTITY
3. PRODUCT REVENUE AND CONTRIBUTIONS
4. LOTTERY GAME PLAYERSHIP
5. DEMOGRAPHICS
6. AUDIENCES
7. RESEARCH
8. POINT OF SALE
51
THE COLORADO LOTTERY – SWOT
STRENGTHS

Strong and loyal playership base

Established products with equity

Colorado economy stronger than national


No promotions module during the first half
of FY11

Distance between Pueblo, Denver, Grand
average and on the rebound
Junction and Ft Collins - some disconnect
Industry and professional Lottery staff
present
experience

WEAKNESSES

Dependency of overall Jackpot game
Vision and mission clearly communicated
revenue on size of Powerball and Mega
to all staff
Millions jackpots

Updated brand emphasis

Security vs. business process/attitude

Proceeds go to a great cause that is

Economy still lagging and discretionary
supported by residents

Good relationship with proceeds
recipients

spending squeezed

Back office system not providing reporting
capabilities as expected.
New back office system is in place and
working

On-going consumer research tracking and
reporting

Advances in using digital technology
52
THE COLORADO LOTTERY – SWOT CONTINUED
OPPORTUNITIES


THREATS
Full implementation of new courier/

Jackpot fatigue
inventory management system to create

National and Colorado economy still lagging
efficiency and timely re-stocking of retailer

Mergers and acquisition of lottery vendors
inventory

Anti-gambling activists
Specific proceeds distribution (compared

Payout pressure on Scratch products limits
to general fund for other states)
profitability

New Web site retailer Extranet

Funding process

New plan for MyLottery membership

Vendor/Supplier power

Introduction of new Jackpot games or

IT consolidation/centralization
enhancements (Raffle and Lotto)

Powerball and Mega Millions impact on

Potential to promote entertainment value
other Lottery games
of Lottery games

Reorganization of Product Mix

Streamline business processes

Aging demographic of lottery players

Positive relationships with retailers

Off-shore online gambling sites

Retailer expansion


Promotions module slated for February
2012 (estimated)

Advances in using digital technology
53
PRODUCT DEVELOPMENT – SWOT
STRENGTHS


Experienced, knowledgeable and

Resources are limited
motivated personnel

Ability to access an ad hoc system of
Consistent record of achievement in all
product categories


Research of online game development
centered in one position

Available external resources (Industry
network)

information/reports
Back office system to support launches
and promotions

WEAKNESSES
Have reached capacity with current online
games

Unchanged Scratch category
Solid understanding of what games work
best

Innovation, creativity

Additional vendors
OPPORTUNITIES


THREATS
New back office system helps to launch

Limited resources for product development
new games and refresh existing games

Ability to do business in an efficient manner
Create better relationships between Sales
because of division/department
and Marketing through communication
policies/work in silos

Research for new products

Personal and professional growth through

Economy and rising costs of consumer
goods
conferences, symposiums and user

Other, online lottery-type competitors
conferences – amendment 41

Expensive costs that come with Licensed

Management training opportunities

Five-year Strategic plan in place

State budget

New dynamic research

$2 Powerball price point

Scratch RFP
Properties
54
JACKPOT GAMES – SWOT
STRENGTHS

WEAKNESSES
Established Powerball, Meg Millions,

System capabilities – can expand games
Lotto, Cash 5 and MatchPlay brands

No promotions module until January 2011
The addition of Mega Millions gives

Coupon promotions hit marketing budget
players four nights to dream big and

Lack of overall winner awareness
chase huge jackpots

Jackpot winner lack of publicity

Jackpot game profitability

Promotion workaround is labor-intensive

Powerball Power Play participation

Data transfer

Retail network

Lack of reporting functionality

Powerball billboard awareness 53% as of

Many games to promote
Jan ‘10

Cannot sell Jackpot games via internet
Five or more game mix with balance of

No expansion of player base
risk and reward

Shared marketing resources

Electronic updating dual jackpot signs

Flat MM sales

New back office system in place

Matchplay performance

Courier system will free sales rep time to


focus more on Jackpot games

Expanded player base
OPPORTUNITIES

THREATS
Cross-promoting family of Jackpot games

Jackpot fatigue a growing threat
giving players a range of risk, reward and

New technologies/substitute entertainment
play style
options

Systems issues

Inflation and weak national economy

Integration/alignment in Lottery

Unclear depth of national recession

Market-based approach to Web site

Saturation of Jackpot games, not much

Player connection to proceeds

Promotions module developed and ready
room to introduce new ones

in February 2012

Subscription service potential

Advance Play marketing

Game differentiation

Jackpot game education

Introduction of new Jackpot games

Sales reps freed up and encouraged to
Cannibalization of existing games by new
games instead of playership growth

Marketing resources
55
support Jackpot games
56
SCRATCH – SWOT
STRENGTHS

Scratch games give players an
WEAKNESSES

interactive, fun experience and the
Profitability, especially with Licensed
Property games
opportunity for instant winning

Fiscal support

Vendor relations/support

Licensed properties vendors not easy to

Game design

Knowledge of the product/industry

Retailer/sales support

Product mix gives players a range of risk,

STVMs – don’t sell all products
reward and play style

Sci Scan limitations

Loyal player base

200 additional STVM upgrades

Second-chance drawing expansion

Additional $ Bingo game

24-game strategy

Retail network
OPPORTUNITIES

Updated STVMs

More second-chance drawings to create
more ticket value and will encourage sell-
work with
THREATS

Scratch category is susceptible to the weak
economy

through of inventory
Licensed Properties can be expensive and
cost-prohibitive

Expanded retailer base

New Scratch contracts

Licensed Properties continue to appeal to

Dated game style
new players

Stagnant Scratch category

New advertising philosophy

Profitability

RFP for Scratch ticket suppliers

No additional price point strategy

Rules timeline may change

New play styles

New price points

Predictive ordering system with courier
delivery frees sale reps’ time to focus on
marketing support and new retailer
recruitment

Better in-store merchandising/games
display
57

Social media
58
SALES – SWOT
STRENGTHS

Experienced Corporate Account
WEAKNESSES

Specialists, Customer Service Reps and
Field Sales Force



Aging fleet of vehicles and shortage of
vehicles

Effective problem-solvers with a hands-on
Accessibility/timeliness of sales data and
reports
approach

