Lotteries are eager to reach younger audiences. Studies have shown that the average age for draw players is 55 and 45 for scratch players. So lotteries are using experimental marketing techniques to attract those elusive millennial players.

Modern marketing starts with psychographic segmentation studies. Psychographic segmentation is a method used to group customers by their shared personality traits, attitudes, lifestyles and other factors. When lotteries understand both their intended audience’s demographics and psychographics, the combination of both sets of data starts to form the potential players’ persona.

Just understanding a potential audience is not enough, however. Traditional marketing isn’t effective on millennials. According to one study conducted by McCarthy Group, 84% of millennials stated that they did not like or trust traditional marketing.

The Texas Lottery, Loto-Québec and OLG have used their segmentation studies to employ modern marketing techniques. The lotteries believe that by associating with the hobbies their perspective players enjoy, players will develop a positive impression of lottery. They have created music concerts, supported growing communities and partnered with entertainment companies in an effort to attract new players.

The Texas Lottery launched a concert series. It used big data to find and hire musicians and social media to extend the concerts’ reach. “The challenge is budgetary restrictions versus how many people are you reaching. Scale can be an issue, but strong digital elements can dramatically increase the reach of each event with the help of live-streaming and shareable content,” said Texas Lottery’s Andrew Leeper.

Loto-Québec helped grow the local eSports/video game industry. It focused on building on building a genuine long-term relationship with the player, abandoning the hard selling techniques to be more client-centric. “Acceptance comes through authenticity. It is not easy. Their sense of community is strong. It is hard to get in but if you do, then they will consider you because the trust is there,” said Loto-Québec’s Nathalie Rajotte.

OLG partnered with Corus Entertainment to be part of a popular TV show, Big Brother Canada. “Partnerships should play a key role in our overall marketing strategies for a number of reasons. As the boundaries of our business begin to blur with the grey market and entertainment sectors, the need for brand and product relevance is at an all-time high. Partners allow us to move quickly in areas we don’t necessarily exceed, extend our reach in new channels, and can improve our brand equity with new markets,” said OLG’s Luke Stilin.

These forward-thinking lotteries are using consumer-centric strategies to attract players instead of more traditional product centric strategy. Adopting such a strategy requires rethinking how to approach and how to evaluate the success of a marketing campaign. “At the end of the day if you want to be client-centric, you need to have some employees who are really willing to get acquainted with the group and market you are aiming at. We’ve always said, ‘think outside the box.’ Well, the ‘box’ is our building and we really should get out of it,” Rajotte said.

The reduced focus on selling product to develop long-term relationships has a significant cost. It is also difficult to quantify the return. This makes it a difficult bill to foot. But many lotteries emphasize the short-term success of the business too much, assuming long-term problems will solve themselves. This is a dangerous approach. Lotteries must learn to balance its long-term health with its short-term success.

“There is the idea that consumers will find the lottery once they settle down, when they get into their 40s. While that’s true for some people, if we’re not relevant and don’t become a part of their consideration set early on, odds are that lottery product will never be considered. You can’t take it for granted that lottery will be in that consideration set. You must earn it every day,” Leeper concluded.

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Texas Lottery’s Concert Series

Since 2017, the Texas Lottery ad budget has been cut almost in half. As a result, the Texas Lottery has lowered its traditional media budget spend—even cutting TV marketing completely—and has looked to lower cost-experimental opportunities to increase local communities’ awareness and interest in the lottery. Using psychographic data, the Texas Lottery identified Texas consumers that may be more open to Lottery. (Psychographic segmentation is a method used to group customers by their shared personality traits, attitudes, lifestyles and other factors.)

“We looked at people that get out of the house to attend live music and sporting events,” said Andrew Leeper, Brand Strategy Coordinator for the Texas Lottery. “These psychographic profiles line up with people that are more likely to be interested in playing lottery.”

