CALIF. LOTTERY APPROVES BBDO ACCOUNT WIN

San Francisco Shop Begins Work on May 1

By Published on .

SACRAMENTO, Calif. (AdAge.com) -- By unanimous vote, the three-member California Lottery Commission today approved Omnicom Group's BBDO West of San Francisco as the winner of its $100 million, four-year advertising contract.

The vote, during a morning session held

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in the "Jackpot Room" of the Commission's headquarters here, appears to have finally ended an extraordinarily lengthy and acrimonious account review process that began in 2001.

Praised bid package
The Commission praised BBDO's bid package as the best of all it had received and said it "significantly exceeded" the criteria set forth in the Lottery's request for proposals. The Commission said it was particularly impressed by BBDO's demonstration of its "unique and in-depth" understanding of Lotto players.

Commissioner Stacy Marks made reference to the past troubles and asked BBDO West's CEO, Tom Hollerbach, if he thought the latest round of the review had been a good process. From the audience, Mr. Hollerbach laughed and said it was a "perfect" process.

Ms. Marks acknowledged that the Commission had struggled with some "flaws" in the past but she pointed out that "we have corrected them." She said the fact that none of the losing bidders had filed a protest "said it all" this time.

Grey incumbency over
BBDO's wins ends Grey's seven-year incumbency as the Lottery's agency. In all, during the four years the contract was in review, almost a dozen agencies participated in the searches. Two Lottery directors and a state governor came and went during the course of the protracted process.

Three agencies -- Grey, BBDO sibling DDB Worldwide and Interpublic Group of Cos.' Foote Cone & Belding -- tried for the account all three times it was in review. BBDO nailed the account on its first try.

Russel Wohlwerth, a principal at Select Resources International, an agency review consultant, called the Lottery review the "poster boy for bad reviews" and said it had become the "laughing stock" of the private sector. Marketers considering reviews tell him, "I don't want another California Lottery," Mr. Wohlwerth said.

'An exercise in survival'
Mr. Wohlwerth said the review became "an exercise in survival," which awarded the account to "the last man standing, the one who could outlast this ridiculous process." He noted, however, that the Lottery was not solely at fault. "The agencies clearly had a hand in making it a bigger deal than it had to be," he said.

The saga began in 2001, at a time when West Coast agencies were reeling from the dot-com bust. West Coast branches of major national agencies, in particular, had the added burden of growing profits while being barred from many new-business opportunities due to conflicts with their New York headquarters' offices, leaving them with slim pickings from local accounts. DDB, in Los Angeles, had some added pressure: sibling shops in New York and Chicago won their respective state's lottery accounts. Headquarters was very interested in a lottery trifecta with a win in California.

Protests and retaliations
That looked likely when the Lottery named DDB the "apparent successful bidder," the term used until an agency wins the commission's approval. But Grey protested the decision, on the grounds that DDB did not disclose ownership of media buying arm OMD. DDB retaliated by pointing out that Grey, too, failed to meet ownership disclosure requirements. And so began the protracted review.

The Lottery issued a second request for proposal, or RFP. This time, FCB San Francisco, was named the apparent successful bidder. DDB challenged the win, contesting FCB's proposed low media-buying costs by FCB's media arm, Initiative Media. After the dust settled on that protest, FCB got tripped up; the agency, in a now notorious misstep, faxed copies of its proposals to Lottery headquarters instead of hand-delivering hard copies as required.

The Lottery then handed the account to FCB sibling McCann-Erickson, Los Angeles.

After agency executives filed a flurry of documents with state officials, including one charging collusion between two agency contenders, the Lottery called for a third review.

Avoiding past mistakes
The Lottery, hoping to avoid past mistakes, consulted with a number of advertising industry experts, including the regional president of the American Association of Advertising Agencies. Public meetings were scheduled so agencies could ask questions and the Lottery even took the unusual step of issuing a "draft" RFP.

Finally, last month BBDO was named the apparent successful bidder, but the drama didn't end there. The Commission, regularly at four members, was down to two members and lacked a quorum. A third member was eventually appointed by California's new governor, Arnold Schwarzenegger. To keep things interesting, Lottery Director Anthony Molica resigned to return home to Washington state.

The Lottery also has had its share of non-advertising-related problems. The Lottery was sued on charges it continued to advertise and sell millions of dollars in scratch-off tickets even after the game's top prize already was won.

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