Ep 3: Lottery For The Community
Lotteries are much more than just printing tickets and funding education.
People think lotteries exist just to print tickets and fund education. That may be correct, but Arizona Lottery offers much more for the community. They are an agency that acts like a business. They have business strategies and marketing plans because of their business mindset. This is thanks to their CEO and Executive Director, Gregg Edgar. Join Scott Harkey in this interview with Gregg on how he started in the lottery industry and brought his experience in business and politics to the table. Gregg is leading Arizona Lottery for the betterment of the community. Come and join him on his mission today.
I am super excited to welcome Gregg Edgar, a longtime friend, an overall awesome person and one of our biggest clients. A little bit about Gregg, he’s been in the agency business before which I love and has some phenomenal stories about working with former presidents and being overseas. He's a family man with seven kids of which two are adopted. I have two so I can't imagine what you deal with at home. That's insane.
We have a lot of fun. It's a crazy environment but we have a good time with it. They're all good kids and all got their own personalities.
Gregg is the Executive Director of our own Arizona Lottery which is doing over $1 billion in sales largely to Gregg's leadership. We'll get into some of the cool cost marketing things that they've been doing. I want to jump into a little bit first on your background because I'm fascinated by people who have worked in the agency business. More importantly, you worked in an agency business that was doing stuff for the White House.
When I was in college I went to Arizona State and had a Poli Sci degree because when you go into the Poli Sci you open up the brochure and it says, “You have no job.” I got out of it and gave myself six months to figure out what I was going to do next. For years, my dad had a swimming pool business.
You grew up in Phoenix.
From first grade on. A good chunk of my childhood was spent in the bottom of swimming pools in Arizona which is a little toasty. For those six months, I'm working for my dad. We're in Yuma, Arizona, building swimming pools for the Marine Corps Air Station in Yuma. It's hot. I got a call from a buddy of mine who knew the issue and he said, “I started working for this firm and we're hiring some free interns.” Being myself I said, “I can go work for free in an office that's airconditioned or I can go stay in the pool in Yuma for the next six months? I'm headed down. I'm going to go try this out.” I was with that firm for twenty years. It was six months for free but I loved every minute of it. I had no clue what public relations meant. It was a public relations firm. The word sounded great. I figured out what that meant and what that was. It was an amazing experience.
What's one story that sticks out? You and I talked a bunch about some of them. You were in Iraq with the president before.
I got to see the world. The line I always use when I talk about my former life is, “We did things that people don't get to do.” My boss at that timeframe was Gordon James. He was a longtime Bush-i as we all call ourselves and had worked for 41. He hired on with 41 in 1978 when he was running for president at that timeframe. He leased him his office space in 1978. One of the first stories in 1994 when I started with Gordon, it’s midterm election season. While I'm still a free intern, I go to Iowa with Gordon and George Herbert Walker Bush walks off of a little private plane because he's coming in to do campaigning for the midterm election. He lands in Omaha. We go right across over into Iowa and we're staying at a Best Western. It’s a good Phoenix company. Not exactly where you think you're going with a former President of the United States two years out-of-office at that point.
Before we get to the Best Western we stopped for dinner. There's a group of eight people and they're all sitting at the main table. I'm sitting at the side of the table with the Secret Service which I absolutely loved. We're sitting and eating the food. When we got to the end of the meal, Herbert Walker reaches into his back pocket, pulls out his credit card and pays for the meal. I'm thinking, “This is cool. I just got my dinner paid for by the former president of the United States.”
We go over to the hotel and it's a rural Iowa Best Western. There’s nothing fancy about it. It was under construction at that timeframe. We're all staying on the same floor. We go off to our rooms and I get on a phone call from my dad. “I'm two doors down from the former president of the United States.” I talked for a few minutes with him and hang up the phone. I hear some commotion out in the hallway. I step out into the hallway and there are a couple of Secret Service agents out there. Herbert Walker is out there with his shirt unbuttoned and his T-shirt out holding a Coors Light. He's having a great time talking with the Secret Service agents. That was the start of a political career for me that went on for twenty years. It’s an amazing experience. I got to serve W when he ran and got into office. We went to Iraq for about 5 to 6 months.
