Can The National Lottery Ride The Olympic Wave?
On Sunday night, the BBC celebrated Team GB’s fantastic performance in Tokyo with a televised homecoming concert. For athletes who’d been forced to leave the Olympic Village within 48 hours of their last event, this was a chance to finally celebrate their successes as a team and, let’s be honest, the unique sound of Nile Rodgers’ Stratocaster ‘Hitmaker’ is as good a way to celebrate as any.
Tokyo '2020' was undoubtedly a phenomenal performance by our Olympic team with 65 medals matching the haul from London 2012 and second only to Rio 2016 in terms of medals won overall. Even more impressively, Team GB won medals in more sports than any other nation. However, quietly behind the scenes, Sunday's show also cemented a fantastic year for The National Lottery itself.
It was shortly after Rio 2016 when the BBC decided to bring the curtain down on the long standing TV draw show, blaming poor audiences and the shift towards digital play. However, there also seemed to be unease that prime-time viewing could also be seen to be pushing Lottery sales. Quite a turnaround then for the BBC to dedicate 90 minutes of its Sunday night schedule for what was a fantastic piece of ‘branded content’, which highlighted not only the impact of UK Sport funding but also the breadth of other projects which Lottery funding supports across arts and culture.
Auntie’s willingness to connect itself so closely with the Lottery again is simply illustrative of what has been a much wider reversal in fortunes for The National Lottery and it’s operator Camelot – perfect timing given the ongoing bid for the fourth lottery licence (due to be announced in February 2022). Earlier in the summer, Camelot announced record sales for 20/21, breaking the £8bn barrier for the first time and also snatched a treble at the Marketing Society awards, aptly including one for ‘brand revitalisation’.
Whilst business plans don’t conveniently run to Olympic cycles, these headlines are stark contrast to those from four years ago where the business was dealing with choppy waters which even Olympic great Hannah Mills might have struggled to navigate. After spectacular early results, a revamped 59 ball Lotto game had frustrated players and was seen by many as simply too too hard to win. To make matters worse, relations were strained both with the regulator over a results error (leading to a £300k fine) and with independent retail body NFRN over the introduction of chargeable terminal support.
The competitive landscape had also shifted dramatically with digital players such as Lottoland exploiting loopholes in the regulatory framework to challenge what had historically been a state protected monopoly market and resell EuroMillions tickets to UK players (the Lottery equivalent of that sneaky shin tape the Danish cyclists seemed so fond of!). Whereas the Lottery had previously been celebrating record returns for Good Causes, it now found itself subject to a 2017 National Audit Office investigation due to a 15% decline in returns to society.
So what changed? Well, reassuringly for those of us who still believe in the fundamentals of good marketing, the 4 P’s are very much at the heart of this turnaround story:
PRODUCT – changes have been made to the previously beleaguered Lotto game with the 'must be won' Rolldown draws helping to drive a £153.6 million increase in draw-based game sales (3.4%) to £4,690.7m. Whilst 3% might not sound a lot, this is an impressive return given the impact of lockdown on retail sales (both in the UK and for other EuroMillions community members e.g. Spain) and reverses what has been a long term erosion in this part of the portfolio.
PLACE – alongside Scandinavian operators, Camelot have continued to be at the forefront of digital innovation within the Lottery sector. The UK National Lottery remains the largest digital lottery in the world (by revenue) and the pandemic has enabled it to drive a number of new players to digital channels, particularly mobile which now contributes £2,481.9 million sales. However, what’s also been notable over the past few years is that Camelot seems more at peace with being able to grow digital sales whilst also maintaining positive retailer relations. Innovations in the app now put services such as ticket scanning and results checking front of centre (critical for retail players) and the app now feels like a more rounded proposition than a sales channel alone. In addition, Camelot have been able to expand into critical new growth segments, with Aldi announcing they are to sell Lottery tickets across all 900 of its UK stores.
PRICE – the annuity game Set for Life has brought a new dimension to the portfolio, meeting different player needs by offering prizes that pay out monthly rather than in one eye-watering jackpot. Inevitably these types of games appeal more to younger players than traditional draw games and so have helped to bring new players into the category. However, crucially the game is priced at £1.50 (lower than both Lotto and EuroMillions) and offers fantastic returns for those who might not scoop the big win, with a £5 win for matching two balls at a decent win frequency. It’s a great example of the rational elements of game design aligning brilliantly with the emotional positioning of the game overall.
PROMOTION – as an outsider, perhaps the most refreshing change over the past couple of years has been the investment in The National Lottery brand itself. Far more marketing investment has been allocated to sustaining the role of the brand within society and the £600m allocated to the Community Fund at the start of the pandemic provide a very tangible illustration of the impact the National Lottery has across the UK. However, this hasn’t been about some lofty brand purpose campaign – Camelot have also been able to recognise the little rituals lottery players cling to by celebrating ‘ The Magic Numbers’ . Add Dermot O’Leary and some fantastic Saturday night broadcast partnerships into the mix and it feels like the Lottery is feeling much clearer on who it’s trying to target and the role it wants to play as a brand. It’s easy to get bogged down in the relative merits of one execution vs. another but a more fundamental point is that the Camelot team have recognised the important of balancing both the long AND the short of it (Binet and Field would be proud).
Camelot is arguably in a far better position now than after London 2012 to ride the wave of Olympic positivity. Back then, the operator was faced with a looming unpopular price change it had ducked for 18 years previously. Fast forward to 2021 and, whether measured by hard metrics (sales revenue or returns to Good Causes) or softer metrics (such as consumer sentiment), the Lottery is once again a brand with positive momentum behind it; indeed YouGov rank the brand second only to Netflix in terms of the increase in brand positivity (albeit from a low base).
As ever, the challenge is now to sustain that momentum and the balancing act of keeping such a diverse group of stakeholders happy is now mean feat – there are already murmurings of discontent from independent retailers about the Aldi deal, for example. However, from a consumer perspective at least, the balls seem may well be falling favourably – after all, I think we could all do with the dream of a Lottery win now more than ever!!!