Lack of promotion module until Q3
Motivated self-starters that work well with

Budget constraints on POS items
other sections of the Lottery

Rely too heavily on certain trade styles (e.g.
Excellent relationships with retail
grocery, convenience stores)
accounts

Use of POS in retail

Momentum with Scratch game sales

High clerk turnover

Sales rep bonus plan

System limitations hinder effective inventory

Good POS system in place with retail
management
accounts
OPPORTUNITIES
THREATS

Retailer recruitment and expansion

Profitability challenges

Full courier distribution/inventory

Vendor field service issues
management system

Retailer fraud issues
Implement sales training techniques to

Ongoing battle of Lottery image
maximize sales

New clerks constantly needing to be



Robust new back office system/predictive
retrained
ordering

Economic downturn
Courier distribution to allow for more time

Businesses going out-of-business resulting
on qualified sales calls

Creative uses of POS in retail

Better relationships to foster joint
in slow net gain of retailers
promotions

Retailer extranet provides financials
digitally to customers
59
ADVERTISING – SWOT
STRENGTHS
WEAKNESSES

Ad agency relationship entering fifth year

Strong relationships with media and
to use terminal promotions or barcode
production vendors
coupons


Extensive industry and professional


No promotion module until FY12; no ability
Budget must stretch to cover six Jackpot
Lottery staff knowledge
products throughout the year and
23 permanent jackpot outdoor billboards
communicate a wide range of jackpot
in place and mechanical paid for (no
amounts
longer under lease)

Increased marketing budget since FY09

Revitalized brand image and strong family
of games

82% favorability according to 2008 Image
Study*
–
36% strongly favor
–
27% somewhat favor
–
19% slightly favor
OPPORTUNITIES

THREATS
Cross-promotion of the Lottery’s family of

Ongoing recession
games/products

Uncertainty of how recently introduced

Tap power of Internet/digital marketing

Excitement of new Jackpot games

Election year

More consumers turning to the Internet for

Cannibalization with competing jackpots
news, information, entertainment and

Low Powerball, Mega Millions or Lotto
games will change market place
shopping

jackpot amounts threaten to affect sales
Non-traditional advertising mediums:

guerilla, mobile, social platforms
Inflation of media and production costs
reduce effective buying power

Shrinking audience for traditional media
outlets
* In 2004, overall favorable impression of the Lottery was 84%: 32% strongly favor, 38% somewhat
favor, 14% slightly favor.
Source: Image Study, The Howell Research Group
60
WEB SITE – SWOT
STRENGTHS

New website with focus on interaction
WEAKNESSES

with players


1.1 million visitsper month on average;
Fiscal limitations to implement new
technologies

Lack of understanding
7.3 average page views per month
(demographics/psychographics) of
Dedicated base – MyLottery VIP Club
MyLottery members
(200,000+ members)

Coloradolottery.com has brand equity

New CMS system – ability to edit site in-

Mobile text messages deliverability
challenges

Can’t accept payments via Internet
house

Good Web vendor with working
knowledge of current site

Good e-mail system

Timely updates

All second-chance drawings done via
Internet registration

Integration with Facebook

Offers Spanish translation of key pages

Retailer Extranet provides retailers with
relevant information
61
OPPORTUNITIES

Expand MyLottery options
–
Video streaming; viral marketing
THREATS

Growing cost of site

Technology changes and ability to stay
opportunities

–
Desktop widgets
–
Interactive promotions
–
Quizzes and surveys
abreast of them

Possibility of becoming a target for Internet
criminals

Alienating older, non-tech savvy players
Attend conferences where Internet, World

Offshore online gambling
Wide Web, e-marketing, viral marketing

Casinos online loyalty programs
and mobile media issues are being
discussed

Opportunity to gather data on players who
register for second-chance drawings

Opportunity to gather data on MyLottery
members

Sophisticated visitor tracking and analysis

Email marketing opportunities

Social media integration
62
POINT-OF-SALE – SWOT
STRENGTHS

900 dual automatic jackpot signs placed
WEAKNESSES

at retail
Poor placement of playcenters in some
stores

1,500 playcenters placed at retail

530 STVMs placed at retailers

Good support from Lottery sales reps with

No permanent exterior signage
merchandising will become better with

No Mega Millions automatic jackpot signs
courier



Strong laws prohibit outdoor banners in
many metro locations
Broad inventory of POS pieces in variety
of sizes to accommodate available space

Raise Program requirements

Redesigned, Lottery-branded POS

Special POS bonus piece

600 Powerball ticker automatic jackpot
signs
OPPORTUNITIES

Add more attention-producing features to
THREATS

playcenters such as scroll signs, back-lit
signs, LCD screens, etc.

Investigation of new playcenter designs

Secure retailer and produce exterior
obtain without paying for it

Use promotions or incentives to increase

SIPC (Strategic In-store Planning
Pay-at-pump option has caused reduction
of customers in convenience stores

Printing vendors facing economic pressures
– many going out of business
POS space or plus-selling by clerk

Lottery sales not top-of-mind for retail
owners or clerks
signage

POS space at retail increasingly difficult to

Potentially higher attention POS options
Committee) in place with new focus
(high tech) are expensive to supply to near

Paid POS
3,000 retailers

Some special corporate signage such as

Many stores remodeling with cleaner, less
7-11 clings and Bradley posters
cluttered look and in doing so POS

Retail Promotions (LnJ, King Soopers)
opportunities are being removed

Mega Millions sign extensions
63
PUBLIC RELATIONS – SWOT
STRENGTHS

Extensive industry and professional
WEAKNESSES

knowledge

Strong relationships with Great Outdoors
and projects

Colorado, State Parks, Division of Wildlife
and other proceeds recipients


Closer relationships between Media
Spotty success getting winners to agree to
speak with press

Ability to write and distribute press
releases regularly
Limited signage at proceeds-funded areas
More internal support for proceeds relations
efforts needed

Corporate responsibility program , continue
to develop
Relations and Community Relations

Increased outreach to internal audiences

Customer focus/responsive to consumers
and consumer issues

Strong writing/editing

Good idea generation

Increased exposure of Lottery in
community

Proceeds go to a cause that is supported
by citizens

More established relationships with media
outlets in Denver metro-area and
Southern Colorado

Increased exposure of Lottery in the
community – via press and via proceeds
recipients

Increased winner relations efforts

Re-launch of Speaker’s Bureau – chance
to get in front of decision makers and
influential community members
64
PUBLIC RELATIONS – SWOT CONTINUED
OPPORTUNITIES




