Measuring Change Our investment in monitoring trends • ILR Jack Poll • Over 1,000 consumers every month • Over 5,000 lottery players surveyed this year alone 1,200+ Joes 4,000+ Jacks Qualitative Research • Retailerin-depth interviews • In-store observations / ethnography • Focus groups
ILR Media Slide 25 ILR Jack Update Newsletters since October 2005 • Published more than 20 articles of actionable data for the industry Interviewed for numerous national and local newspapers, radio & TV stations
Playerbase • ILR developed the Joe and Jack classification to bring greater clarity to the definition of a “Lottery Player” for the Industry Joe Jack Plays 5 Times As Often As Jack Spends Roughly The Sameas Joe When He Does Play The question is, how do we get more Jacks to play?
Playerbase Joes (22%) Jacks (78%)
Growth Potential • In a hypothetical large population state, getting just 5% of Jacks to play Mega Millions or Powerball at $5 a week (average spend) could generate an additional $90M in sales each year while getting 5% of Joes to spend $5 more a week only generates an additional $27M $90M $27M $0M $20M $40M $60M $80M $100M
Trend Over Last 3 Decades • Last major recession in the U.S. in the late 70’s • Gas lines • 17% interest rates
Income Levels *Not asked in Q206
The Optimism Gap Expect Household Finances Next Year to be Better / Worse 29% 8%
So What Do We Know About Younger Generations and What the Future Holds? By 2010 Gen Y will outnumberBaby Boomers….96% of them have joined a social networking site Newspaper circulation is down 7 million, while unique readers online are up 30 million By 2010 Gen Y will outnumberBaby Boomers….96% of them have joined a social network Generation Y and Z consider e-mail passé… How many years does it take to reach 50 million users?Radio (38 Years)TV (13 Years)Internet (4 Years)iPod (3 Years) Facebook 100M users (>9 months)iPhone apps: 1B downloads(9 months) Newspaper circulation is down 7 million, while unique readers online are up 30 million More than1.5 million pieces of content areshared on Facebook…daily More video was uploaded to YouTube in the last 2 months than if ABC, CBS and NBC had been airing content 24/7/365 since 1948 • Americans have access to • 1 Trillionweb pages • 65,000 iPhone Apps • 10,500 radio stations • 5,500 magazines • 200+ cable stations More than1.5 million pieces of content areshared on Facebook…daily Generation Y and Milennialsconsideremail passé… How many years does it take to reach 50 million users? More video was uploaded to YouTube in the last 2 months than if ABC, CBS and NBC had been airing content 24/7/365 since 1948
Instant Tickets Preferred by Age(Source: Oklahoma Lottery Game Plan Studies) Older Adults 35 + Young Adults 18-34
The “Millennial Generation” is Satisfied with Less Income SOURCE: National Poll, April 2009 (N =1,000) and Millennials Survey, April 2009 (N = 400)
“Millennials” Place Greater Value on Corporate Responsibility SOURCE: National Poll, April 2009 (N =1,000) and Millennials Survey, April 2009 (N = 400)
“Millennials” Feel Less Affected by Financial Crisis SOURCE: National Poll, April 2009 (N =1,000) and Millennials Survey, April 2009 (N = 400)
Making Research Actionable: What Does This All Mean for Lottery Brands?
Is Your Brand Relevant to aNew Generation of Players? Is it even understood?
Younger Consumers Are Brand Conscious • Despite their willingness to get by on less, brands do make a difference… for the young as well as the older consumers. 69% 68% 64% SOURCE: LJS / Retailing Today Annual Top Brands Study
But Some Brands Do a Better JobWith Younger Consumers * ( ) Percent with any brand preference
Measuring Lottery Brand Strength - PRODUCT • All brands must deliver on product benefits. For lotteries… • Instant/online/multi-state • Games that I like to play • Games are fun to play (not dull or boring) • Games are easy to play • Available where I want them • Money put to good use • Supports our schools
Are We Delivering? *Based on a 9 point scale with 9 being “agree completely” and 1 “disagree completely.”
Measuring Brand Strength - PERSONA • Brands must also have a persona or “style” that resonates with consumers… • Someone like me • Outgoing • Funny • Spirited • Caring • Smart • Friendly • Modern • Does your brand persona have a distinct character? • Consumers, (particularly younger consumers) like to do business with brands that share similar traits and values.
Do Consumers “Like” the Persona We Project? *Based on a 9 point scale with 9 being “agree completely” and 1 “disagree completely.”
Measuring Brand Strength – SPACE/PLACE • Your State? • Local Neighborhood? • School? • The Future (Your Future)? • Virtual? All lotteries are “local” brands in space / place and that connection is vital to our brand promise.
Space / Place - Example More than 1 in 3 are off-track –and this is even true for Joe, our core player. Do You Know How Lottery Proceeds are Used in Your State? 37%
Is the Situation Improving?For Younger Consumers, it May Be. 37% 29% 26% 34% 24% 43% 40% 42% 45% 52% 24% 37%
Observations and Implications Observation Implications The bulk of our sales and profits come from a small group of Joes who have been hit hard by the economy • Focus efforts beyond core players, especially during these times. Try to engage Jacks and new players who are open to our messages. • Getting just 5% of Jacks to play more generates three times as much as getting 5% Joes. • Are our products and messaging “Joe-centric”? • What does Jack think about us today? • What do we WANT him to think about us?
Observations and Implications Observation Implications • Roughly 1 in 10 adults are actually playing the lottery MORE in this recession. Initial observations suggest that they are: • Younger • More optimistic Young adults are THE primary opportunity for lotteries, especially in this economy. Older players have less disposable income and are cutting back even more. Have you thought about how our product, persona and place resonate with these younger players? Are we where they are with the kinds of games, prizes and messages they are looking for and trust? Do they even notice us? Do they believe we share their values? It’s not enough to just be on Facebook
Observations and Implications Observation Implications Most young adults we talked with were introduced to the lottery through a family member. Holiday is the one time families come together to play the lottery. This level of intergenerational gift giving and young adult purchasing happens only once a year. What is our holiday strategy? It must go beyond developing a few “cool” tickets for the younger folks. How do we try to reach younger adults and tap into the strong emotions surrounding our brands during this crucial time? How can we use holiday as an opportunity to capture their interest in us and consider us throughout the rest of the year?
Change is Inevitable – and Already Happening “All things must change to something new, something strange." - Henry Wadsworth Longfellow