Proposals for Media Buying & Planning Services for Hoosier Lottery

HOOSIER LOTTERY MEDIA BUYING & PLANNING SERVICES REQUEST FOR PROPOSAL Date Posted: April 14, 2023 Page 2 of 15 I. GENERAL INFORMATION A. Purpose The purpose of this Request for Proposal is to select a firm that can satisfy the Hoosier Lottery’s need for a media buying and planning agency. The selected firm will enter into negotiations with the Lottery’s integrated services provider, IGT Indiana, LLC to develop a contractual relationship. Under the supervision of the Lottery, the agency partner will be expected to: 1. Plan and purchase all media - Including traditional and non-traditional needs. 2. Create purchase intent – Assist in publicizing products, brand and promotional messaging to drive understanding and engagement with Lottery in an efficient and effective manner. 3. Enhance overall image of the Lottery - Aid the Lottery in increasing relevance and understanding of the brand, its mission and beneficiaries in each of the 92 counties across the state. 4. Strategic and creative

collaboration – Work collaboratively with the internal Lottery marketing and retail teams, creative agency of record as well as any other vendors necessary to achieve the Hoosier Lottery’s objectives. B. Expectations As a trusted Hoosier brand founded with the mission to help build a smarter, safer stronger Indiana, it is critical that the Hoosier Lottery’s marketing partners uphold the principles of integrity, transparency, passion, inclusivity and responsibility. Since its inception on October 13, 1989, the Hoosier Lottery has paid more than $17 billion to winning players and has contributed more than $7.0 billion to good causes across the state, including local police & firefighters’ pensions, the Teachers’ Retirement Fund, and the Build Indiana Fund. More than $1.8 billion has been paid to Lottery retailers. The Hoosier Lottery and IGT Indiana expect the successful bidder will: • Be Efficient o Able to negotiate for extended flights, gaining significant amounts of quality added value o Secure competitive rates without sacrificing quality of buy o Proactively recommend cost-saving ideas • Be Strategic o Use market and sales trends, segmentation and media research and data insights and media tools to provide clear and directional recommendations o Ability to remain focused, yet flexible, in reaction to changes brought on by business needs o Understand the media profiles of all 92 Indiana counties, including the uniqueness of the Hoosier culture Page 3 of 15 • Be Innovative o With an ever-changing media landscape, continuously seek new ways to reach our audience. o Specifically, within digital advertising and shopper marketing opportunities, provide recommendations to quickly test new opportunities and determine if they should be a part of a campaign or annual buy. • Be Integrated & Relationship-Focused o Establish integrated working environment to achieve common objectives, building positive relationships and contributing to a cohesive and positive experience. o Maintain constant presence and engagement with client and stakeholders, demonstrating commitment and passion for exceeding Hoosier Lottery business goals. • Be Transparent and Accountable o 100% accurate in following client-specified contractual guidelines and Marketing Code of Conduct. o Responsive to providing solutions to media challenges. o Follow established processes and/or establish processes to ensure seamless execution. o Meet timelines and milestones as specified. o Manage budgets in a fiscally responsible and timely manner. o Accept responsibility for mistakes and put guidelines in place for improvement. • Always Look for Optimization o Demonstrate marketing, retail and lottery industry knowledge with a constant focus on future trends and best practices. o Lead change through clear and synchronized efforts and promote continuous improvement. C. Definitions and Abbreviations Capitalized terms and abbreviations used in the RFP shall have the meanings ascribed to them in Schedule 1. Other special terms and abbreviations may be used in the RFP, but they are defined where they appear rather than in Schedule 1. Page 4 of 15 II. BIDDING AND CONTRACT ADMINISTRATION A. Contract & Contract Term The Lottery expects the media buying and planning partner to start on or about September 1, 2023. Subject to the approval of the Lottery Commission, this contract is anticipated to run for an Initial Term through September 1, 2026 with two consecutive one (1) year optional Renewal Terms. The partner should understand that the contract will be with IGT, however, many terms related to the Integrated Services Agreement (ISA) between the State Lottery Commission and IGT, will be found within the contract. The ISA can be found at: Bids | Hoosier Lottery | Hoosier Lottery. B. Bidding Submission and Contract Timeline April 14, 2023 RFP document posted April 28, 2023 Noon ET Questions due from Bidders May 12, 2023 5 PM ET Credential and Case Study Proposals due from Bidders By May 