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Colorado Lottery Tracking Study Presentation May 2011 (W1)

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  1. Colorado Lottery Tracking Study Presentation May 2011 (W1) for Colorado Lottery by Simon Jaworski

  2. Colorado Lottery Tracking Study: Content page Background, Objectives, Methodology, Sample 3 – 6 Key Findings & Recommendations7 – 13 Ad Awareness14 – 19 Second Chance Drawings, Social Media, Website & Benefits 20 – 25 Lottery Playership26– 36 Scratch GAMES37 – 45 Multi-State Jackpot Games – Powerball & Mega Millions46 – 57 Other Drawing Games – Lotto, Cash 5, MatchPlay 58– 66 Millionaire raffle 67 – 69 Key Lottery Dynamics: Player Type, Day Played, Lottery opinions, Game Satisfaction ratings & demographics70– 77 Appendix 78 – 90

  3. Background • TRiG is conducting a point-in-time tracking study for Colorado Lottery and Cactus Marketing Communications: • Wave 1: April 18- April 26 • Wave 2: June 3- June 13 (anticipated) • TRiG has been conducting this study with the following focal points: • Data Continuity with historical Colorado Lottery tracking studies • Ensuring data collected online comports with previous RDD only studies • Managing sample to be reflective of overall Colorado population • This study collects a wide range of data regarding many different aspects of the following games:

  4. Objectives • There are two key goals for this Colorado Lottery Point-In-Time Tracking Study: • To give the Lottery and Cactus accurate and relevant information, to enable both parties to make sound business decisions based upon market trends. • To enable the Lottery to use the new Tracking Data in conjunction with the historical information captured over the previous Telephone Tracking Study, and to make both the study and the data a seamless integration into the lottery’s business plan, on a weekly, monthly and annual basis • Player Profiles • Based on their Gender, Age, Income, Education, Employment, Ethnicity, Language of preference for communications (e.g., Spanish) and Regionality. • Playership and Spending • Frequency of playership and the games they play • A composite profile of the “typical” Colorado Lottery player • To compare incidence findings of overall total playership, Frequent and Infrequent playership, and Non-playership (for all Lottery games) to previous waves of the Attitude & Usage study. • To uncover whether the rate of cross-playership has increased or decreased among Frequent (weekly and monthly) and Infrequent players; • To determine spending patterns for players of each Lottery game • To determine equity ratings for the various Lottery games and compare to previous waves

  5. Methodology • 596 Colorado respondents participated in a 15 minute survey • 450 completed online • 146 completed by telephone interview • The respondents: • Must be older than 18 years of age • Must not have moral objections to Colorado running a state lottery • Must not work for an advertising agency, market research company, marketing consultant, any type of Lottery or a store that sells lottery tickets • Phone respondents must not have internet access • Questionnaire subject areas: • Demographics & Internet Usage • Participation in other gaming activities • Awareness of Colorado Lottery games, advertising and promotions • Playership of Colorado Lottery games: frequency of ticket buying, purchase motivations and barriers, influence of jackpot size, game equity • Impact of Mega Millions • Image perceptions of Colorado Lottery

  6. Sample Frame • N=596 completes • Gender breaks Research Colorado Population • Female 51% 51% • Male 49% 49% • Age breaks (% of adult population) • 18-24 10%11% • 25-34 17% 20% • 35-44 17% 20% • 45-54 24% 20% • 55-64 17% 14% • 65+ 15% 15% • Race* • Caucasian 81%84% • Asian 3% 3% • African American 5% 4% • Other 15%10% • Ethnicity • Hispanic 21% 21% • Not Hispanic 79% 79% *Percentages total more than 100% as respondents were allowed to select more than one answer choice

  7. Key Findings

  8. Key Findings (1) • 63% of Coloradoans recall viewing or hearing Colorado Lottery advertising within the past month, down from 69% last year (May ‘10). • Powerball advertising has produced the strongest past month unaided recall, at almost twice the level of the remaining games. • Scratch Games, Lotto and Mega Millions follow respectively with 10-12% unaided Ad awareness in the past month. • TV advertising was the most noted channel for creating Ad awareness for the Colorado Lottery, with Billboards and Point of Sale being the second and third most prominent forms, respectively. • Almost half of all Coloradoans are aware of the Colorado Lottery Second Chance Drawing. • Almost ¾ of Coloradoans utilize social media, with 56% being Facebook users. • Social Media users skew younger, and could be a perfect tool to help increase Lottery trial among the 18-34 age groups. • There is a 5:1 ratio of Positive to Negative feelings about the Colorado Lottery!

