Maryland State Lottery Agency

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Maryland State Lottery Agency

Montgomery Park Business Center
1800 Washington Blvd., Ste. 330
Baltimore, Maryland 21230
USA
Telephone: (410) 230-8800
Fax: (410) 230-8800
Web site: www.mdlottery.com

CASH IN HAND CAMPAIGN

OVERVIEW

As the Maryland Lottery, run by the Maryland State Lottery Agency, entered its 25th year in 1998, it found itself struggling. After the lottery first began in 1973, sales and popularity grew rapidly. By the mid-1990s, however, players had begun to lose interest, and they seemed inclined to hold out for enormous jackpots rather than play regularly. Despite new games and promotional efforts, the Maryland Lottery suffered from a 7 percent decline in ticket sales between 1996 and 1997. To turn around the ailing lottery, which had become the state government's third-largest source of revenue, a new director was brought on board, new games were introduced, and a new advertising agency, Eisner & Associates, Inc., was hired in 1997. In addition, Maryland's governor, Parris N. Glendening, proposed adding $2 million to the lottery's advertising budget for 1998, raising it to $13.7 million.

The lottery's new director, Buddy Roogow, explained to the Baltimore Sun that the lottery agency would adopt a new strategy for attracting customers and would stress the amusement aspect of playing the lottery over the possibility of becoming rich. Roogow stated, "We're fighting for the entertainment dollar." Eisner & Associates created the "Cash in Hand" campaign, which introduced a new game launched in early 1998. It was one of several promotions for various Maryland Lottery products. In keeping with Roogow's mission, the two television spots developed for the campaign were entertaining and humorous. They featured animated characters attempting to explain the basic concept of the Cash in Hand game—that the top prize of $500,000 was awarded in one lump sum, "all at once," rather than in annual allotments. The amusing spots aired on major network affiliates and cable channels during prime-time viewing hours.

The "Cash in Hand" campaign played a major role in reviving the fortunes of the Maryland Lottery, which, despite increased competition from Powerball and other multistate jackpots, was able to increase revenues in 1998. The campaign also received recognition from the advertising industry.

HISTORICAL CONTEXT

Citizens took to heart the Maryland Lottery's marketing slogan of the 1970s, "You've Gotta Play to Win!," making the lottery an instant success. When a daily game was introduced in 1976 to accompany the weekly drawing, lottery sales increased almost fivefold during the following two years. Annual sales of the daily game, Pick 3, reached a high point in 1985 at nearly $475 million. Proceeds from lottery sales went into the state's general fund and helped support such government services and programs as education, human resources, and public health. And as the third-largest revenue source for the state, after income and sales taxes, the state grew accustomed to and dependent upon the income.

The days of lottery fever, however, inevitably began to dwindle. In the mid-1990s the Maryland Lottery faced growing competition from ever-increasing casinos and other forms of gambling and gaming as well as from lotteries that cropped up in neighboring states and regions. As reported by Maryland's Department of Fiscal Services, lottery sales through April 20, 1997, were off by $56.5 million compared to the previous fiscal year. To boost sales, lottery director Roogow implemented an aggressive new strategy to renew enthusiasm and inject energy into the lottery. Roogow not only altered the prize rules of some games to enable more players to win smaller prizes, but he also developed cooperative business partnerships with private companies to transform losing lottery tickets into coupons and introduced several new games, including Cash in Hand. The agency also joined forces with several other states in 1996 to offer the Big Game, a jackpot game.

The Maryland Lottery, Roogow believed, also needed a change in image to generate interest, and the most effective means of accomplishing this was through advertising. To that end the lottery broke with its agency since 1982, Trahan, Burden & Charles Inc., and granted Baltimore-based Eisner & Associates a three-year contract. Roogow planned to do away with traditional lottery ads that showed mansions and fur coats and other luxuries. "We want to portray excitement," Roogow told the Baltimore Sun, "… and move away from the dreams and fantasies of other campaigns … Those images of mansions promote unrealism to people." With an increase in the advertising budget of 16 percent in 1998, Roogow hoped to promote the many products offered by the Maryland Lottery, rather than focusing on jackpot games, and to create an atmosphere of fun.

