FY23 Marketing Plan PPT.pdf

May 2021

FY23 Marketing Plan Guide Hig h Le ve l St ra t e g ie s , In s ig h t s , Sa le s Tre n d s , Ke y In it ia t ive s a n d Co n s id e ra t io n s

Commercial Summary (1)

● Total sales are forecast to end the financial year at approximately $580m and net proceeds at approximately $98.5m both significantly ahead of budget ($508.7m sales, $88.6m net proceeds)

● Total sales to week 45 are currently 6.8% down (Draw sales -3.6%, Instants -7.4%)

● Budgeted sales are currently +14.1% (Draw sales +17.2%, Instants +13.5%

● Powerball sales have been strong (+17.5% year on year) driven by the new Monday draw and two significant jackpot roll series ending in October 2021 and January 2022

● Mega Millions ( -36.2% YOY) and NSJ ( -24.7% YOY) have suffered through a lack of significant jackpot roll series throughout the year

● Multi -state game Lucky For Life (+85.6% YOY) has been transformed by changing to being drawn seven days a week (from two days a week)

● Numbers games Cash 3 (+4.8% YOY) and Cash 4 (+0.8%) have been resilient and will set a new record sales year vs FY21

● Fast Play ( -1.7% YOY) has once again been resilient in its rapid draw game positioning

FY22 has seen the second highest year for sales and net proceeds in the Lottery’s history

Commercial Summary (2)

● Instant sales are 83% of the ASL’s total sales and while currently -7.4% YOY they will end FY22 with their second highest ever sales year

● Lower price point games $1, $2, $3 and $5 have seen a far greater sales decline this year vs FY21 than $10 and $20 games

● $5 games (24%) have the greatest volume of ticket sales followed by $10, $1, $3, $2 then $20

● 64% of total Instants sales are sold by $10 and $20 games

Instants have had another strong year when compared to pre -Covid sales levels (pre -March 2020)

High Level Strategies

1. Financial: Achieve the sales and net proceeds budget while targeting an 18% return on sales to proceeds

2. Marketing: Provide compelling reasons to play our games. Allocate funds in line with game profitability. Maximize the impact of big jackpots

3. Digital : Enhance the digital offer to build more engaging relationships with players.

Improve the digital footprint in retail and prepare for the launch of iLottery (subject to legislature approval)

4. Brand: Build a trusted brand with universal appeal for Arkansas consumers and stakeholders

5. Games: Launch a new exciting Lotto game in Arkansas. Maximize large jackpots on multi -state draw games, while delivering appealing Instants games across all price points

6. Retail: Focus on better access, category presentation and make playing the Lottery more convenient and enjoyable. Deliver through enhanced retail execution

FY23 plans are built on six commercial areas or ‘pillars’. These underpin sales and marketing activities, designed to create brand demand and deliver strong sustainable growth:

ASL – Moving 52 week sales Total sales peaked in Jan 2022 at $640m. The objective now is to flatten the downward trend line before growing it once again

Financial

Financial

● Greater focus across the business on managing the bottom line (proceeds) as well as driving the top line (sales)

● Tailor all commercial activities to getting the best return on investment

● Focus resources on working as efficiently as possible

Achieve sales and net proceeds budget while targeting an 18% return on sales to proceeds

Marketing & Brand

Key Initiatives for FY23 (1)

● Achieve net proceeds budget of $91.45 million

● Achieve full year draw sales: $94.86 million

● Achieve full year instants sales: $440.50 million

● Launch LOTTO in Arkansas

- Annual sales $20m+

- Pre - launch and Launch campaign

- PR campaign

- Always on campaign

- High jackpot support

- Draw event, Live or available draw stream

● Agree jackpot thresholds for Powerball, Mega Millions, NSJ and Lotto

Key Initiatives for FY23 (2)

● In line with our ‘This is Winning’ campaign look at ways to better communicate local messaging and improve on low tier prize promotion

● Develop Play, Scratch, Win Instants campaign

● Continue to build trust and integrity through beneficiary and win belief

● Utilize data analytics and develop the ASL App

Marketing & Brand (1)

