Media: Behind the hype - Camelot sales boost belies falling lottery interest

Can Camelot sustain a rise in sales if it is based on new games? Camelot, the operator of the National Lottery, has reported an increase in sales for the first time in six years. It follows a tumultuous period characterised largely by declining sales and negative publicity.

It sold an extra £40 million in tickets in the year to the end of March - boosting annual takings to £4.6 billion. Punters now spend £88 million each week on the lottery.

And Camelot has this week announced plans to sell tickets via mobile phones, which it hopes will generate further interest and call time on a string of lacklustre financial performances.

While ticket sales for the main Lotto draw continue to fall, Camelot is attributing the overall turnaround to the introduction of extra games (including Hotpicks, Lotto Extra, Daily Play, scratchcards and the most recent addition, the pan-European game, EuroMillions).

These now account for 30 per cent of sales, following a 17 per cent rise in ticket purchases outside of the main draw in the past 12 months.

Dianne Thompson, the chief executive of Camelot, believes she has reason to be optimistic. She says: "I think we will see a slow, steady increase from here on. The lottery has definitely turned the corner."

Thompson believes a shift in advertising strategy has played a significant part in the so-called transformation, while improving the health of the lottery brand.

Indeed, she singles out WCRS's £20 million "project red" ads - which replaced the widely lambasted Billy Connolly campaign, "don't live a little, live a lotto", last January - as a turning point.

Rather than concentrating on raising perceptions of win-ability, for the first time, the commercials promoted the good that lottery money does around the country.

Thompson says: "Although the campaign didn't automatically increase sales, it stopped people dropping out by making them feel warmer and better about the lottery."

Since then, Camelot has parted company with WCRS, its agency of five years. The £24 million creative account was moved into Abbott Mead Vickers BBDO in early 2004. Media Planning Group develops its media strategy.

Recent advertising heralded a return to the celebrity-based TV advertising of the past, with the agency's debut campaign for the new EuroMillions draw starring the comedian Vas Blackwood and the Only Fools and Horses star Roger Lloyd-Pack.

Simon Burridge, the former chief executive of Sir Richard Branson's The People's Lottery (Camelot's main rival until 2000, when it lost out in the fiercely contested battle for ultimate control), believes making lottery ads enjoyable is the key to success.

And he remains sceptical about whether Camelot has hauled itself out of the doldrums.

He says: "It has stopped the decline, but this is not a particularly impressive rise. Camelot should be doing a lot better than it is and needs to recognise that. I think after this (sales increase), sales will continue to decline. There are too many games and it has become too confusing."

It is clear that Camelot has suffered mixed fortunes in the ten years since the National Lottery launched, as it struggles to sustain levels of public interest.

Recapturing the initial excitement that surrounded the competition was always going to be a tough job. The launch of EuroMillions and the exploration of new avenues, including playing on the internet, should naturally raise sales in the short term.

The true test will be whether Camelot can sustain this new rise. And some observers question whether Thompson, after unveiling such positive news, will stick around for the long haul. But the National Lottery operator is on the way to getting it right, for the time being, at least.

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