All of the big winners throughout the year

Retailer fraud issues
give the Lottery a great story to tell

Difficult to get partners to proceeds promote
Increased visibility of signs at Lottery-
Lottery contributions to projects
funded venues

Declining proceeds as a percent of sales
Great story to tell in every community in

Economy in recession – harder to work with
Colorado
proceeds recipients because of limited staff
Proceeds Road Trips – continue building
and budget cuts
relationships with partners and recipients

THREATS

Leveraging relationships with partners
and beneficiaries to spread Lottery word
Winners reluctant to agree to speak to the
press

Shrinking media market (Rocky Mountain
at a grassroots level
News exiting market, merger between

Greater utilization of technologies
KDVR and KWGN) means there are fewer

Increased focus on customer care
places to pitch our stories

Continued relationship-building with
proceeds recipients

Continued relationship-building with
members of the media

Continued relationship-building with
winners

More proceeds contributions due to new
games

Lottery addressing declining prize payouts
65
RESEARCH – SWOT
STRENGTHS

Long standing studies provide a good
WEAKNESSES

look at year-over-year trends and
progress




Not all questions are actionable (meaning
there may be some wasted resources)

Different studies categorize audiences
Tracking study dashboard is easy to view
differently (segments categorized
and provides a very quick overview of
differently)
findings

study sources
Extensive list of strong research partners
and vendors from which to chose
Difficult to consolidate data from several

Tracking study deliverables are on different
Image study allows the Lottery to
timelines (e.g., dashboard provided for two-
understand the strengths and
month period, report is quarterly, crosstabs
weaknesses of current efforts so as to
are monthly/quarterly/etc.) – hinder ability to
leverage these learnings in future
find accurate information over specified time
messages and strategies
periods
Quarterly and annual qualitative research

allows for additional insights into
consumer motivations
Tracking study is cumbersome – too many
questions

Research is not current – the economy has
shifted since the last of many studies

Not currently aligned with sales figures to
garner additional insights

Tracking study does not currently utilize
avenues through which additional/different
targets can be reached (e.g., online, mobile
phones)

Research provides a strong demographic
profile, but the psychographic portion is
missing (e.g., motivators, media
consumptions, etc.)
66
OPPORTUNITIES

Research audit will help to identify missed
THREATS

areas of focus


Revamped annual tracking study is now
No research manager on Lottery
staff means focus may wane

Lack of comprehensive plan may create
more established and can be adjusted as
overlap or prevent the team from being able
needed
to identify gaps
Social media research is becoming more
prevalent and available for purchase;
audit to be conducted in FY10

Investigating possibility of having
Scientific Games conduct the
segmentation study may open up
research funds for other efforts

Lotto Research will provide brief, but
current segmentation information

Emerging Market study can provide
support for targeting new segments
67
CORPORATE IDENTITY
COLORADO LOTTERY POSITIONING STATEMENT
To people in Colorado who like to play games of chance, The Colorado Lottery is the brand that gives
players the chance to dream big and have a chance at winning large cash prizes for a small wager.
The Colorado Lottery offers a family of unique, fun, interactive games with a broad range of risk (odds
and price points) and reward (large cash prizes) that are easy to find, buy, play and redeem. The
brand characteristics for The Colorado Lottery are fun, play, dream, winning, luck and supporting the
great outdoors of Colorado.
THE WINNING POSITIONING FOR THE COLORADO LOTTERY
Life is short –– dream big and Don’t Forget to Play
THE COLORADO LOTTERY TAGLINE
Don’t Forget to Play
Taglines are extremely important branding tools. “Don’t Forget to Play” further differentiates the
Lottery brand, is short, memorable and will play an important part of the Lottery’s new brand image.
68
The line “Don’t Forget to Play” also reinforces three very important key messages. First, it reminds
people to have fun in life and that they should always find time to play. Second, it is a direct call to
action for people to play Lottery games. And finally, it encourages people to get out and enjoy the
great outdoors and lifestyle Colorado is famous for and that Lottery proceeds support.
THREE MEANINGS: ONE TAGLINE
Play is fun, lighthearted and a basic
human need. We are reminding
consumers to have fun and enjoy life.
From recreation centers to State Parks,
the Colorado Lottery helps everyone
enjoy the outdoors.
Keeps Lottery top of mind so
consumers are reminded to play our
family of games.
69
PRODUCT REVENUE
Total FY11 sales were $518,920,841, an increase of $17,723,432 over FY10 sales.
Scratch had record sales of 344,945,609, an increase of $16,836,868 million. The new Jackpot
games (MatchPlay and Mega Millions) introduced in late FY10 provided sales of $11,418,378 million
and $25,126,942 million, respectively. Powerball sales decreased by $31,521,621 million while Lotto
and Cash 5 also saw a decrease of $2,155,842 and $2,363,031 respectively.
FY12 REVENUE GOALS
Achieve total sales of $527.4 Million in FY12.
Scratch sales: $350 Million = Net profit $57,750,000 at 16.5%
Powerball sales: $77 Million = Net $28,875,000 at 37.5%
Mega Millions sales: $32.4 Million = Net $11,016,000,000 at 34%
Lotto sales: $38 Million = Net $12,920,000 at 34%
MatchPlay sales: $10 Million = Net $3,400,000 at 34%
Cash 5 sales: $20 Million = Net $7,000,000 at 35%
70
PRODUCT REVENUES AND CONTRIBUTIONS
Fiscal
Mega
Year
Scratch
Powerball
Millions
Lotto
Cash 5
MatchPlay
Raffle
Total
P
1983
136,920,137
0
0
0
0
0
0
136,920,137
4
1984
117,579,570
0
0
0
0
0
0
117,579,570
4
1985
105,263,444
0
0
0
0
0
0
105,263,444
3
1986
108,949,281
0
0
0
0
0
0
108,949,281
2
1987
113,297,685
0
0
0
0
0
0
113,297,685
3
1988
90,944,020
0
0
0
0
0
0
90,944,020
3
1989
61,932,292
0
0
16,972,331
0
0
0
78,904,623
1
1990
80,227,984
0
0
59,711,795
0
0
0
139,939,779
4
1991
66,876,901
0
0
118,571,408
0
0
0
185,448,309
5
1992
58,790,288
0
0
166,532,740
0
0
0
225,323,028
7
1993
117,307,110
0
0
136,638,088
0
0
0
253,945,198
7
1994
165,593,481
0
0
113,178,549
0
0
0
278,772,030
7
1995
180,919,348
0
0
163,035,920
0
0
0
343,955,268
10
1996
183,856,290
0
0
139,786,974
0
0
0
323,643,264
9
1997
212,215,028
0
0
125,941,046
16,885,837
0
0
355,041,911
9
1998
225,237,189
0
0
127,439,956
16,105,601
0
0
368,782,746
9
1999
233,937,322
0
0
119,716,980
12,068,634
0
0
365,722,936
8
2000
233,999,764
0
0
125,474,093
11,482,491
0
0
370,956,348
8
2001
249,210,219
0
0
88,940,701
12,481,748
0
0
350,632,668
7
2002
257,213,494
79,885,753
0
57,645,776
13,221,511
0
0
407,966,534
11
2003
254,255,554
75,702,315
0
48,270,758
13,245,013
0
0
391,473,640
10
2004
260,901,964
85,030,889
0
40,811,438
14,506,680
0
0
401,250,971
10
2005
282,735,729
80,912,668
0
38,266,117
15,052,268
0
0
416,966,782
10
2006
293,812,628
119,757,623
0
38,332,996
16,858,542
0
0
468,761,789
12
2007
297,112,493
101,570,695
0
39,835,761
17,407,163
0
0
455,926,112
11
2008
336,038,899
80,771,409
0
41,071,837
13,384,912
0
0
471,267,057
12
2009
328,254,471
100,733,520
0
43,552,521
20,831,732
0
0
493,372,244
11
2010
328,108,741
101,568,085
2,403,216
41,620,408
21,309,593
6,187,366
0
501,197,409
5
2011
344,945,609
70,046,464
25,126,942
39,257,377
19,153,751
11,418,378
8,972,320
518,920,841
11
Total 5,711,361,884 8,617,539,569 27,530,158 1,932,385,770 218,577,228 17,605,744
8,972,320
8,841,125,624 2,2
71
PLAYERSHIP OF LOTTERY GAMES
Scratch comprises 66%, Jackpot Games 34% of market share (sales) for all lottery products. Lottery
players include those consumers who play additional games. The Dec 09/Jan 10 Tracking Study
Venn diagram shows cross Playership among all products.
Total Scratch playership is 32%