  9. Key Findings (2) • One in three respondents has been on the CO Lottery website in the past month, although more than half of all respondents have never visited the website. • More than 50% of the past month Colorado Lottery website visitors have noticed the website redesign. The Colorado Lottery website has a Top 3 Box % score of 57% in terms of the website’s ‘excellence’. • 37% of respondents believe that the Lottery provides a source of funding for maintenance of parks and recreation areas and other outdoor projects. • There does appear to be an opportunity to further educate Coloradoans about where the Lottery money proceeds are spent. • 78% of respondents have played CO Lottery games ever, with Scratch Games and Powerball having the highest playership. Past Year playership is at 68%, down 1% from the same time period from 2010. • 54% of Coloradoans have played at least one Lottery game in the past month. • Only 1/3 of the Colorado population have ever played Mega Millions!

  10. Key Findings (3) • Two out of three total respondents indicated a likelihood to purchase lottery games in the future. Only 17% stated they would be unlikely to purchase. • 50%+ of all players purchase tickets at convenience stores regularly, while more than one in three regularly buys their Lottery tickets at grocery stores. • Almost half of Past Year Lottery players have experienced at least one issue at a retail store while trying to purchase a Lottery game. These issues are driven by out-of-stock Scratch Games, unknowledgeable staff or Game terminals/Scratch dispensers not working. • Players’ key motivations to play Lottery, are the chance to win money (82%) and the entertainment value of the games (57%). • More than 90% of Scratch Game players have played a $1 Scratch Game in the past year, although $5 tickets are purchased at higher frequencies on monthly and annual bases than $3 tickets. 6 out of 10 of players spent less than $5 the last time they played Scratch Games. • Players who are spending less on Scratch Games in the past 3 months, say this decision is being driven primarily by having less money available to spend. • 47% agree the price of gas has directly lowered their spend on the Colorado Lottery!

  11. Key Findings (4) • The Size of jackpot is the No.1 influence for Powerball ticket purchase, followed by players ‘having spare money’ and ‘feeling lucky’. • However, the more frequent the player, the less motivated they are by increasing jackpot sizes. Only 43% of Powerball players claim to increase spend as the jackpot increases. • 28% of Mega Millions players spend more than $10 in a typical month (slightly lower than Powerball at 33%). 72% of Mega Millions players spent $5 or less the last time they played (very similar to Powerball). • Powerball and Mega Millions players are in essence very similar, with the notable exception that the % penetration rate of Mega Millions is half that of Powerball. • The average (mean) weekly ‘new money’ spent among all Mega Millions players is $9 (although the median ‘new money’ spend is less than $2.) • 70% of Mega Millions players are spending $5 or less in terms of ‘new money’. • Over half of all respondents who play Powerball and Mega Millions spend the same on both games regardless of the size of each game’s jackpot!

  12. Key Findings (5) • There is a 50-50 split between those that play the same Colorado Lottery games each week and those that change the Lottery games they play. • 57% of Past Year Players spend the same amount on Lottery every week, regardless of the games played. • Only 12% of those who play Powerball and Mega Millions, will increase Mega Millions spend if the jackpot is high, while maintaining Powerball spend. • One third of Powerball players either are not aware of/familiar with Mega Millions or have not thought about playing the game. • Mean spend for MatchPlay is very similar to both Powerball and Mega Millions, so the opportunity again appears to increase the trial levels of MatchPlay. • 15% of respondents who have played CO Lottery games have purchased a Millionaire Raffle ticket. Of these players, 60% only bought 1 Raffle Ticket last time around. • 40% of CO lottery players express an intent to purchase Bonus Millionaire Raffle tickets in the near future!