W is a good guy. I hear people that worked with him say he's awesome.
In 1999, he started running. His first fundraiser was here in Phoenix. He did it at the Ritz-Carlton and it’s a great fundraiser. He didn't come to that but he had a bunch of surrogates that came in for 41 was in for. On his first trip out, he went to California. He hit San Diego and came up to Los Angeles. I'm working in the event in Los Angeles and we're in the Central Plaza Hotel, Downtown LA right by Reagan's old offices. The presidents don't see the entrance to hotels. They're always through the back door and go by the trash cans. I'm standing in the back hallway and trying to clear some space because I know he's on his way through. I see him and I get the hallway clear. I stepped myself out of the way then he comes and walks in. He doesn't know me at this point. He walks by me and gives me a pat on the belly and says, “How are you doing big guy?” He's the type of guy he is. He’s genuine.
He probably is the last of the welfare. He is a genuine guy. He’s what you see on TV. Mrs. Bush is one of the sweetest, most wonderful people. Herbert Walker was amazing when he was with us. Originally, he passed. They’re salt of the Earth people. Through that relationship that Gordon had with that family, we were able to go around the world working for the White House, different government agencies and clients. I got to do Air Force One once. There’s a fun story on those ones too. It’s an amazing experience.
What was your takeaway from the twenty years there that you could give to somebody coming up in their career? I remember being a young, wet behind the ears person, starting in radio. I didn't know crap. What would you tell your younger self that just started?
The biggest learning that came out of it and Gordon preach this is you don't say no. You can advise a client, work with a client and give them a thought process on why they should make a decision but you don't say no and you find a way to get something done. When you look at it from the political side of things, I was in situations where you're the only person on the ground and you've got to find a way to get the job done. That's what you do.
As an agency person, the amount of creativity you have at any part of the job, you have to figure it out. We have Google but sometimes people get stuck and they don't know what to do. In the agency world, you got to figure it out. Be creative at all times every day of the week.
Don't be afraid of it because you're going to go do stuff and do some things wrong but the things you learn from what you did wrong will shape the way you go to the next place. That was probably one of the defining things for me of, “You never take an attitude of it can't be done and find a way to do it.”
I have a lot of friends in the political world. It’s similar to what I see in the agency business where there are a lot of young people and charges some important stuff. They figure it out. I can imagine the growth and the learning that's involved in that. It always amazes me because as you need to add scale to any business especially in professional service businesses, the amount of opportunity for young people to make a big difference and do some insane things that not a lot of people get to do, the learning that comes right of it. It's similar to the agency business deployment. The pay sucks.
It's terrible but you don't do it for the pay. You do it because of the adrenaline rush. Since I've had kids, I've not dived into the political world but it feels like I need a fix every time it comes around. It's such an adrenaline rush to be a part of. It takes the energy though of a young person in many respects. It takes the mentality of a young person. “I'm going to get in there. I'm going to do it.” You throw caution to the wind because you can. It was such an experience. I started with Gordon when I was 22 or 23. You had to do what you had to do to get the job done and you have to take care of the client.
Fast forward a little bit to Arizona Lottery.
It's been an amazing ride. I had been working on some projects with my wife and I was staying home with kids a little bit doing those projects at home while she was going in. She got pregnant again and I was like, “I want to switch the roles a little bit.” I went and interviewed for some other state jobs that were open so I had some friends that were working for the Ducey administration. I went and interviewed for some comms jobs to get back into that mode. I had worked with Gordon for twenty years and worked on my own. I hadn't done a job interview.
Were you nervous?
I wasn't nervous. I just didn't understand what a job interview was. I had been on the other side of it in an interview but I hadn't been the person being interviewed. I was sitting thinking about it. Before I went into these interviews, I finally said, “I'm going to be myself. I'm going to go in and be maybe direct. I would tell them what they're doing wrong and what they could do better.” I went in for these interviews and it was direct on what I felt they could be doing better and how they could be handling the communications position. It was blunt.
