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Account Now Worth $125 Million; RFPs to Go out This Week

By Published on .

SAN FRANCISCO (AdAge.com) -- The California State Lottery has upped the ante as it reopens a review for its advertising contract.

The agency later this week will mail out request for proposals for an ad contract for $125 million over five years, up from the $100 million four-year deal it offered in a pitch earlier this year, said Jim Hasegawa, director of marketing for the lottery.

The new contract, as did the old, includes an option for an additional one-year extension.

Takes back business
The agency reopened

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the review after it took the business back from Omnicom Group's DDB Worldwide, Los Angeles, after awarding it to the agency in January following a review. Incumbent Grey Global Group's Grey Advertising, Los Angeles, the second-place finalist, protested the decision.

In March, the lottery announced it was calling for a new review after it found both DDB and Grey failed to properly disclose the names of owners of affiliated media companies that would handle the media portion of the account.

Hoping for lower fees
Mr. Hasegawa said he hoped the longer length of the contract would encourage advertising agencies pitching the business to offer their lowest possible fee structure.

"The lottery is always interested in getting the best services for the lowest possible rate," he said, declining to say whether he believed the rates agencies were charging in the previous review were too high. The new contract, he said, might "make people sharpen their pencils."

The state's request for proposal is expected to be mailed out by Thursday, and appear later on the lottery's Web site, www.calottery.com. Responses are due by May 13, with finalists named May 30 and a winner announced July 31.

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