  13. Recommendations • Game Awareness, Ad Awareness and understanding of Mega Millions should be the #1 priority for the Colorado Lottery moving forward, as there is a great opportunity to increase player penetration. Once Lottery players actually play Mega Millions, the spend peripherals and patterns are similar to Powerball. • Looking at days where Players claim to play, the largest opportunity to increase Lottery purchases is Tuesday. Weekends and Wednesdays are already strong (as with most historical Powerball states). This can go hand in hand with Mega Millions. • There is a strong opportunity to increase Raffle playership in Colorado, with the last Raffle game only purchased by 15% of the population. 40% of CO lottery players express an intent to purchase Bonus Millionaire Raffle tickets in the near future, so an extra 25% of Lottery players claim they will Probably or Definitely play the Bonus Millionaire Raffle, compared to the last Raffle. • There appears to be a strong case for an increased use of Social Media in Lottery communications, specifically to ensure enough of the youngest age group, 18-34 year olds, are aware of Colorado Lottery games, promotions and jackpot sizes. • There does appear to be an opportunity in further educating Coloradoans about where the Lottery money proceeds are spent.

  14. Ad Awareness

  15. Past Month CO Lottery Ad Awareness • 63% of respondents recall viewing or hearing Colorado Lottery advertising within the past month. • This is down from 2010’s equivalent wave of 69%. (n=596) Q1. In the past month have you seen or heard any advertising for Colorado Lottery games?

  16. Games Advertised Past Month – Unaided Ad Awareness Total Market • Powerball advertising has produced the strongest past month unaided recall, at almost twice the level of the remaining games. • Scratch Games, Lotto and Mega Millions follow respectively with 10-12% unaided Ad awareness in the past month. (n=596) Q2. Please list which Colorado Lottery games you have seen advertised in the past month?

  17. Games Advertised Past Month – Aided Ad AwarenessTotal Market • Almost half of all respondents stated that they had seen or heard ads for Powerball and Scratch Games in the past month. • Mega Millions and Lotto had the next highest aided Ad awareness at 35%. (n=596) Q3. Which of the Colorado Lottery games have you seen or heard advertising for in the past month?

  18. Games Advertised Past Month – Total Ad AwarenessTotal Market • The strongest performing games in Past Month Ad awareness are Powerball and Scratch Games. (n=596) Q2. Please list which Colorado Lottery games you have seen advertised in the past month? Q3. Which of the Colorado Lottery games have you seen or heard advertising for in the past month?

  19. Source of Advertising Awareness Past Month • TV advertising was the most noted channel for creating Ad awareness for the Colorado Lottery. • Billboards and Point of Sale messaging follow as leading drivers of awareness. Q4. Where did you see or hear the advertising for the games below, in the past month?

  20. Colorado Lottery Second Chance Drawings, Social Media, Website & Lottery Benefits

  21. Second Chance Drawing • Almost half of respondents are aware of the Second Chance Drawing and a similar number indicated they were likely to participate. • There is a big opportunity to drive second chance drawings in Colorado. Awareness of Second Chance Drawing Likely to Participate in Second Chance Drawing (n=596) (n=596) Q5. Are you aware of the Second Chance Drawing that the Colorado Lottery runs, which allows players to submit their losing Scratch tickets for an opportunity to still win prizes from a separate drawing? Q6. Are you likely to participate in a Colorado Lottery Second Chance Drawing?

  22. Social Media Websites Used • Almost ¾ of respondents utilize social media • 56% are Facebook users. • Social Media users skew younger. (n=596) Q7. Which of the following Social Media websites do you actively use (or visit frequently)?

  23. Colorado Lottery Website • One in three respondents has been on the CO Lottery website in the past month. • More than half of all respondents have never visited the website. • Over half of the past month website visitors noticed the website redesign. Noticed Website Changed (Website visitors – Past month) Last Visited Website (n=596) (n=192)* *Base=Respondents who have visited the CO website in the past month Q8. Which of the following best describes when you last visited the Colorado Lottery website? Q9. Did you notice that the Colorado Lottery website has changed recently?

  24. Rating of Colorado Lottery Website Design • The website redesign was widely viewed as an improvement with 57% of respondents who have seen it giving it a rating of 8 or higher on a scale of 1 to 10. Top 3 Box: 57% (n=276)* Mean Rating: 7.6 *Base=Respondents who have visited the CO website Q10. On a scale of 1 to 10, where 10 is an excellent website that offers you everything you need to know about the Colorado Lottery and its games, and is easy to use, and 1 is a poorly designed website that is difficult to use, how would you rate the Colorado Lottery website?

  25. Main Benefits of CO Lottery for the Residents of CO • 37% of respondents believe that the Lottery provides a source of funding for maintenance of parks and recreation areas and other outdoor projects. • There does appear to be an opportunity in further educating Coloradoans about where the Lottery money proceeds are spent. (n=596) Q11. When you think about the Colorado Lottery, what are the main benefits for the residents of Colorado that come to mind?