The interview was with the director of that agency and with Henry Darwin who was the Chief Operating Officer at that timeframe. They liked my directness and my frankness. They walked out of the meeting like, “We'll get back to you.” About a week later, they called back and said, “We're going to hire you for that gig. That's going to go a different way but we'd like you to be the lottery director.” I'm like, “Who grows up saying I'm going to be the lottery director?” I'm like, “Can I take a day to go figure it out and talk with my wife?”
I went home and did some research on what the lottery does and it was fascinating to me because there was a huge story that wasn't being told. If you went out on the corner and ask 10 people, 9 of them were going to say, “We find education.” That is true in a number of lotteries across the country but in Arizona, we have eighteen different benefits. We help foster kids going through the system and giving them advocates to be in the courtroom with them. We do a Bold Eagle program through the Heritage Fund. We help with homelessness. We do $1 million a year to fight homelessness here in the community. We do another $1 million a year to help fight internet sex trafficking. It’s what we do every year. The $900,000 goes into equipment and the $100,000 goes into victim’s rights.
How much in total goes into nonprofit programs?
About 50% of our money goes into the General Fund which is hugely important. That goes into education, roads and everything that we have going on. The rest of it goes into these other beneficiary pools. A lot of them are healthcare, children's issues and things of that nature. We did $226 million one year and over $270 million the next year. The first year after some accounting corrections, it was about $171 million.
You've almost doubled what the state gets back.
$500 million added to transfer and all built on because we have amazing people that are working hard and understand the mission. It's not just about putting tickets in the marketplace. I always say to my folks, “We don't make tickets. We make an opportunity for people to do more good in our community.” That's what we exist to do. The lottery doesn't exist without that mission and purpose. That's why it exists.
You've been such a big advocate around what specifically you're doing there. For me, as I've seen helped put the purpose and mission, first we have to sell tickets but having that not only from external communication that's window dressing but living, breathing and seeing it. It's cool.
It's the core of what we do. When I came in, we had some moral issues within the agency that we worked on were getting through. What made me passionate about taking the job was I've got an opportunity to have an impact in our community. This has been my home since first grade. I want a better community. We all want a better community to live in. Here's an agency that puts money into doing that. We've fundamentally reshaped our focus on it. We do the money that we do through our beneficiaries and through that, back to the beneficiaries. On top of that, using our marketing dollars and what we do through you guys, we used to do a lot of chicken dinners and all good stuff. I have nothing against chicken dinners. That's the bread and butter for a lot of nonprofits. I don't mean to disparage that in any way, shape or form. We wanted to get programmatic with those dollars and have more impact on what we do with those dollars.
There's such a big opportunity, I know you've used it as a case study and we've talked a little bit about it in some national pubs that have covered a little bit but not to the depth. There have been so many organizations that have a giving program that is not purpose-oriented. It’s like, “We give money here and there.” You coming in right away, fundamentally changing that giving program to make it so purpose-led and dollars going to help real things and real people. You did that several years ago and now you're hearing a lot more about cost marketing.
We want to live in a better community. If you're in a position to have an impact on that community, you've got to take that opportunity to do it. The goal of the lottery is to be here and do good. Let's find the best way and be the most impactful that we can be in how we touch that community.
I had a friend of mine on Jonathan Keyser and he had the same thing. His whole mission was, “How can I help you? How can I be a servant leader to you?” His business card is ahead on. He built his whole brokerage on this concept and wrote a book on it. What I'm learning and seeing too from a business standpoint and I wish more business people would see that the more you give, the more you get. Look at the lottery from $750 million to over $1 billion. Look at my buddy's brokerage. The more he gave to people, the more it came back to him in some way. We're in the midst of whole enlightenment going on in our world.
Generationally, we get better from generation. We know from the research that we do that the younger generations coming up have bought into this concept over this. “Millennials and Gen Z, if you aren't doing good with your dollar then we're not going to be associated with you.” I praise those generations for that line of thinking. It's crucial.
They don’t get a lot of credit but I say, “All Millennials are lazy.”
That's a shift that we're seeing. Whether you're talking about it from looking at the social justice issues in our communities, the #MeToo Movements and all those different things, they're all long overdue.
Why do you think Gen X and Boomers weren't as purpose-driven?