Powerball and Scratch at 5%

Lotto and Scratch at 1%

Powerball, Lotto and Scratch at 9%

Powerball, Scratch, Lotto and Cash 5 is 7%

Scratch only at 8%
Total Powerball playership equals 39%

Powerball and Scratch at 5%

Powerball, Lotto and Scratch at 9%

Powerball, Scratch, Lotto and Cash 5 is 7%

Powerball and Lotto at 7%

Powerball only at 9%
Total Lotto playership is 29%

Powerball and Lotto at 7%

Powerball, Lotto and Scratch at 9%

Powerball, Scratch, Lotto and Cash 5 is 7%

Lotto and Scratch at 1%

Lotto only at 2%
Total Cash 5 playership is 12%

Powerball and Cash 5 at 7%

Powerball, Cash 5 and Scratch at 9%

Powerball, Scratch, Lotto and Cash 5 is 7%

Cash 5 and Scratch at 1%

Cash 5 only at 2%
72
DEMOGRAPHICS
The current target market for Lottery products includes the following profile:

-



Powerball Player Demographics
o
75% are 35 years of age or older
o
54% are 45 years of age or older
o
55% have a college degree
o
85% have at least some college or a degree
o
68% earn $40,000 and up a year
o
29% earn $76,000 and up a year
o
52% are male
Lotto demographics include older players that tend to be more loyal.
o
74% are 45 years of age or older
o
87% are 35 years of age or older
o
42% have a college degree
o
66% have at least some college or a degree
o
64% earn $40,000 and up a year
o
25% earn $76,000 and up a year
o
50/50 male/female
Cash 5 Player Demographics
o
71% are 45 years of age or older
o
93% are 35 years of age or older
o
18% have a college degree
o
34% have at least some college or a degree
o
46% earn $40,000 and up a year
o
3% earn $76,000 and up a year
o
58% are female
Scratch Demographics
o
3% earn $76,000 and up a year
o
58% are female
Mega Millions, MatchPlay and Raffle Player Demographics – Complete demographic analysis
to be provided as part of future research
73
AUDIENCES
JACKPOT TARGET SEGMENTS
The FY06 Segmentation Study identified three distinct player groups the Lottery could market
products with some anticipation of a positive return on investment. These segments, Active Fans
(segment five), Fun Seeking Realists (segment three) and Dreamers (segment two) comprise 58% of
the market and have the greatest opportunity for the Lottery in FY10. Player segments two and four
are seen as minimal revenue impact unless jackpots get very high.
Jackpot Chasers – Segment One

This segment is least aware of lottery games in Colorado.

Play Powerball/Lotto only when the jackpots are high.

Low play motivations overall; more inclined to play to support a worthy cause and the chance
to win a little bit of money.

Not dreamers, and are least comfortable with new technology.

Least aware of Colorado Lottery and what they do.

This segment has the lowest opinion of the lottery.

Lowest rating of all corporate image attributes.

Don’t see the entertainment value in lottery games.

Lowest proportion of Past 12 Months participation in any game; lowest proportion of dollars
spent in Past 12 Months on any game.

Account for 16% of Past 12 Months lottery players; account for 6% of Past 12 Months lottery
spending.

Oldest segment with a mean age of 47, most educated, 2nd highest income.
Dreamers – Segment Two

2nd highest proportion of dollars spent in Past 12 Months on any game (26%).

This segment is 4th highest in proportion of Past 12 Months participation in any game (don’t
play as frequently but spend more).

Visit casinos.

This segment is a big player of Cash 5 and Scratch.

Play Powerball/Lotto when the jackpots are high or at the last minute.

Account for 18% of Past 12 Months Lottery players; account for 26% of spending Past 12
Months on Lottery games.

This segment likes annuity games, games with some control over chances of winning.

Participate in spectator sporting events; highest participation in video games.

This segment is least likely to visit restaurants, bars or pubs.

Tied for third for Internet usage but use it mainly to download music.

This segment ranks 2nd highest for paying to download a game.