TARGET MARKET

The Maryland Lottery hoped to attract new players as well as those who had abandoned lottery games because of disinterest or for gaming alternatives, such as casino gambling. The agency also intended to lure players living in nearby communities, such as the Washington, D.C., area. Roogow told the Washington Post, "One of the important thrusts of new advertising money is to try to improve our presence in the Maryland suburbs of Washington … We believe that we can and should be able to do better there." In addition to more advertising, Roogow believed that offering more "winning experiences," albeit smaller prizes, would also attract additional players, as studies had demonstrated that one of the reasons people stopped playing lottery games was because they did not win.

Although Roogow claimed that the Maryland Lottery did not direct its marketing toward a particular demographic group, reports indicated that those who played heavily and regularly tended to come from lower-income brackets. An annual survey conducted for the Maryland Lottery by Market Facts, Inc., found that in 1997, of heavy players (those spending at least $10 per week), nearly half did not hold a high school diploma, about half earned less than $20,000 a year, and more than 60 percent were of African-American descent. The study also noted that the state's players were "more likely to be male, less educated and more downscale" than nonplayers. Although the actual market for lottery products could be quantified, Roogow insisted in the Washington Post, "We do not try to appeal to a specific group of people."

IT COULD BE YOU … BUT IT PROBABLY WON'T

Buddy Roogow, director of the Maryland State Lottery Agency, was vocal and blunt about the remote chances of winning large jackpots and had a slogan of his own—"It could be you … but it probably won't." "It's not fair to give the implication that it's easy to win $1 million," Roogow told the Wall Street Journal. "There's a one in seven million chance to win the jackpot in the Lotto game. That's why we emphasize the fun of playing. A government body has to be socially responsible." To encourage people to play more frequently, Roogow shifted the Maryland Lottery's efforts toward instant-win games and scratch-off tickets, offering more players more chances to win.

COMPETITION

Lotteries were illegal from 1894 to 1964, but by the late 1990s more than 35 U.S. states offered state-run lotteries. Between 1970 and 1996, according to the Atlantic Economic Journal, lottery sales rose from $49.2 million to $34 billion, producing net revenues of $34 billion in 1996. With the possibility of such profits, it was no surprise that the Maryland Lottery found itself facing strong competition from neighboring states and communities, particularly Washington, D.C., and Virginia. The District of Columbia's lottery, which began in 1982, presented a threat to Maryland particularly between 1992 and 1995, when sales grew 57 percent, but beginning in 1996 its sales began to drop. Still, in 1996, according to La Fleur's 1996 World Lottery Almanac, the District of Columbia was the third-ranked state lottery in terms of per capita sales, while the Maryland Lottery was ranked eighth. And though the Virginia lottery, which started in 1988, made it only to number 19 on the list, it advertised aggressively and had a well-known marketing character known as Lady Luck.

Not only did the Maryland Lottery face competition from other lotteries, but it also struggled against those opposed to gaming. Economist Peter Reuter of the University of Maryland said to the Journal Record, "This is a large, terribly regressive tax on a service sold by a state monopoly." The prolottery contingent maintained that the lottery benefited the community by providing funds for education and other civic services and that playing the lottery was voluntary, but its arguments often fell flat. The University of Maryland's Julian Simon told the Fort Worth Star-Telegram, "The states do not simply offer their product to the public. They promote hard. Lottery advertisements are beguilingly seductive, and misleading to boot." And consumer activist Ralph Nader commented in the Washington Post, "The whole thing is unseemly, for the state to encourage gambling."

MARKETING STRATEGY

The "Cash in Hand" campaign, launched in early 1998, consisted of two television spots as well as some radio and point-of-sale promotions. The television commercials ran during such popular prime-time programs as ER and NYPD Blue. Eisner creative director Bill Mitchell discussed the concept behind the Claymation commercials in Adweek and said, "The key concept for this product is that if you match seven numbers between one and thirty-one, you win all the cash, all at one time." The agency's research had demonstrated that most people wanted to receive their prize money all at once rather than in increments. "We were looking for a simple, endearing and demonstrative way to communicate this message," Mitchell explained. Mitchell stated that he and writer Brian Kelley had come up with the idea behind the campaign while eating in a restaurant. "Surrounding us were all these great containers full of ketchup, sugar, oatmeal and syrup that could be used to demonstrate a lot pouring out—all at one time," Mitchell explained.