31, 2023 Finalists contacted Week of June 12, 2023 Finalists’ assignment briefing Week of July 17, 2023 Finalists’ presentations and cost proposal Week of August 11, 2023 Apparent Successful Bidder(s) named C. Bidding Contacts Bidders may submit questions of clarification concerning the RFP before April 28, 2023 at Noon ET. Questions may be emailed to jmccleland@hoosierlottery.com with “HL Media Buying & Planning RFP Questions” in the subject line. Bidders are advised that the questions and responses by the Lottery may be shared with all interested bidders at the time to ensure all parties have equal access to the same information. Credential packets must arrive at the following address by 5PM ET on Friday, May 12, 2023: Jayne McCleland IGT Indiana, LLC 1302 N. Meridian St. Indianapolis, Indiana 46202 D. Letters of Clarification During the assessment and scoring process the Evaluation Committee may have questions of clarification concerning specific elements of each submission. Bidders are requested to submit responses to these questions within 24 – 48 hours. Depending on the nature of the inquiry the information may be shared with other bidders and will be incorporated into the final Subcontract with the Subcontractor if relevant. https://hoosierlottery.com/who-we-are/bids/ https://hoosierlottery.com/who-we-are/bids/ Page 5 of 15 III. SCOPE OF WORK The contract term for the successful bidder will be beginning on or approximately September 1, 2023 through September 1, 2026. The following scope of work is a preview of an annual product and media term with annual billings of approximately $8M. The successful bidder will be responsible for media planning and buying of spot and cable TV, OTT, local print, radio, digital, and out-of-home as well as the following: Account Management • Ongoing Client Communication and Account Management o Daily client-agency discussions with expectation for day-to-day contact with face-to- face hours, as indicated, to support business needs. o Participate in weekly all-partner status meetings and update of joint status reports. o Participate in weekly agency-partner status, digital status, and campaign strategy meetings. o Facilitate day-to-day contact with all external partnerships. o Provide input and updates to campaign and project-based timelines, finalizing elements in accordance with approved specified deadlines. o Provide ongoing maintenance recommendations and end-of-campaign recaps, including insights to impact future campaigns. • Billing and Procurement Management o Provide client with monthly budget summary spreadsheet, fee invoice, tracking reports or other reports as requested no later than the 4th business day of the following month. o Provide MBE/WBE reporting on a quarterly basis. o Manage budgets in a fiscally responsible and timely manner. o Participate in and support quarterly hours and travel expenses recap meetings with executive team. o Provide final billing recap upon completion of campaign invoicing process. Strategy & Media Plan Development • Planning of statewide media through June 30, 2023 for up to nine (9) Tiered Marketing, five (5) CSR campaigns, up to eight (8) Omni-channel campaigns, one (1) ongoing Brand campaign and Always On/Annualized support. Media recommendations should take into consideration TV, OTT, radio, audio, print, social media, outdoor and digital mediums for Indiana-only placements. o Contribute to the development and strategy of creative briefs and planning for all campaigns. • Drive efficiency of planning process with annual buys, which may include, but is not limited to, television, digital, social media, radio and outdoor supporting Tiered Marketing, Brand, Key Account promotions and Omni-channel campaigns and jackpot trigger efforts. Omni-channel campaigns are a holistic marketing approach to supporting select Key Account efforts in and out of the retail environment. Page 6 of 15 • Drive efficiency of media planning process with a focus on Added Value, utilizing on-air giveaways for seasonal Holiday and summer efforts, and securing bonus spots for all tiered efforts. • Maintain relationships with official lottery draw stations (WNDU-TV South Bend, WANE- TV Fort Wayne, WXIN-TV Indianapolis, WTWO-TV Terre Haute, WEHT-TV/WTVW-TV Evansville) to enhance lottery partnership via media and promotional placements. • Traffic and manage a regular cadence of myLOTTERY content in paid media channels to help drive engagement and awareness. • Annual participation in the process of writing an Updated Annual Business Plan • Support sponsorship efforts as needed, including valuation services of potential partnerships. • Research/Data o Participation in all research activities to stay engaged with player and product insights and market conditions. o Ongoing review and utilization of research and insights to understand drivers and barriers to build a relevant brand platform and improve the health of the Hoosier Lottery brand. o Management of the Hoosier Lottery’s Data Management Platform (“DMP”) to centrally