Tied for 2nd highest opinion on corporate image.
74

Feel Colorado Lottery games are marketed in a socially responsible way and the lottery is
well managed.

Even split on gender, least educated, 2nd youngest segment with a mean age of 44, lowest
income, greatest proportion of Hispanics.
Fun Seeking Realists - Segment Three

Most informed of who lottery is and what they do.

Highest proportion of Past 12 Months Players (account for 23% of Past 12 Months lottery
players).

Account for 19% of spending on any game in Past 12 Months.

Spend money on poker outside of casinos.

Also bet on horse/dog racing at off-track betting places.

Most hours spent on the Internet in a week.

Participate in outdoor activities, spectator sports, concerts, festivals and movies.

This segment has the highest participation in frequenting restaurants, bars and pubs.

Motivated to participate to win a little bit of money, for entertainment or fun and to support
worthy causes.

Tied with Active Fans for highest favorability of state lottery.

See the Lottery as an appropriate way to raise revenue. Feel it is up to the individual to
control his/her gaming.

Comfortable with technology, feel people have the right to do what they want even if it could
harm them.

Tied for 2nd highest opinion on corporate image.

Skew male; second most educated, highest income, most likely to be non-Hispanic.
Dabblers - Segment Four

Dabblers are 3rd highest in proportion of Past 12 Months Players of any game (21% of Past
12 Months Players).

This segment is 4th in proportion of dollars spent on any game in the Past 12 Months
(account for 15% of spending in Past 12 Months).

Spend money on poker and black jack online.

This segment is most likely to play when jackpot is high.

Motivated to play to win a little bit of money and also they dream about winning big.

Dabblers have the second lowest opinion of the Lottery overall and rank 2nd to Jackpot
Chasers on the need for more controls on gaming.

They feel strongly that people deserve only what they have worked for, and feel that things in
their life are not as good as they used to be.

Even split on gender, second oldest segment.
Active Fans – Segment Five

This segment accounts for 34% of Past 12 Months spending.

This segment accounts for 22% of Past 12 Months Players.
75

2nd most aware of Colorado’s Lottery games and informed of who Lottery is and what they
do.

This segment is more likely to spend on higher price point Scratch.

Motivated to win a little bit of money, for entertainment or fun and to feel lucky.

Enjoy playing Scratch games.

Participate in outdoor activities; go to plays, concerts and movies.

Participate in a variety of other forms of gaming (although in low levels).

This segment is 2nd highest for hours spent online in a week.

See the lottery as an appropriate way to raise revenue, innocent form of entertainment and
fun to play even if they don’t win.

Comfortable with new technology, enjoy a challenge, believe in fate and that life should be
enjoyed without the worry of the future.

This segment has the highest opinion of corporate image.

Skew female, youngest segment with a mean age of 39, well educated, 2nd lowest income.
SCRATCH TARGET SEGMENTS
A sub-set of the Segmentation Study called Scratch Player Segments was developed to help the
Colorado Lottery identify revenue opportunities for those residents who predominately play Scratch
Games. These segments identified as Scratch Enthusiasts (segment one), Quick Action Scratchers
(segment two) and Scratch Dabblers (segment three) provide a greater understanding of Lottery
Scratch Players.
Scratch Enthusiasts – Segment One

Highest proportion of spending, 2nd highest percentage of players (account for 32% of past
year scratch players and 53% of Scratch spending).

Segment most aware of Scratch games in Colorado.

Purchase all price points of Scratch tickets, more likely than other segments to purchase $10
tickets.

Have a positive opinion of corporate image.

Like many characteristics of Scratch tickets, especially price and games with a top prize of
$100k or more.

Likes play style with multiple games or play areas.

Prefer Scratch tickets that take longer to play, more so than other segments.

Purchase Scratch tickets on impulse and wait until later to scratch them. Like to scratch the
ticket slowly.

Motivations for play include: the chance to win a little money, for entertainment/fun, to support
worthy causes, so they can dream about winning big.

Believe it is up the individual to control his/her own gambling.

Feel comfortable with new technologies.
76

Life should be enjoyed now with little worry for future.

Believe in fate and daydream of winning big.

This segment spends the most hours online per week (mean = 10.1) downloading music.

Skews female, youngest segment with a mean age of 42.1, least educated and lowest
income.
Quick Action Scratchers – Segment Two

47% past year Scratch players; account for 33% of Scratch spending.

This segment has the 2nd highest proportion of spending.

Spend less money than other segments at casinos.

Like play styles of matching your numbers to others on the ticket, also like a game with a
bonus multiplier.

Prefer Scratch tickets that are fast to play.

Believe it is up to the individual to control his/her own gambling, lowest percentage agreeing
that more controls are needed for where and when people can play lottery games.

Motivated by the chance to win a little bit of money, to support worthy causes and for
entertainment and fun.

This segment is comfortable with new technology.

Life should be enjoyed today with little worry for future.

Believe in fate; think people deserve only what they’ve worked for.

This segment is the most likely to have purchased a product or service directly online.

Skews female, mean age of 48.4, most educated, tied with Scratch Dabblers for highest
income.
Scratch Dabblers – Segment Three

20% of past year Scratch players; 14% of spending.

Spend money betting on live horse/dog racing both at the track and at off-track locations.

Not as likely as other segments to spend money playing poker or black jack online.

Price is the attribute most considered when purchasing Scratch tickets.

Prefer Scratch tickets that are fast to play.

Likes play styles with multiple games or play areas on one ticket, and match your numbers to
others on the ticket.

Prefer to win cash, not fond of winning prizes other than cash.

Not likely to go to spectator sports or participate in other live entertainment such as concerts
or plays.

Not as comfortable with new technologies as other segments.

Spend 2nd most time online (mean= 7.6 hours/week).