They’re more brand-aligned based on purpose-driven initiatives. I'm not a Shut up Boomer. You look at the pressure that was put on Boomers from the greatest generation that was in front of them. There was an unreal expectation set by that generation saving the world. They’re in the top dog position. They were amazing. If you don't go from the greatest generation to Gen Z without having the Boomers and Xs, you don't get to that piece in my mind. Look at everything that was done in the ‘60s with the Boomers in terms of changing thought processes and how we look at the world in a different way and they did great things. We could be doing a little bit more. We have a thought process at least in my case that we're waiting for that we're-the-next-step mindset. I don't think that the Millennials and Gen Z are waiting for the we're-the-next-step mindset. They've been empowered to be thinking forward.
In which processes some other issues that we've seen in terms of maybe patients from a career standpoint.
I see that all the time. They're pushing the envelope. If you look at some of the things we face in the world, we need someone pushing us a little bit on making some change. That's a good thing. I'm a firm believer. If you go back to my political career and my time with Gordon, the Bushs had that mindset of public servant that is here to do better in our community and do better for the people we serve. That's something that I've gravitated to because I learned through my career that that's the right way to do things.
We were the agency and I knew of you in the industry. What I've appreciated the most about you and you touched on it a little bit is the directness that you operate in. It is so refreshing. How come other people don't operate in that way? How did you learn that? I love when someone, even if it's good news, bad news, it’s a straight shooter, directness?
I'm going to give credit to my wife a little bit on that because she is a direct woman. She has taught me the value of directness over the years. I don't know that I was that way when I was younger. I grew up career-wise in the thought process of if you say no you aren't going to say things that don’t make people happy. I like to people-please and keep people happy. I learned both from my wife and through some of the experiences I've had in life, “In the end, you're never going to be faulted for being truthful. You're never going to be faulted as long as being earnest and trying to help improve a situation if you're being direct in a way to be constructive.” There are certain people that are direct that are just direct to be jerks and not nice to people. I think you have to be grounded in being constructive.
I probably didn't figure this out until a few years ago and it's been such a breath of fresh air. I've had to let go of some ego and be okay with maybe not people-pleasing the way I want it. The more I've seen that it's changed my world.
From my own past, the mindset of people-pleasing can lead you in a direction where you're not being honest. It can lead to more heartbreak because you're not being truthful in the situation. If you're honest then you're going to be better off. During our first meeting together around a table, I said to you, “I'm going to be frank with you. I come from the business world. Chris Rogers, who is our director of marketing, comes from the agency world. There's nothing you're going to throw over us. I'm going to be direct with you and put it on the table. I would appreciate you doing it the same way.” That's helped our relationship from a client-agency standpoint to be able to manage what we're doing.
I sometimes relate business and relationships together because there's a lot of similarities. We think that they need to be perfect all the time and there are not going to be ups and downs. There are going to be mistakes made and things that are going to happen. You're going to get upset. How you can handle conflict in a relationship is so key. That's what I've appreciated about you and Chris as well. People that have been in the agency world that go client’s side know the deal. You're not pulling BS. You can have tough conversations and manage conflict in a relationship. That's what makes a healthy relationship over the long run.
If you go into it knowing that, “I'm going to be direct to you,” when we get to a conflict point, you know I'm coming from an honest position. We can deal with the conflict and whatever that struggle is at that moment in a more effective way because there's no wool being pulled on others. There are no hidden agendas.
It's all on the table. I've seen other businesses especially in professional services or people during my career. Get the issues on the table, address them openly and have even a cadence to allow that to happen with us quarterly like a win review. “Here's what we're doing great. Let's celebrate those.” “Here's where we can have some improvement.” We didn't do that all the time. We started doing that maybe a couple of years ago.
Under the Ducey administration, we have the Arizona Management System that Governor Ducey implemented. It came out of his experience with Cold Stone and his professional experiences. For those that don't know, the Arizona Management System is built on lean principles out of Toyota production. We've all been trained in it. It has been instrumental in a lot of the changes that we've been able to make at the lottery because we empowered our frontline to be thinking about the problems that occur within our agency and to bring those problems to the forefront.