create, measure, update, and target audience segments to influence day-to-day decision-making. ▪ DMP to continue to incorporate 2nd party data from retail partnership program. ▪ Continue to use learnings to strengthen process and overall platform opportunity. ▪ Oversee monthly updating process of CRM data. ▪ Adherence to data policies o Present annual media landscape with national and local media trends, including but not limited to, shopper marketing, digital and traditional media. • Segmentation o Provide ongoing media recommendations with a hyper-localized lens to create tailored brand experiences. o Execute and oversee Simmons-MRI syndicated data sync to ensure segmentation insights are accurate and up to date. o Contribute to Player Advisory Panel research efforts, as needed. Media Buying Stewardship • Purchase media and oversee the procurement of added-value and necessary makegoods in accordance with IGT Indiana Marketing Code of Conduct, Exhibit E, and Channel Guidelines, Exhibit F. Compliance of the Marketing Code of Conduct and Channel Guidelines shall be considered a material duty and obligation • Continue to monitor and evaluate added-value deliverables to ensure brand safety is upheld across partnerships/stations. • Negotiate to seek and deliver advantageous value including turnkey added-value programs (execution costs not included), including placement of statewide outdoor program for Problem Gambling Awareness Month Page 7 of 15 o Secure added-value giveaways for holiday and summer seasons and use bonus spots for the remainder of the added-value that is secured throughout the year. • Secure all placements within optimal timing to ensure efficiency, including quality. • Provide a quarterly post-buy analysis and evaluation of media programs using agreed- upon reporting format within 60 business days of the end of the quarter. • Provide campaign mid-buy report after fourteen (14) weekdays from launch in order to evaluate media programs and adjust where necessary. • Enhance lottery partnerships across the state via ongoing communication with existing and potential vendors, as well as annual market visits including draw station partners. • Provide ongoing all-partner communication of a campaign’s performance, with actionable recommendations. • Continue to seek new technologies and mediums to drive sales and brand awareness for the Hoosier Lottery Production • Manage ad serving partnership and process, including brand safety management (MOAT) • Facilitate strategy discussions with Hoosier Lottery team to develop social media paid placements. Each campaign should be viewed independently and optimized for appropriate user action (reach, engagement, conversion). Build out and place social media paid campaigns. • Elevate outdoor production opportunities through ongoing creative recommendations, like spectaculars. Page 8 of 15 IV. BACKGROUND A. Corporate Structure The Hoosier Lottery brand is supported by two corporate entities: The State Lottery Commission of Indiana and IGT Indiana. The Lottery Commission is a separate body corporate and politic of the State of Indiana and operates much like a standard state agency, with a board of Commissioners and an Executive Director appointed by the Governor of Indiana. IGT Indiana is a wholly owned subsidiary of global gaming giant IGT and provides integrated services to the Lottery Commission under the ISA, a 17-year contract. Each entity’s responsibilities are set forth in the ISA and supporting documentation. B. Hoosier Lottery Sales, Marketing and Product Portfolio For Fiscal Year 2022 the Lottery had sales of $1.040 billion with approximately 73 percent of sales from Scratch-offs and 27 percent from daily and Jackpot Draw Games. Lottery sales were supported with a statewide marketing budget of approximately $18.5 million. In FY 2023, the lottery anticipates sales of $1.7 billion which includes a 13% increase in Draw. C. Current Hoosier Lottery Distribution and Promotion Hoosier Lottery Draw Games and Scratch-offs are offered statewide through a current retail network of approximately 4,429 outlets, comprised of 64.8 percent gas/convenience stores, 4.9 percent convenience stores only, 11.1 percent supermarkets and food stores, 10.8 percent liquor stores and the remaining 8.5 percent through various retail outlets such as newsstands and drug stores. 