Fairly even gender split, oldest segment with a mean age of 49.3, tied with Quick Action
Scratchers for highest income; well-educated.
77
RESEARCH
Research for the Lottery will come from two sources in FY2012. First Scratch research will primarily
reside within the Scratch Contract for Goods and Services with Scientific Games, Inc. Additionally
the marketing budget provides additional resources for Tracking/ Playership and Segmentation
studies. In August 2011 The Research intelligence Group was awarded the Tracking/Playership and
Segmentation projects. Responsibility for research decisions lies with a six person committee
consisting of Lottery and Cactus personnel. Research projects will be implemented based on the
goals and objectives outlined in the Marketing Plan and strategic needs as defined by the
organization.
ADVERTISING AWARENESS & PLAYERSHIP TRACKING - JULY-JUNE 2010
METHODOLOGY:
The annual Advertising Awareness and Playership Tracking study was a continuation of the
improvements that were made in FY09 as part of the revamped tracking study that was the result of a
thorough investigation of the possible strategies and available options. The Tracking Study was
conducted monthly among 200+ adult residents of Colorado, ages 18 and older, to measure trends in
advertising awareness and playership. Random telephone surveys were completed using cell phone
as well as land-line service to improve sampling representation and data quality.
Every two months the customized section of the survey is updated to track recent advertising or
marketing techniques, market/environment conditions or new product preference.
KEY FINDINGS:
Figures based on FY09 cumulative report. Will be updated when FY10 cumulative report is complete
in September 2010

The first quarterly findings report that Overall ad recall for the quarter (56%) was supported
by recall of 61% during the January benchmark. In the April/May study this recall rebounded
again to 62%.

Total ad recall was highest within the 55 to 54 year age group and among these individuals
living in moderate-income households.

Those with college degrees or post-graduate are will above average in Lottery ad awareness.

Ad awareness was significantly below average among younger adults, seniors 65+ and those
with high school education or less.

Scratch games and messages about jackpots or winnings are the images and messages
recalled most often.

A large majority or respondents are aware of Powerball billboards.

Powerball’s radio advertising is recalled by a relatively small percentage of Coloradoans.
78

Only 23% if Coloradoans have never played a Colorado Lottery game before.

The incidence of Cash 5 playership lags far behind all other Lottery games.

Compared to the 77% of Coloradoans who have “ever played” any Colorado Lottery game,
56% have played within the last 12 months.

The highest incidence levels of past 12 month Lottery play are among consumers with
incomes $35-75K, age 45-54, and those having some college education.

Past 12 month Lottery playership is lowest among Coloradoans 65 and older, many of whom
have fixed or limited income.

Powerball’s much higher incidence of play within the prior 12 months was supported by
jackpot amounts of over $200 million in March ($276M) and September ($207M).

Cash 5 lags behind in past 12 month playership

Past 12 month playership:
o
Total Powerball – 38%
o
Powerball only – 13%
o
Powerball and Lotto – 9%
o
Powerball, Lotto and Scratch – 11%
o
Total Lotto – 25%
o
Lotto only – 3%
o
Lotto and Scratch – 2%
o
Total Scratch – 30%
o
Scratch only – 12%
o
Powerball and Scratch – 5%

Within the past 30 days a total of 39% of Coloradoans played any Lottery game.

Powerball is leading the Colorado Lottery game played in the prior 30 days.

A larger portion of players report spending less money on the Lottery overall in the prior 30
days.

The average game spend in the prior 30 days:
o
Powerball – nearly $25
o
Lotto – $20
o
Cash 5 – just over $20

The average Scratch player spent more on Scratch than any other game.

84% of Scratch players buy multiple tickets at each purchase.

Results show that $5 is a very typical amount spent on Scratch tickets for each purchase

A very large majority of Coloradoans are in favor of the Lottery
o
34% strongly in favor
o
27% somewhat in favor
o
14% slightly in favor
o
11% neutral
o
12% opposed
79

Coloradoans support the Lottery because proceeds benefit the state and they like having
jackpots available with chances to win; and the Lottery helps raise money for the state.

The Colorado Lottery is widely known for the proceeds supporting State Parks and open
space.

Only a small percentage of individuals are aware of community projects funded in the past by
the Lottery.

Retail locations are the most common place where jackpot players look for winning numbers.
LOTTO ENHANCEMENT STUDY – JUNE 2010
METHODOLOGY:
As a continuation to the New Jackpot games research that was conducted in FY09, a Lotto
enhancement study was created to identify possible changes that could be made to the current Lotto
product. The study was comprised of two phases. The first was a qualitative, online bulletin board
study to gather input and feedback on the various Lotto enhancements being considered. The
bulletin board was held over three days and consisted of 96 participants. Of the 8 Lotto
enhancements tested (including the current Lotto game), 7 options were featured in the quantitative
portion (phase two) of the study. Phase two was a 25-minute strategy and stake exercise conducted
among 1,479 individuals (908 panel participants and 571 MyLottery participants) in order to determine
sales potential and identify cannibalization to current games. Each game that was of interest in
phase one was presented to respondents via Flash in one of five cells.
KEY FINDINGS
Qualitative:

Overall
o
Overall, participants prefer the fun/excitement of the Lotto Extra multiplier wheel.

Current Lotto players prefer Extra, Lotto Ball, Instant and Kicker (in order),
primarily for the added chances to win big.

Lapsed Lotto players prefer Extra, Lotto, Instant and Kicker. They like new
ways to win and more ways to win at least something. They give more lip
service to supporting Colorado.
o
Key drivers are fun/excitement, perceived chance of winning, ‘big enough’ jackpots
and something new to play that’s ‘different enough’ from current games.

Several participants would play every newly released game for awhile at
least.

$1 and $2 price points impact game preferences as well as anticipated
frequency of play. Participants compare ticket price to chances of winning
80
even small prizes. The $2 ticket price may interfere with spontaneity, fun,
excitement; it gives players pause.
o

Bigger jackpots will overcome some resistance to $2 ticket prices.
Lotto Extra
o
Lotto Extra multiplier, stacked to higher payouts, is more fun/exciting. They like the
suspense, the new twist, and having the choice to play the multiplier.
o
It offers the best of Powerball, with better odds plus benefits for Colorado.
o
Most say instructions, prizes are straightforward.
o
A few women are initially unclear about jackpot exclusion from multiplier; need to pick
extra numbers; and how the wheel works before watching the draw.
o

Suggestions: higher payouts, merchandise prizes, color-coded multipliers.
Lotto Kicker
o
Lotto Kicker is exciting/fun and gives players a chance to hit twice. Participants
appreciate having the choice to add the Kicker.

o
Others say it lacks excitement, odds are too long and it feels like separate games.
o
Some find it confusing until they play, and may not understand if they won.
o
Suggestions: bigger payouts, shorter Kicker and pick own Kicker.
Lotto Instant
o
Instantly winning is exciting, and $1 is the right price.
o
But for some, winning a free ticket is not thrilling like winning money.
o
Suggestions: better payouts and $1 winner instead of free ticket.
o
Some participants are unclear on whether the free ticket is a quick pick. There is
lingering confusion about how the game works, when they’d get the free ticket, how it
affects their original ticket and how to track it.