One of the trainers that we have within GTO by the name Scott Curry. He’s a great guy and storyteller. Scott has a true story. Some executives from GM came to visit a Toyota plant. They were working on a project together, the executives came and they're walking through the plant to go up to their meeting. As they're walking through they have the add-ons and people are pulling the alarms all through the whole walkthrough of the building. The frontline workers are working on the line.
Why are they pulling the alarms?
The GM guys are snickering at each other. They get up into the meeting with the Toyota execs and they said to them, “I thought you guys have this whole production thing done but you got alarms going off all over through your building. We don't have that going on in our plants.” The Toyota guys chuckled at them and they say, “You're right. You don't have alarms going off in your plant but you have the problems. We're finding them now and empowering our people to find the problems now. You're putting the car out in the marketplace and it's your customer that is finding the problem.”
That is the thought process behind the Arizona Management System and everything that Governor Ducey has done with trying to use lean principles in managing government. We're not perfect at it but we’ve employed and our team is empowered to find the problems in what we're doing and try and fix them. To your point, a big part of that is you take those victory moments and you do celebrate but then you continue to look forward. It’s a continuous improvement model. “How can I continue to fix things?”
It's a business accepting failure and having processes to optimize and fix it.
Embracing the problems because the problems tell you what you can be doing better.
The Japanese know about manufacturing. That's why you perfected the art of whiskey. Kentucky has been doing it forever then all of a sudden they come up with it and it’s perfect because they know this. It’s amazing.
The principles are fairly straightforward. If your frontline guy is passionate about what you're doing then they're going to want to fix problems and make your product better going out the door. If you say to them, “In our instance, I know you want to do good and make opportunities for people to do good in our community, you're empowered. Tell me what I can be doing better.”
This is why fear-based leadership doesn't work. It encourages people to sweep things under the rug.
In these concepts, there are two different management styles. The manager and the employee as one style where the manager is standing there saying, “The beatings will continue until your morale improves.” With lean, the thought process is there's the manager, process and employee. We're going to beat the process up until performance improves instead of beat up the employee. We're going to find a way. It's a two-way street. It's not top-down. It's not bottom-up. It's all of us coming together to find how do we make a better process, product and outcome.
This applies to marketing too where the best marketing plans aren’t this beautiful plan that you take months to write and is perfect. The best marketing plans are plans that allow for optimization and understanding to stop things that aren't working, add other things and have opportunity budgets. Many times people want a perfect plan and set it. The iteration of a plan is what makes it great. I speak at colleges or people hit me up and say, “I'm in marketing. Can I talk to you?” Marketing, entrepreneurship or business, where do you think it's all going?
I like to think of myself as an entrepreneur. That's hard to say when you're an executive director of a state agency. My wife laughs at me when I say I’m an entrepreneur.
One great thing that Ducey has done in terms of what he's done for state agencies and how they have business operating components from a mindset of a former business person is been amazing. You do think like a business.
That's been integral to what we've been doing is switching the mindset from being, “We're not an agency that happens to be a business. We are a business that happens to be an agency.” You can't be an entity that puts over 60 products a year in the marketplace and not have a business mindset.
$1 billion a year company.
From a marketing standpoint, the work that Chris has done with our team has been instrumental in our ability to succeed.
He’s another agency guy, an incredibly smart marketing person and a leader.
We'd like to think when we're marketers that we're these amazing, creative people. We're so creative and be able to think of these things. We come up with these great ideas but if you have that mindset and that's all you are is creative without the data or the science of marketing behind it, you're not going to be successful. You have to be willing to understand where your customers are at, how you're going to meet that customer whether you're taking it all the way to them or bringing them a little bit to you, you got to figure out what the pathways are to meet that customer so that they want to interact with your product and be a part of your product. You've got to be willing to embrace the data and the cold, hard facts that are out there.
Marketing now at any job function too whether it's creative, account, marketing director and I will relate it to a baseball analogy. You have to be a five-tool player in marketing. You can't be strong in one area without having supportive pieces to it. Those are what are making the greatest marketers. You can't think about social media from a creative standpoint or from a copywriter’s standpoint. You have to think as a digital marketer. You have to have some analytics and great idea. You have to have a PR hat on. There are so many elements now that need to be woven into plans and marketing execution that if you're a strong player in any one given area, it's not enough anymore.