46.6 percent of Lottery retail outlets are chain-related and 53.4 percent are independently owned and operated stores. The Lottery provides all outlets with extensive retail display programs, including equipment (Lottery terminals, consumer-facing electronic display screens, ticket validation checkers, vending machines) as well as permanent and promotional display materials. D. Hoosier Lottery Player Base Continuing to deepen player relevancy and engagement with current players and expanding participating amongst lapsed players is essential to the Lottery’s ongoing growth. Of the 5.2 million people in Indiana who are age 18 or older, 2.3 million are current players and 1.1 million are lapsed players. Of the lapsed players, 5% are unlikely to play again. The Hoosier Lottery currently has sales of approximately $4.50 per capita, per week. Page 9 of 15 Understanding regional variances is critical to deepening relevancy and increasing same store sales. Currently 50% of sales are sourced from the Northern Division, which includes the North Central, Northeast and Northwest Districts. The Southern Division also accounts for 50% of the total state sales and includes South Central, Southeast and Southwest Districts. Based on lottery player quantitative surveys, current player demographics are balanced in terms of gender (48.1% Male / 51.9% Female) with a mean age of 46. Lapsed players tend to be more female (59 percent) with a mean age of 50. E. Corporate Social Responsibility The Lottery’s mission is to return maximum net income to the state in a socially responsible manner. We have woven Corporate Social Responsibility into every aspect of our organization’s vision, policies and practice. Thanks to our players, Hoosier Lottery funds have supported local police and firefighters’ pensions, the Teachers’ Retirement Fund and the Lottery Surplus Fund. The allocation of Lottery funds is controlled by statute, and since 1989, more than $7B has been given back, benefiting every county throughout Indiana. The Lottery’s Corporate Social Responsibility program focuses on three pillars: Responsible Gaming, Engagement and Responsible Practices. F. Agency Partnerships The Lottery currently has a partnership with traditional creative agency, The Buntin Group (TBG) and digital agency Laughlin Constable (LC). As our traditional creative agency, TBG is responsible for leading brand and product strategies across traditional advertising, retail, public relations and promotions. As our digital agency, LC is responsible for strategic planning, creative and content development, social and digital production and analysis. The chosen media agency will be responsible for planning and placing media across advertising, retail and digital. Digital placements span from traditional standard-sized flash banners to customized rich media units. The selected Bidder is expected to integrate across agency partners, influencing creative strategies by using media tools, market insights ensure the right messages are appropriately communicated in the ideal medium. V. GENERAL REQUIREMENTS FOR BIDDERS The Lottery is conducting a two-phase process to procure a media planning and buying partner. Phase I will evaluate credentials and experience of Bidders. Qualified Bidders will be invited to Phase II of the procurement which will involve an assignment that will be judged by the Evaluation Committee as well as a cost proposal. 1. Phase I – Credentials and Case Studies Phase I of the evaluation requires bidders to supply credentials and case studies that articulate Bidders’ experience and readiness to work with a fast-paced, retail business. Bidders must submit the following: A. Transmittal Letter - An individual authorized to legally bind the Bidder must sign the transmittal letter. The person who signs the transmittal letter will be Page 10 of 15 considered the contact person for all matters pertaining to the offer unless the Bidder designates another person in writing. The letter must include the Bidder’s mailing address, e-mail address, fax number and telephone number. Bidder shall submit a cover letter indicating that the Bidder is responding to the RFP and that all of the RFP requirements have been met. The Transmittal Letter should also confirm qualifications and interest in participating in this solicitation B. Agency Fact Sheet (ATTACHMENT A) - Agency Fact Sheet, Attachment A, shall be completed by the Bidder. C. Three Case Histories - Bidders must submit three case histories showcasing the following relevant experience: 1) Local campaign that shows insight and understanding of Indiana and Hoosiers 2) A sales-driving retail campaign that includes shopper marketing executions 3) Highly integrated campaign across traditional and non-traditional mediums, including event and promotional extensions as well as digital. Demonstrate integration of campaign big idea and working relationship with creative partners Each case study should be no more than two pages in length and be accompanied by a video no more than 4 minutes in length. Each case study should demonstrate how the creative idea was contextually integrated into your recommended mediums. Case histories must provide the following information: a. Business situation b. Business objectives c. Strategy and understanding of target market d. Media plan with samples of creative used e. Names of team members that were involved in the campaign f. Description of how media agency worked with creative agency to align on strategy g. Results – Sales results as well as other key performance indicators 2. Phase II – Bidders who meet the Lottery’s requirements will be invited to participate in the Phase II which will consist of the following: A. Test Assignment - Bidders will be briefed in person on a challenge that is currently facing the Lottery. After approximately one month, Bidders will be asked to present their strategy and tactics in an in-person meeting with the Evaluation Committee. B. Based upon the Lottery’s scope of work, Bidders will be asked to submit a compensation proposal and staffing plan. VI. EVALUATION OF PROPOSALS A. Submission of Proposals Bidder must submit documentation for Phase I in the following manner: Page 11 of 15 1. Main package must bear the Bidder’s name and contain the Transmittal Letter (1 copy) 2. Package must contain seven (7) hard copies of Agency Fact Sheet and Case Histories 3. One (1) digital copy of the Transmittal Letter, Agency Fact Sheet and Case Histories. Please indicate name of agency on jump drive. After Phase I submissions are evaluated, finalists will receive additional information on the format of Phase II submissions and presentations. B. Evaluation Committee The Lottery will appoint a committee to act as the proposal evaluation team (“Evaluation Committee”). The Evaluation Committee will be responsible for evaluating proposals’ compliance with the RFP, using the evaluation criteria stated in this RFP. The Evaluation Committee will be made of qualified subject matter experts to ensure that the best possible terms are arrived at for the Lottery. C. Phase I Review and Scoring (Maximum Award: 60 Total Points) The Evaluation Committee will review the Agency Fact Sheets and Case Studies from each bidder, evaluate and score the submission according to the maximum points allocated on the following criteria: Categories Points Ability to perform scope of services • Relevance of clients • Appropriate size • Team experience • Services and tools, approach to planning and buying • Knowledge and understanding of Indiana markets • Demonstrate how to incorporate Corporate Social Responsibility 30 Quality of Prior Work • Case study 1 • Case study 2 • Case study 3 30 D. Phase II Review and Scoring Criteria and scoring procedures for the evaluation of Phase II presentations and submittals will be announced to finalists during the in-person briefing. Points will be given for MBE/WBE, as well as Indiana based entities, in Phase II scoring. E. Determination of Overall Score Following completion of the scoring of Phase II, the Evaluation Committee will combine the Phase I, Phase II, and the pricing scores to arrive at a total score for each Bidder. The total scores will be ranked and the Bidder with the highest score will be named the Winning Bidder. Page 12 of 15 VII. NEWS RELEASES Bidders shall not issue any written or oral statement or other written or oral communication to any press or other media representative with regard to the Lottery, the Lottery Commission, or this RFP, unless such communication is specifically approved in advance by the Lottery. VIII. DISCLAIMER By issuing this RFP the Lottery does not guarantee that a contract will be awarded. Furthermore, any Subcontractor must meet all requirements set forth in the Integrated Services Agreement between the Lottery Commission and IGT Indiana. A copy of the Integrated Services Agreement can be found at: https://www.hoosierlottery.com/who- we-are/bids. IX. OWNERSHIP OF PROPOSALS AND CONFIDENTIALITY Proposals and any other materials submitted by a Bidder in response to this RFP will become the exclusive property of the Lottery upon receipt and will not be returned. Materials submitted in response to this RFP will become public records under Indiana’s Access to Public Records Act (Indiana Code 5-14-3) (“APRA”) once received by Lottery staff. If materials contain trade secrets or other information that is confidential under APRA, please label accordingly before submission to the Lottery. X. PROPOSAL COSTS The Lottery is not liable for any costs incurred by Bidders as a result of responding to this RFP. ATTACHMENT A – AGENCY FACT SHEET Company: ______________________________________________________________ Address: _______________________________________________________________ Names and Titles of Principals:_______________________________________________ Key Business Contact _____________________________________________________ Phone: ________________________ Email: ___________________________________ A. Agency History, Ownership and Key Employees 1. Founding Date. When was your office opened? 2. Address of Indiana office location, if applicable, and number of local employees. 3. Current Ownership. Who are the current owners of your agency? 4. Team leadership. Provide a short biography of no more than six team members that you propose manage the Hoosier Lottery account including the buyers responsible for Indiana markets. Describe their current roles and their past experience. Page 13 of 15 5. Parent Company/Affiliation. Provide a listing of all companies/agencies that are owned by or affiliated with your parent company. B. Current Clients, Account Gains and Losses 1. Current Clients. List all current clients—brands, products and services—managed by your office. Rank them by size, indicate the services provided, the dates they were acquired and, if possible, approximate budget ranges for each. 2. Account Gains. Of the accounts acquired within the past two years, please comment on why your agency was chosen to service these new accounts. 