Colorado Lotto
o
It may not generate the level of excitement of some new games, but many intend to
continue playing Lotto. It’s an ‘old friend’ that’s still a good game… a fun, low-cost
way to hope and ‘dream big.’
o
Many justify playing Lotto as a way to support a better Colorado. This is raised more
often by lapsed than current player participants.
o
Several participants play Lotto less and Powerball more. Powerball has higher
jackpots, and some claim more success with Powerball than Lotto.
o

Suggestions: higher payouts on 3, 4 and 5 matches, payouts hitting more often.
Lotto Ball
o
Just like Powerball but for Colorado,’ Lotto Ball has less appeal overall than either
Lotto or Powerball. Powerball has more appealing payouts.
o
Current G3 players rank Lotto Ball second best. More payment options improve the
odds of winning something -- and it costs just $1.
o
Instructions are clear; repetition will help.
81
o
Suggestions: bigger mid-range payouts; more winners than Powerball; offer multiplier
option for another $1; they want to know the odds.

Big Lotto Ball
o
Big Lotto Ball appeals because it’s new/exciting, there are more payment options and
a good range of prizes, and it is state-based.

o
The $2 cost and similarity to Powerball work against this game.
o
Participants say instructions; prizes are simple and easy to understand.
o
Suggestions: $1 price, higher payouts, payout for matching the ball.
Lotto Play
o
Very few participants ranked Lotto Play in their Top 3. Its minimal prize increase is
not enough to bring excitement to playing.
o
Lotto Play is too similar to Lotto -- not different enough to add fun or increase
anticipated frequency of playing.

o
Instructions, prizes are straightforward; the game is simple to understand.
o
Suggestions: bigger payouts; payouts for 2 matches; offer this or Lotto, not both.
Lucky Lotto
o
Just 2 participants ranked Lucky Lotto in the Top 3. It doesn’t seem new, is ‘lackluster,’ isn’t different enough from Lotto, plus it costs more.
o
While payouts for 5 of 6 and 3 of 6 matches are higher, this is not enough to
overcome the $2 price or generate excitement -- or it is overlooked.
o
Instructions are clear to most participants.
o
Suggestions: bigger payouts; $1 or a multiplier to justify $2.
Quantitative:

Key FIndings:
o
At a Total Respondent level, none of the four new Lotto game concept games
produced an increase in overall spend for the Colorado Lottery’s range of games,
over and above the current range of Colorado games.
o
In terms of the Total Respondents level, Lotto Instant (15.8) is the game that would
stimulate the highest spend among the four individual new concepts.
o
In terms of the MyLottery sample, Lotto Instant (21.2) would provide the highest
individual game spend among the four new concepts.
o
However, when looking at just the Colorado Lottery ‘MyLottery’ player’s overall
Lottery spend, Lotto Kicker is the only concept that would significantly increase total
spend on CO Lottery’s range of games.
o
o
Lotto Kicker also increased overall spend among Female respondents and was the
clear choice of Hispanic respondents when it came down to the choice question (42%
v 22% for Lotto Instant in 2nd place).
82
o
Lotto Kicker and Lotto Instant would significantly increase total spend on CO Lottery’s
range of games among the 55+ year old age range, but Lotto Instant (18.1) is the
game that would provoke the highest new spend among the four new concepts in this
age group.
o
Lotto Instant scores highest of all four concepts for ‘Clarity of Instructions’, ‘Ease of
Play’, ‘Name of the Game’, ‘Appeal’, ‘Chance of Winning’ (tied with Lotto Ball) and
‘Likelihood to Play in the Future’.
o
Lotto Ball had similar metric scores to Lotto Instant throughout the study, but failed to
increase overall spend significantly among any sub-group or in total.
o
Lotto Extra proved an unsuccessful concept, and actually encouraged a decrease in
overall Lottery spend across Total, General Population and MyLottery sample
frames.
o
Lotto Extra also saw the lowest individual game spend among the four concept
games.
o
When examining the ‘choice’ tie-breaker, Lotto Instant (29%) edged out Lotto Kicker
(28%), but there was no definitive winner.
o
However, Lotto Kicker appeared to polarize respondents, with 33% claiming it was
their least favorite game.

Recommendations:
o
TRiG recommends that the Colorado Lottery tread very carefully with potential plans
to alter the current Colorado Lotto game.
o
With the recent introductions of both MatchPlay and Mega Millions the market
appears saturated with drawing games, and the player base has yet to adjust fully.
Mega Millions playership within this piece of research has spend at similar levels to
MatchPlay.
o
TRiG recommends that only Lotto Instant be looked at in the short-term as a potential
change to the Lotto game.
o
The polarization of Lotto Kicker as a concept seems to negate some of the positives
we have seen within the study, with the most surprising aspect being the final ‘choice’
appeal among the Hispanic market.
o
This perhaps could lend itself to further investigation.
o
Lotto Ball appears to be too similar to both Powerball and Mega Millions to have any
true value in the marketplace. Lotto Extra failed to generate any real support, mainly
due to its poor performance in terms of ‘chance of winning’.
83
POINT-OF-SALE PROGRAM
Since its inception the Lottery has used unpaid point-of-sale to help promote games, features and
jackpots. The retail environment continues to be extremely important for the success of The
Colorado Lottery business. The Colorado Lottery has five primary types of POS advertising including:

Playcenter – a freestanding kiosk that provides a valuable in-store footprint and allows for
material storage, message display and an area for players to scratch their tickets, fill-out
their playslip or learn about Lottery games and proceeds contributions.

Point of sale / Point of purchase (POS/POP) – refer to the areas within the retail area, but
do not include the Lottery’s playcenter. This includes register displays, parking lot and
external signage, and window displays.

Scratch Ticket Vending Machines – vending machines stocked with Scratch tickets used
at approximately 800 locations.

Jackpot Signs

Paid POS
POS strategy will be developed at quarterly POS summit meetings involving product and sales
department staff. Assessment of needs, what works, what doesn’t work, inventory levels and
distribution will be part of those meetings. Ongoing POS design and production will be the
responsibility of the advertising and product managers with as needed input from sales and corporate
account staff. The POS plan-o-gram and Rep Rap will be used to communicate change-out
information to sales reps.
PLAYCENTER
Description:
Blue, stand-alone unit where information is stored.
Rationale:
The playcenter continues to be the primary in-store information center for
Lottery product/game messaging at no charge.