You got to be able to touch all the bases. You can come up with a great TikTok video that you throw up there and it gets one million likes but if it doesn't sell your product, what's the point? If it doesn't drive connectivity of why you're there, the same thing with an Instagram photo, post on Facebook or any of those things has to be driving to some purpose.
It’s a hard business. The other way around too because if you have all the data in the world that's showing, “Here's where you need to be. Here's the business message we need to have on. What's motivating consumers? Here's how it's going to be our business objectives.” The idea execution-wise has zero creative inspiration behind it. It sucks too. It's such a hard business because you're putting so many disciplines together. It's art and science. I don't know what other business in the world has that mixed.
You get to be creative, think through and use your brain. You can't just be out pulling something out of thin air. You have to put a thought process to it. You get to be creative and think about things. Growing up in this business and having the opportunity back in my political days, I would go from one day where you're thinking you're King of the Hill or a president and showing him all these wonderful things. You're the one leading him through the process. The next day, you got to get up and you go to the Boys and Girls Club in Guadalupe and you have to put on an event for kids. It keeps you humble but it keeps your focus on how you got to be able to focus on where you're at and the client that you're with and who you're working with and how you got to be able to bring their needs to the table, not your ego and all those different pieces.
We have a thing coming up internally which I'm excited about. It's called Win, Train, Grow. It's more of an internal mantra because, in any business, you want to win. You get excited about those wins.
I’m a little competitive.
Creativity without the data isn't going to work.
You can tell me the number of sales per retail like how many retailers we have. We understand the scoreboard of what a win is in all of our business metrics. Great business, creative and marketing people, we want to win. I've noticed that for thirteen years in our agency. The other aspect that I haven't done a great job with that I want to put more emphasis on is the training part because there's so much opportunity around training, bringing those young people into an organization or mid-level people in the organization and training them to be the next leaders.
You won't succeed if you don't do it.
There are so many great people in our business that are now at other leadership spots. I've got dozens of people who have worked in ’08 who are now running things or have their own agency. I keep in touch with them. It's our job to train those next leaders or if you are a big-time leader, agency or company, you need to bring your game up even next. Where I'm at, I've got to be trained to go to the next level. I have a coach that kicks my ass because I'm not where I need to be. The third part is the growth aspect. How are we growing as a company? How is the lottery growing? How are we growing as individuals? That's what life's all about. That's what I get excited about is the process of all this stuff to where you see growth.
In that same vein, do you remember Biju Kamaleswaran who was with us over the years as our CFO?
This dude is an amazing financial whiz.
He had a saying that he used to say all the time about staff in terms of, “You need to have the king, heir and spare.” It's a training mantra. It's a thought process that you have the person that's doing the job. You need to have a person in line that is being prepared to do that job and you need a spare who needs to be able to run both things in case something happens. You have to have that thought process of development. That's what it is fundamentally is you're developing your team and your people. We've put a big emphasis on trying to and we're not there yet. It's a goal and in state agencies, it can be difficult trying to develop a career path. When we came in, there was a lot of lateral movement. There weren't paths. When you're working in a large agency, even a medium agency, showing your staff that they have a pathway to continue to move within the organization even if they move out of an organization Gordon used to always say, “I'm flattered when someone wants to hire my people.” It helps you have connectivity from a broad network standpoint where you have GCJPR alumni around the state working in different agencies and places.
That needs to be embraced more in our world. Before, we were like, “No one's leaving.” There are different paths at least from the agency perspective where there are certain people that come in. If you're fresh out of school and you get a job at an agency, those 3 to 4 years are your real marketing MBA. This happens in consulting companies and big accounting firms. It happens at law firms.
It's a meat grinder but what you learn in that timeframe is invaluable.
You're either on a key leadership or partner track within an agency and you're an agency lifer or you take that skills and experience and you go leverage an insanely awesome job you're also passionate about probably client side. We, as an industry, at least on the agency side, need to embrace that a little bit more.
Call it like it is.
We shouldn’t fear it.
It is going to happen so why be afraid of it? The more you put effort into building great talent, the more you're going to attract people to want to come and get that. You can't fear it. We've got a strong policy.