3. Account Losses. Of the accounts lost in the past two years, explain why they left or were resigned by the agency. C. Current Size 1. Current Size. Summarize the total media billings for calendar years 2021 and 2022, number of employees and number of accounts currently being handled directly by your office. 2021 2022 Total Media Billings Per Year Number of Employees Number of Accounts D. Please chart your clients’ 2022 spending by media—TV, radio, outdoor, trade publications, digital, direct response, etc. Provide rough figures and percentages by media using the grid below. Television Audio Print Digital Outdoor Other Network $ / % Metro Trade $ / % Video $ / % Vinyl Billboards $ / % Direct Mail $ / % Spot $ / % Non-metro Consumer Pubs $ / % Mobile $ / % Digital Billboards $ / % Retail $ / % Syndicated $ / % Streaming $ / % Display $ / % Out of Home (Pump Toppers, IceBox Wraps, Mobile Coupons $ / % Page 14 of 15 Nozzle Talkers) $ / % Cable $ / % Other Rich Media $ / % OTT $ / % Streaming $ / % E. Scope and Nature of Agency Services 1. Agency Services. List the various services offered by your agency and the number of full-time employees dedicated to each department (e.g. account management, strategic services, buying) 2. Other Specialized Services. List any other specialized services your agency offers to its clients 3. Media tools. In two pages or less, describe any tools used to better understand markets, identify appropriate reach and frequency levels or otherwise aid the agency and its clients to optimize media effectiveness F. Process and Workflow a. Planning and integration process. In a one-page visual, please show your planning and buying process as well as the ideal timing of each stage. Also indicate “integration points” where client and creative agency are involved. b. Media Plan format. Please show us an example of an actual media strategy and recommendation in the form that you would normally present to a client. Redaction of sensitive information is allowed. c. Post-Buy analysis. Please show an example of a post-buy analysis in the format normally presented to clients. Redaction of sensitive information is allowed. d. Buy specs. Please describe your process for communicating buy specifications to team members and methods for ensuring that programming included on a client’s “no-buy” list is never purchased. E. References 1. Client references. List four client references (name, title, company, address, telephone, email and fax number) we might speak with about the effectiveness of your efforts. 2. Agency partners. List at least two references from agencies in which you have collaborated with in the past. Provide name, title, company, address and email of a contact that can speak to your level of collaboration and integration. Page 15 of 15 Schedule 1 – Definitions and Abbreviations “Bidder” means an entity that submits a Phase I response to the RFP. “Lottery Commission” means the State Lottery Commission of Indiana created by Indiana Code 4-30. “Draw Game” means a lottery game in which a player selects a combination of numbers or symbols, either manually or by an automated picking system, and winning tickets are determined by appropriately matching the combination of numbers or symbols randomly selected by the Lottery Commission at a designated future drawing or selection event. “Hoosier Lottery” or “Lottery” means the operation of the state lottery in Indiana by the Lottery Commission together with its integrated services provider, IGT Indiana, LLC (“IGT Indiana”). References to “Hoosier Lottery” or “Lottery” may refer to the Lottery Commission, IGT Indiana, or both, depending on the situation. “Initial Term” means the period starting upon effectiveness of an agreement between the Lottery and the Winning Bidder under the RFP, planned to be from July 1, 2023 to June 30, 2026. “Scratch-off” means a preprinted ticket on which the game play data area is uncovered by removing a latex covering, to reveal immediately whether the player has won a prize. “Jackpot Draw Game” means a Draw Game in which the prize amount will typically increase for a future drawing or selection events if no winner was selected. “Marketing Code of Conduct” means a document which outlines and describes the requirements for Hoosier Lottery advertisements. “Renewal Term” means an optional one (1) year period following the Initial Term during which an agreement between the Lottery and the Subcontractor is valid. “RFP” means this Request for Proposal as issued by the Lottery. “Subcontractor” means a person who provides or proposes to provide goods or services to the Lottery. “Winning Bidder” means the Bidder who obtains the highest score through Phases I and II of the evaluation under this RFP.