● Lotto launch planned for September 2022. The biggest new draw game since the ASL’s inception. Targeted annual sales of $20m+

● Maximize the impact of big jackpots ($400m+) for Powerball, Mega Millions and ($300k+) NSJ

● Secondary support for Cash 3, Cash 4 and Lucky For Life

● Ensure marketing (and retail) plans are integrated through the line and consistent across all player touch -points

● Optimize budget, media mix and creative effectiveness in line with agency expertise

Provide compelling reasons to play our games. Big pre -launch, launch and on -going support for new Lotto. Further enhance Play, Scratch, Win. Support big jackpots

Marketing & Brand (2)

● Use the ‘This Is Winning’ message to reinforce the benefits Arkansans get from their Lottery

● Use the new Play, Scratch and Win message and “killer facts” to enhance the Instants brand and win belief

● Continue to link to Scholarships as a strong reason to play and the difference to people’s lives the Lottery is making

● Continue to enhance win belief through a consistent winner awareness program. Be creative in winner communications – frequency of winners, lucky areas, lucky stores, what can you buy with the winnings etc.

● Continue to monitor the integrity of the Brand through bi -annual consumer tracker research

● Maintain a focus on Responsible Gambling (now in the Implementation Phase)

Build a trusted brand with universal appeal for Arkansas consumers and stakeholders

Digital

Digital

● Develop richer business and player understanding through data analysis

● Utilize insights through player data to drive brand, game and channel decision making

● Develop a digital program of activities to strengthen player interactions

● Enhance the Players’ Club or “Player app” for future digital engagement

● Introduce engaging ways to play, pay and claim prizes through “Player app”

Enhance the digital offer to build more engaging relationships with players. Transform the lottery’s social media presence

Key Insights

● The macro -economic shift towards Digital Retail has only accelerated since the COVID pandemic

● Leveraging the Players’ Club dataset can drive increased understanding of players and personalized communications

● Competitors e.g. sports / gaming are breaking into these markets and are expected to be billion dollar digital platforms in a few years

● Where Lotteries have introduced digital iLottery platforms they have managed to grow the channel alongside traditional bricks and mortar retailers

● The ASL through use of the existing registered Players Club may be able to fast track the platform to maturity generating significant revenue

● Responsible gaming across iLottery drives trust with regulators and players. Trust enables ASL to innovate and drive sustainable returns

Games

Games

● Launch Lotto in Arkansas – The big game

● Develop a roadmap for enhancement to existing draw games

● Continue with the monthly Instants launch program

● Increase category profitability through a greater focus on $5 games

Deliver exciting, profitable games with clearly defined consumer propositions.

Become less reliant on multi -state draw games by introducing a new in -state jackpot game exclusive to Arkansas. Continue to launch exciting Instants games

Latest Consumer Tracker Key Findings

Research summary / considerations

● Continue to use the strength of the Scholarship message as a driver of brand trust and integrity

● Increase focus on communicating the amount raised for Scholarships every day, week, month even minute. For example is there an opportunity for an “online counter” showing live time amount raised?

● Maximize win belief throughout the year – real winners, lucky stores, lucky counties, campaign

● Increase newspaper, “ newsdigital ” and newscast communications – news is the number one vehicle where people hear about winners

● Maximize the impact and value from our media mix

● Continue to grow our social media presence including through influencers

The ASL brand has gone from strength to strength with progress made across all key consumer tracker metrics

FY22 Sales performance

Sales summary / considerations

● A successful Lotto launch in September / October 2022 is critical. Followed by a compelling always on campaign and a plan for large jackpot support

● We need to maximize the impact of big (and then huge) jackpots for PB, MMs and NSJ when they occur (even if during Lotto launch)

● Instants account for 83% of total sales but 60% of net proceeds. We need to use Play, Scratch, Win campaign to drive participation at more profitable price points such as $5

● Secondary games such as Cash 3, Cash 4 and L4L should be considered for bursts of activity especially via digital and social

● Is there an opportunity to use digital and social to communicate the Fast Play Progressive Jackpot live time?

Sales have remained strong since 2020 driven by higher price point Instants games, new draw days for PB and L4L plus growth in the Numbers games