How many employees are in the lottery?
About 100. We are a little bit higher now. We've got some people that work through our vendors with us. Upwards of 120, probably.
I struggle with this too, the career path aspect of any business, mapping out the individual career path for each person is so hard.
Especially with an agency mindset where everybody's at a certain level and anytime you make a minor change in one thing, it can change direction on things. It has been a focus for us. It's something we continue to try and perfect. As we look to a lottery of the future, what does that lottery look like? We're trying to build that capability and to build careers for our people. We do a strategic plan every year as every company does. Always number one in our focus on our strategic plan is, “What are we doing for our employees? ”If I don't have a happy, industrious workforce, I'm never going to have a happy, industrious bottom line. You've got to put that employee in there as the top focus of what you're doing.
Somebody has a great quote, “You take care of employees, they take care of your customers.” You're working with Powerball in the Multi-State lottery. What's your role there and what do you see for that?
One of the things that is fascinating about being in the lottery is we have a monopoly in our states. Our competitors are entertainment competitors. It's a competition for the entertainment dollar. I don't necessarily have a competitor in straight-up lottery space.
Your competitor is a concert or a candy bar.
What else can somebody spend for entertainment purposes? That's what our competition is. What that does as an industry is it allows us to be collaborative. One of the beautiful things is there are 48 other jurisdictions within the United States that have a lottery. We all come together and work together on planning. We have two organizations that we do that in. The first one is the Multi-State Lottery. That's made up of 38 of the states that are part of the Multi-State Lottery. That’s getting into lottery theory. That’s MUSL, the mega millions consortium, that’s ten states.
That’s Powerball mega millions. It's $1 billion. Everyone pulling those sales together and making one winner that's winning a ton of money that gets people excited.
Powerball is run and owned by MUSL. MUSL is owned by all the independent states that are part of it. A great group of people and a group of directors that come together. In the United States, $83 billion industry a year. The bigger stat and the more important stat is it’s an $83 billion industry a year that gives $23 billion back to a good cause.
Is there another example of an entertainment company that does $1 trillion a year? How many retailers?
If you look at the total count across the country that is affiliated with lotteries, there are 220,000 retailers across the states. A lot of that is driven East Coast where you're in New York City where there's a convenience store or something in every corner. We have a little bit more than 3,000 retailers in Arizona. When you look at what we do with the brand, it's 38 directors that come together to manage the Powerball brand and we have to manage it specific to our jurisdictions but we also need to be thinking about it from a national perspective.
I've been lucky I was the deputy chair of the Marketing Committee for a number of years and I've come on as the chairman of the Marketing Committee. We have an RFI that's out in the field. It's an RFI to start the conversation but we're actively out there looking for brands that we can partner with. Whether it's promotion whether it's coming together to bring our fans, patrons and customers together, we want to drive affiliation, connection and partnership with what we do with Powerball.
You have 48 jurisdictions that sell Powerball. All of them doing good with the money they raise off of that. When you look at the demographics of the people that play the game, it covers every demographic you can think of. We have people from eighteen and above. There are our core demographics in the 34 to 65 range but we hit people that are on low socio-economic or that make $150,000 a year. We hit all of those categories and the reason we do is everybody wants to dream.
What I love about the insights that we understand with a ton of consumer research is it's not about winning money. Many people are like, “I don't want to buy a big house. I want to pay for my kids’ college. I have a medical bill.” How that dream looks is different for everybody. It's not about winning the money.
One of the cool things I get to do is I get to give checks to people. On my first weekend, we had a young lady that was 21 years old. She just turned 21 3 or 4 months before and she won a $3 million prize on our game. That was life-changing for her. To sit with her and talk about it, she was going to be looking at what she was going to do from education and some of those different types of things. You helped her make that connection and piece.
I can remember when we launched the Arizona Cardinals ticket. Think about from an Arizona Cardinals brand from a partnership standpoint. They’re in 3,000 retailers with a partnership with us and with the Cardinals. I think of Powerball and MUSL as a national brand with tons of distribution, almost like a sports team and they're looking for other brands to do like Instagram. They want to do a collab. The reason collabs are such a big deal is that you're putting audiences together that have brand loyalty and you're extending your audience with another audience that has loyalty. You get distribution capabilities because you have your own owned channels. At a time when television’s declining at double digits a year and accelerating, collabs are a big deal. It's not just about influencers. They’re huge.