Topper- Don’t Forget to Play permanent branding piece on top of the
playcenter

Header- General Lottery games permanent piece that is adhered to
the top of the playcenter

Featured Game Insert- 17”x11” game-specific printed piece below
the header

URL strip- Brand strip below the brochure rack with
www.coloradolottery.com web site address.

Writing surface- Highlights featured Scratch games and lists Scratch
games in market by price point and upcoming Scratch games.
These are replaced every 4-6 weeks based on new game launches
and games currently in market.
84

Poster back- Double-sided Don’t Forget to Play brand piece that
includes brand messaging on one side and games on the other. The
poster appears on the back of the playcenter and provides additional
advertising when the playcenter is placed up against a window or in
an open area.

Door decal- Non-removable adhesive Colorado Lottery circle decal
on the front door serves as a brand identifier within the retail
environment.
AT THE REGISTERDescription:
POS that appears at the point of purchase.
Rationale:
Materials at the point of sale/purchase area remind consumers to play
the games of the Colorado Lottery. The majority of Lottery games
purchases are impulse buys, therefore a continued presence at the
register is important to increasing sales utilizing quick, readable
messages and converting the consumer in purchase mode.

Door decal- Non-removable adhesive Colorado Lottery circle decal
on the front door serves as a brand identifier within the retail
environment.

Terminals (Extrema and SciScans)- Digital messaging for consumers
who are checking out.

CDU Surround- Printed POS with jackpot game messaging to spur
impulse purchases.

In-Counter strip- Printed piece that is placed inside the counter at the
point of purchase and includes featured Scratch game messaging.

Register topper- Printed piece that is placed on top of the register
and includes featured Scratch game messaging.

Penny trays- Trays with Lottery logo on the bottom that hold pennies
and winning number reports for customers.

3-tiered manual jackpot signs- Small counter signage that
communicates the jackpot amounts for all three Jackpot games.

Ticket Checker, sticker and dangler- POS materials that direct
consumers to the terminal to check winning numbers.

On-counter wire brochure rack- Small brochure rack with 4
placeholders for playslips, how to play information and Lottery
brochures. Racks are featured in stores without a Playcenter.

Scratch ticket dispensers- Displays printed Scratch cards in the
counter to help customers purchase Scratch tickets. Cards are
organized by price point in the case.
85
SCRATCH TICKET VENDING MACHINE
Description:
The Scratch Ticket Vending Machine is placed in select retail locations
and allows customers to conveniently purchase their own Scratch tickets.
Rationale:
The STVM continues to be a convenient way for consumers to purchase
Lottery tickets and reminds people to play as they are checking out of the
store. There is an opportunity to make Jackpot games available for sale
on the STVM as well, further promoting the brand, encouraging
crossover play and offering additional convenience.

STVM Header- Rectangle printed vinyl that is inserted into the
lighted portion of the STVM. The messaging includes a call to
action, “Buy Scratch tickets here,” and is designed around the “Don’t
Forget to Play” brand look and feel.

STVM Slot card- A vinyl-printed piece with coloradolottery.com
printed on it placed above the slot on the machine and offers
consumers a resource for finding more information on the Lottery.

Wobblers- Non-adhesive printed pieces that are adhered to the
STVM. Wobblers advertise featured Scratch games.

Signage- Retail locations display various signage free of charge that
advertise the Lottery brand, products/games and jackpot amounts.

2-tiered automatic update window signs- New digital signs that will
automatically update Lotto and Powerball jackpot numbers to be
displayed in the windows and at customer service within retail
locations.

Don’t Forget to Play Door decals- New “Don’t Forget to Play” window
decals were launched in March 2008 to reflect the new brand tag
line. Door decals are two sizes for retail locations to display on
designated doors/windows. An alternative adhesive is being
investigated for testing prior to the launch of the new design in
January 2010 to ensure that decals stick no matter what the
conditions.

Don’t Forget to Play/games window posters- New Don’t Forget to
Play window posters were launched in May 2008 with the re-design
of the playcenter. Window posters are two-sided for dual messaging
–“Don’t Forget to Play” and names of all Lottery games.

Powerball jackpot lighted window signs- Digital signs that are
currently displayed in windows of retail locations. Signs update
automatically via satellite; the Lottery is currently investigating
opportunities to update the signs to include Lotto and a simple,
automatic updating system.
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
Powerball/Lotto jackpot lighted in-store and window signs- Digital
signs featuring both Powerball and Lotto and that update directly off
the Extrema terminal. Both window and in-store version were
created to provide optimal readability.

Pump toppers- POS materials that advertise a featured Scratch
game at the gas pump prompting people to go inside and purchase.

Lucky Store AdLight Sign-in-store lighted signs to advertise
Powerball and Lotto Lucky Stores

Lucky Store Metal Tacker sign- Embossed metal sign for retailers
that advertises Cash 5 and Scratch top prize sold.

Lucky Store Poster- in-store poster to advertise general Lottery top
prize winner.

Retail Checks- Large and small-sized checks to advertise winners
sold in retail location.

Brochures- Brochures include playslips, Play Smart, Proceeds, how
to play flyers, game overviews and Power Play brochure. These are
organized in the brochure racks in the playcenter and in wire brochure
racks in stores without a playcenter.
o Game specific playslips- Pre-printed forms where consumers
can fill in their numbers. There are playslips for Cash 5,
Powerball and Lotto. Playslips are slated to be revised with the
new brand identity.
o Game specific how to play flyers- Printed brochures that explain
how to play each of the Jackpot games. There are English and
Spanish versions available. Cash 5 and Lotto are being updated
with the “Don’t Forget to Play” brand. Powerball will be updated
after the matrix change.
o Play Smart- Two-sided brochure slip to support the Play
Smart/Play Responsibly communications campaign that provides
information and resource on problem gambling.
o Proceeds-Tri-fold brochure to inform consumers of Lottery
proceeds contributions throughout the state – broken up into
counties, featuring photos from 5-6 proceeds projects. The
brochure was recently reprinted; a revised version will be
included with new brand identity launch in January 2009.
o Game overview Brochure- Create a brochure that incorporates
all of the Lottery games and provides an education component to
engage non-players and encourage crossover play.
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