The lottery called this group “Experience Seekers” and wanted to figure out better ways to interact with them. Knowing that one key motivator for this group is live music, the Texas Lottery tested various ways to tap into this potential player group’s passion. In 2017, they partnered with large entertainment partners like LiveNation in Houston. While the partnerships were well-received, the lottery felt like it could do better. “We didn’t want to just be a tenant at a venue with our logo on a wall. We wanted to create our own event, so that the lottery is woven into the fabric of the event itself,” Leeper said.

So the Texas Lottery created its own music concert series. From pairing the perfect bands and venues with each market to promoting the concerts, there were a lot of moving parts. While this would be difficult to do, the Lottery would be part of every detail of the show, no matter how small. Even the name of the series, Luck Happens, tied the event back to the Lottery.

To mitigate costs, the series would feature up-and-coming “buzz” bands rather than premium arena artists. This lowered costs and allowed the Lottery to make the concerts free for all attendees. The concept balances itself quite well. Lesser-known bands might appeal to a smaller group of people, but a free concert appeals to everyone. If the lottery could pick an up-and-coming “buzz” band, then they would maximize their reach.

“Teaming up with buzz bands is a great intersection that allows for cost efficiency and greater grass roots excitement where fans are going to share their experiences. They are really almost ambassadors for the band, and it has a halo effect that helps the Lottery,” Leeper said.

These ambassadors are more likely to share their experience on social media, extending the reach of the concert even further. “A lot of times, people who are interested in seeing ‘buzz’ bands happen to be taste makers and early social influencers,” Leeper added.

The lottery turned to TuneIn, an audio streaming technology company like Spotify or Apple Music. TuneIn also helps book artists for live events. By using big data to track millions of artists, TuneIn was able to comb through and see trending “buzz” bands in each market. TuneIn then worked directly with the lottery to build the ideal lineup for each market. “We could use their analytics to see what bands were up and coming based on listenership in that area. You need to get the band that everyone is talking about. I think we really did that with the Luck Happens concert series,” Leeper noted.

In preparation for the concert, the Texas Lottery used many of their learnings from previous concerts they had sponsored. They had photo booths, posters and special VIP experiences that people were going to talk about, like surprise artist meet and greets. The VIP experience encapsulated the spirit of the lottery. Texas Lottery staff walked through the line of attendees prior to the concert. A fan would be picked out at random and win Luck Happens VIP passes. As a VIP, they would get to meet the artist, and watch the show from the very front row in the Luck Happens VIP section. After they were chosen, they were asked to provide a random number. Whatever number they chose, the team would go that many people down the line and award the next Luck Happens VIP passes. “They got to pass the luck on,” Leeper said.

The lottery also wanted to create a memento for people who attended the event. Well-known poster artists created unique collectible posters for each show that tied the artist to that city.

The lottery also partnered with TuneIn to create a streaming radio station called “Rock Your Luck.” The radio station not only served up the hottest new artists but also broadcasted the Luck Happens concerts live. Additionally, the lottery interviewed each artists about their lucky breaks and created an unique, engaging podcast called “Lucky Break.”

“The challenge with experiential marketing efforts can be budgetary restrictions versus how many people are you reaching. We had strong digital elements so even people who weren’t at the event could livestream it, and there was just a ton of buzz around each event,” Leeper explained.

The first concert was so successful that the lottery organized three more concerts in Texas in 2019. This different approach to marketing to the music community required a lot of effort. But it may be a much more effective way to showcase the Texas Lottery to a younger, perspective audience, because the event encapsulates everything the lottery is. “That is why we offered fans a special free concert. We wanted to emphasize that it was their lucky night,” Leeper concluded. “We tried to keep these brand engagements as consumer friendly as possible to really help us introduce lottery to people who wouldn’t play it. We want to make the lottery as fun and approachable as possible so we can bring in the next generation of lottery players.”

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Loto-Québec and eSports

Loto-Québec’s plan to drive future revenue growth and profits to good causes is to move from a product-centric strategy to a client-centric strategy. Rather than using traditional marketing, the lottery is trying to integrate themselves into the lives of these players by supporting their hobbies. Loto-Québec hopes this strategy will create a mutually beneficial relationship and entrench itself in the burgeoning local communities.