One of the spots, entitled "Diner," featured two male Claymation characters seated at a counter with large plates filled with breakfast foods. The brunet male put his newspaper down and said, "Imagine getting half-a-million dollars all at once." The blond male then asked, "All at once? What do you mean?" The brunet replied, "You know, all at once," and then, to demonstrate, he emptied an entire container of sugar into the blond's coffee cup. "Oh, I see. So this isn't all at once," the blond replied, putting some ketchup on the brunette's eggs, "but this is all at once." He then squeezed the ketchup bottle so that the entire contents squirted up into the air and landed on the brunet's head. The interplay continued, with the brunet placing a whole bowl of oatmeal in the blond's lower lip. The blond then picked up a meringue pie, ready to demonstrate "all at once" in the brunet's face. As the Cash in Hand logo appeared on the screen, the voice-over said, "Play Cash in Hand from the Maryland Lottery. It pays you half-a-million dollars all at once. Just like that." The spot then cut back to the Claymation characters, the blond still holding the pie. A third character walking by the counter overheard the two males and asked, "All at once? What do you mean?" To which the eyes of the two mischievous males grew wide.

The second spot, "Missed It," was also set at the diner counter and also starred two male Claymation characters. A heavyset character told his neighbor, "If my numbers win, I get half-a-million all at once." The thinner male, seated before a large salad, asked, "All at once?" The first male then attempted to demonstrate the concept by placing an entire baked potato in his mouth. The thin character was momentarily distracted, however, and looked away while the feat was being accomplished. When he turned back, he prompted the heavyset male, "Go ahead." The male then swallowed his steak all at once, but the thin man was once again looking away. At the end of the spot the heavyset male had a stack of empty plates in front of him, but his neighbor still had not seen him consume anything "all at once."

Aside from the creative success of the "Cash in Hand" campaign, Eisner made a fundamental change to the Maryland Lottery brand. Instead of focusing on the promise of riches, as embodied by the tagline from previous campaigns, "It Could Be You," the Maryland Lottery now emphasized the fun of playing lottery games, reflected by the new tagline: "Let Yourself Play." Not only was it a more honest approach, since the odds of winning remained low, but it also gave consumers "permission" to play lottery games even when they knew it was in many respects a poor investment.

OUTCOME

Thanks in part to clever and entertaining marketing, the Maryland Lottery enjoyed a stellar 1998. While other states were placing increased efforts on multistate jackpots such as Powerball, rather than investing in their own lotteries, the Maryland agency chose to advance its state lottery products. Although state lotteries that were not part of Powerball experienced about a 5 percent decrease in revenue in 1998, Maryland's lottery sales rose 3 percent, to $1.07 billion. And for the fiscal year ending June 30, 1998, Maryland gained profits of more than $400 million, a record and an increase of 2 percent over the previous year. Gross ticket sales grew 2.8 percent, reaching nearly $1.1 billion. The Maryland Lottery reported that more than $367.6 million was deposited into the state's general fund and that more than $566.1 million, 53 percent of gross sales, went toward prize monies. Cash in Hand players, for example, received a total of $5.8 million in prizes.

The "Cash in Hand" campaign succeeded in launching the Cash in Hand game, which proved popular enough to be offered until September 2002. The campaign was also recognized with a number of awards, including a Clio for "Diner" and recognition from the New York Festival's 41st Annual Television Advertising Awards. Moreover, Eisner continued to create winning campaigns, as well as products, for the Maryland Lottery. A television spot created for the "Pumpkin Chunkin" campaign was honored with the Best of Show award at the 27th Annual Best in Baltimore ADDY Awards in 2001. Every year that Eisner held the account, the Maryland Lottery increased sales and exceeded goals. The ad agency also succeeded in repositioning the lottery brand. Marketing surveys showed steady increases in important measures, in particular when respondents were asked if they agreed with the statement "the games are fun even if you don't win." After five years the Maryland Lottery account was put into review in 2002 as mandated by law, but no one was surprised when Eisner retained the business. "I believe they've done an outstanding job in the five years they've had the contract," Buddy Roogow, director of the Maryland State Lottery Agency, told the Baltimore Sun. "I'm very excited about the direction we've been going and where we're going in the future."