Let’s take what we just talked about with Arizona Cardinals. They have their digital channels that have a huge following. We have digital channels that have huge followers. We have a player’s club that has 430,000 users. The connectivity options are there and the opportunities are there. The trick in all of this is finding relevancy. I grew up eleven years working with the Snickers people. A mentor in some ways for me is a gentleman by the name of Tom Couture who preached relevancy. Find relevancy from your brand.
That's one of my favorite words now but this was a while back and being relevant to the players you're working with. When I was with Snickers at the time we were running around working soccer tournaments and little league, all youths’ sports. What is the relevance of a candy bar to a youth sport? It seems a little bit disingenuous but that was the focus of trying to drive that relevancy and of what we're trying to do with Powerball. How can we be relevant with the demographics, customers and players we serve? How can we bring them more relevant content and material to keep them engaged with us and to help them engage with other brands? To the collab thought process, that's what we're trying to do.
I have this weird thing. I love people that have PR backgrounds. In this day and age, PR is more relevant than ever. It's not just about pitching stories to news media. It's so much more expansive to gain relevancy. It's collabs, influencers and traditional PR. Metrics around how many people saw your stuff. Your earned media metrics, which are in a million different channels.
The COVID era even brought this out further. We've been talking for 2 or 3 years in marketing and advertising telling a story which the PR world was always about telling a story. When we went into COVID, one of the pieces that we did with our marketing and our advertising is we went away from buy to making connectivity on a personal level and human level in what we were presenting. We went into our holiday season with a young woman walking through the scene and she was not buying tickets for her. She was out buying tickets to give to people that she interacted with that day. I love that piece.
It’s one of my favorite campaigns you've ever been a part of.
We've stayed in that vein. It wasn't just because it was COVID and those pieces. It was much the emotional need in our community to feel a human connectedness. All of us have been longing for it through COVID. We don't get to hug each other and do these things. We need to have that human peace. It was conscious on our part in working with your team to develop to be human in what we were presenting.
Adweek picked it up. They're like, “You guys exploded in sales.” This campaign is different and they loved it. It’s one of my favorite campaigns because it was empathetic to what was going on at the time and it was relevant.
In our industry, a ton of our lottery brethren were pulling their advertising. They went completely dark. I don't fault anybody that you get to make those decisions for your brands in the jurisdiction that you're in but we felt that it was more important to stay connected to the community and bring that key element. On our digital channels, we were doing giveaways. We took $500 gift cards and we're asking people not to nominate themselves but to nominate a bartender or someone that worked in the tourism field, nurses or healthcare workers. We ask them to nominate someone working in those fields on specific days to win a $500 gift card.
The case study and campaign look great but the reason it worked is because it truly was authentic to the purpose of your brand and the organization that you've been doing for a long time. It wasn't a surprise. It wasn't like suddenly you care about the community. This has been going on. It was completely genuine and that's why it worked in. You did the brand homework early and you stuck with that. Great work happens once you've done all the early point stuff.
It was a debate internally. “Do we pull? Should we be out of the market? Should we stop?” We even had some advice from your team saying, “You guys got to go down.” I'm sure it wasn't a hard thing for your team to say. We came back and said, “Let's work together. Let's get relevant to the time and put something out in the marketplace.”
I remember talking to Chris about it. It was pandemonium. People were stocking their shelves in grocery stores. It looked like a zombie apocalypse that we sell. They’re like, “We're going to keep our commercials going when people are going to be locked down in our house. That's insensitive. We had to have some tough conversations about it.” It worked out. It was the right call.
It worked because we stayed focused on what the mission and relevancy are.
We don’t run the creative of a buy ticket. It was right on. Thank you, Gregg, for coming on.
Scott leads a stable of marketing agencies and services offering the world's biggest brands speed, value and results. OH is an independent agency built to serve today's brands through consumer-centric marketing and strategy.