“Because we are operating casino, lottery, VLTs, restaurants and spas, we’ve always tended to see ourselves as really an entertainment industry actor. Our core is not just about gambling. It is about all forms of gaming and play. If we can get closer to those proximity markets that are also in the gaming sphere—by which I mean playing and having fun—then our forms of gaming may get integrated into the market as well,” Nathalie Rajotte, Corporate Director, Strategy, Innovation & Business Intelligence, Loto-Québec, said.

Loto-Québec is fostering a relationship with various communities amongst the eSports and video games ecosystem. eSports is a form of competition where professional gamers play against one another in a video game competition. In 2019, the total Canadian audience for these events grew to over 454 million viewers, a group that is predominately male and under the age of 35.

The lottery was careful not to come across as a company only trying to sell a product. “When we presented ourselves at the very beginning to the gamers’ community, we approached them just saying that we were curious about their journey as we are a lover of gaming of all kinds,” Rajotte said.

The lottery began interviewing various members of the community to understand who they were. “If you want to take a client-centric approach, then you need to understand their world, but at a human level. When we went out there, it wasn’t ‘let’s make them aware we are there.’ It was like ‘How can we contribute to their passion?’”

Loto-Quebec learned about gamers’ language and thinking, particularly how opposed they were to corporate culture. This reinforced the belief that traditional marketing to this audience would not be successful. eSports enthusiasts are passionate about their hobby/profession, and they want to see the same level of passion from the companies they interact with. “If you want to relate to them, you have to talk the same language. And if you’re not really a passionate gamer, well the conversation is not going to be very long, sustainable or durable,” Rajotte said.

The biggest thing that arose from these conversations was the problems the community faced, which provided an opportunity for the lottery to help it. For instance, Quebec eSports players could not participate in some tournaments outside of Quebec due to an erroneous understanding of Quebec’s regulations by those organizations. The biggest tournaments happen everywhere in the world, so this was preventing a lot of future Quebec eSport professionals from turning into international stars.

The lottery helped solve the problem by contacting the Régie des Alcools, des Courses et des Jeux (RACJ) and getting an official interpretation of the regulation confirming there was no valid reason to exclude Quebec esports players. They were successful in their efforts. Loto-Québec also helped support the community in other ways. Twitch is a platform that allows for live streaming eSports and video gaming content. People stream themselves playing. Many “streamers” struggle with attracting larger audiences. Some big streamers, like Ninja, can have millions of viewers, while smaller streamers may have difficulty attracting even a few people. “The Face of the Internet” was an initiative started by Loto-Québec to help local French speaking streamers.

In April 2019, over 60 streamers registered to “The Face” and 12 participants were to enter this competition. Loto-Québec selected the final six and then began to support them by giving them additional publicity and equipment to improve the quality of their stream.“We helped promote local talent and showed them how to improve their Twitch-streaming skills,” Rajotte said. “We made ourselves available to them at all times in order them to support them.”

Loto-Québec also supported local independent (“indie”) video game developers. At Comiccon de Montreal, the lottery sponsors a booth called “Indie Game Zone” where small developers can showcase their games to the public. At the 2019 Comiccon, the lottery supported over 25 companies.

The relationship is still in its early phases. The effects of their efforts aren’t resulting in huge increases to the bottom line, but that’s not the intention. “You cannot push it too fast. It is like a love affair. It needs to develop over time,” Rajotte explained. “They are very generous once they know it is a genuine interest. We have a lot to offer each other.”

The goal eventually will be to encourage eSport players to try the land-based casinos, sports betting (particularly eSports betting) and various online iGames. However, by learning from the video game community, the lottery will also improve their own assets, like their website. “There is a lot of crossover between eSports players and casino poker players. The conversation is a real possibility,” Rajotte ended. “eSports is not a product, it’s an audience, the question is how do we develop our relationship and our offer along with this new crowd!”

“If you want to be client-centric, you need to have some employees who are really willing to get acquainted with the target group and the market you are aiming at. We’ve always said, ‘think outside the box.’ Well, the ‘box’ is our building and we really should get out of it,” Rajotte said.

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OLG & Big Brother Canada

Ontario Lottery & Gaming (OLG) and Corus Entertainment have embarked on an innovative partnership in support of the $5 Big Brother Canada instant ticket. The unique partnership spans all Big Brother Canada Season 7 platforms and touchpoints.

OLG is trying to reach adult players under the age of 35 (u35). It is a difficult task as the underlying elements of hope, dream, and escapism that are core elements in lottery tickets are not attractive to younger players. “Customer research has shown us that this current value proposition is not strong enough to win over a younger player who desires a much more fulfilling game. This is not to say u35’s have zero desire to dream of a new life, but it does show us the underlying play experience needs to be enhanced,” Luke Stilin, Director, CX Innovation, OLG, said.

OLG is trying to increase the entertainment experience players have by aligning themselves with partners in the entertainment industry, notably Corus Entertainment. Corus is Canada’s largest mass media company. “Our objective was to co-create with professionals from within the entertainment world in order to build better value propositions for the lottery player while increasing our reach to the consumer,” Stilin said.

OLG worked with Big Brother Canada, a popular television reality show, that Corus Entertainment along with Insight TV produces. In the show, contestants or “HouseGuests” live in a custom-built home that is under constant video surveillance. Audience members watch the contestants try to live with each other while they compete in weekly events for a large cash prize.

The Big Brother Canada show was a perfect fit for OLG to integrate into. The show’s demographics skew u35, which aligned to OLG’s player growth strategy. Secondly, the show has strong parallels with the lottery business as it includes a life-changing prize of $100,000 for the winner. “Finally, it was the different elements of play within the show that are aligned with our aspirations of gaming entertainment, which include skill, strategy, competitive games, and always a bit of luck,” Stilin said, referring to the challenges which contestants face weekly.

OLG sponsored one episode in the season. The challenges for the episode had lottery themes. There was a custom, in-show Power of Veto Challenge where HouseGuests scratched a life-sized $5 Big Brother Canada ticket, spun The Big $pin wheel, and played giant versions of Big Brother Bingo and Crossword tickets.

“With the trend of second screening and commercial fast forwarding these days, it can be difficult to create awareness through traditional advertising. What made this campaign different was that we were actually integrated within the television show,” Stilin explained. “For almost 30 minutes on prime time television, contestants competed in life-size lottery games centered around some of OLG’s most popular products.”

OLG released a Big Brother Canada instant ticket at the same time the episode aired. Aligning the release of the ticket with airing the episode was a challenge due to time it took to print the tickets. However, the two teams were able to make it happen.

The instant ticket achieved more than C$13.3 million in sales and had a 86.4% sell through. The television show netted 2.5 million viewers in total, with 1.1 million viewers aged 25-34. It was the number one program in its time slot. “The ticket has engaged the u35 target audience and demonstrates the power of targeted partnerships,” said Stilin.

The campaign did have a higher investment level in both dollars and time. “We all agree it paid off. From contract negotiations and printing schedules to marketing programs and even the show’s competition design, our team came together and pulled off an incredible program. We are also fortunate to have strong leadership at OLG, specifically our Director of Instants, Carleen Cameron, and our VP of Marketing, Randy Weyersberg. These two leaders supported the team from ideation to launch for a concept which was first of its kind in market,” Stilin said.

What made this strategy work so well is the aligned interests of both Corus Entertainment and OLG. The entertainment industry is also experiencing a major shift in customer behaviors. u35’s are “cutting the cord” and watching more online videos than traditional television. “A key strategy going into this partnership was to ensure a win-win idea, something that both Corus and OLG would benefit from. I think this was critical to our success. For the Big Brother ticket, Corus was able to gain awareness of their show through 3 million ticket facings across Ontario in our 10,000 retail locations,” Stilin concluded. “For OLG, we were able to attach ourselves to a major entertainment brand with a u35 market while gaining mass media exposure on prime-time television. Understanding that both companies were working together for a common goal made for a collaborative and open culture between our organizations, which I’m confident will continue to deliver more innovation.”