  26. Lottery Playership

  27. CO Lottery Games - PlayershipTotal Market • 78% of respondents have played CO Lottery games ever. • Scratch Games and Powerball have the highest playership. • Only 1/3 of the population have played Mega Millions. Ever Played CO Lottery Games Games Played Ever (n=596) (n=596) Q13. Have you ever played any of [these] Colorado Lottery games? Q14. Which Colorado Lottery games have you ever played?

  28. CO Lottery Games - PlayershipAmong Ever Played Colorado Lottery • Of the respondents have player CO Lottery games, three out of four have played Scratch Games and/or Powerball. • There remains a big opportunity to increase trial in Mega Millions. Ever Played CO Lottery Games Games Played Ever (n=596) (n=462)* *Base=Respondents who have ever played CO lottery games Q13. Have you ever played any of [these] Colorado Lottery games? Q14. Which Colorado Lottery games have you ever played?

  29. Games Played In …TOTAL MARKET • 68% of total respondents have played CO Lottery in the past year. • 54% had played at least one game in the past month. … Past Year … Past Month … Past Week (69% May ’10) (n=596) (n=596) (n=596) Q15. IN THE PAST YEAR, which of these Colorado Lottery games have you played? Q16. AND IN THE PAST MONTH, which of these Colorado Lottery games have you played? Q17. AND IN THE PAST WEEK, which of these Colorado Lottery games have you played?

  30. Games Played In …Among Players within each time period • Powerball has seen strong playership within the past month, in all likelihood helped by large Powerball jackpots in March & April. • Lotto still ranks as the 2nd most played Colorado Drawing game. … Past Year … Past Month … Past Week (n=460)* (n=409)* (n=317)* *Base=Respondents who have played CO lottery games ever /past year/month Q15. IN THE PAST YEAR, which of these Colorado Lottery games have you played? Q16. AND IN THE PAST MONTH, which of these Colorado Lottery games have you played? Q17. AND IN THE PAST WEEK, which of these Colorado Lottery games have you played?

  31. Outlets Where CO Lottery Tickets Purchased RegularlyTOTAL MARKET • More than half of all respondents purchase tickets at convenience stores regularly • More than one in three regularly buy at grocery stores. (n=596) Q18. From which of the following outlets do you regularly purchase your Colorado Lottery tickets?

  32. Issues Faced at Lottery Retail Stores • Almost half of Past Year Lottery players have experienced an issue at a retail store. • These issues are driven by out-of-stock Scratch Games, unknowledgeable staff or Game terminals/dispensers not working. (n=409)* *Base=Respondents who have played CO lottery games in the past year Q19. Which, if any, of the following issues have you faced at Lottery Retail stores over the past year?

  33. Reasons for Not Playing CO Lottery in the Past Year • Issues relating to lack of money available, poor odds and prioritizing other spending over lottery are the most common reasons for not playing *Base=Respondents who have not played CO lottery in the past year Q20. Why have you not played the lottery in the past year?

  34. Reasons for Never Playing CO Lottery • Issues relating to pessimistic views about winning and poor odds are the most common reasons for non-players never having played the CO Lottery *Base=Respondents who have never played CO lottery Q21. Why have you never played the lottery?

  35. Key Reasons Why Play Lottery • Of those who have played a CO Lottery game within the past year, the most common motivations to play were the chance to win money and the entertainment value of the games. • A ‘chance to fulfill my dreams’ was stated by almost half of past year players. *Base=Respondents who have played lottery in past year Q22. Which of the following are key reasons why you play the Lottery?

  36. Likelihood to Purchase CO Games in the Future • Two out of three total respondents indicated a likelihood to purchase lottery games in the future. • Only 17% stated they would be unlikely to purchase. Top 2 Box: 67% (n=596) Mean Rating: 3.9 5-point scale where ‘5’ means Definitely Purchase and ‘1’ means Definitely Not Purchase Q23. How likely are you to purchase Colorado Lottery games in the future?

  37. Scratch Games

  38. How Often Play Scratch Games • 67% of scratch players have played within the past month. (n=287)* *Base=Respondents who have played Scratch games in the past year Q24. How often do you play Scratch games? Would you say you play?

  39. How Often Purchase Scratch Game Tickets • 91% of respondents have played $1 Scratch Games in the past year • $5 tickets are purchased at higher frequencies on monthly and annual bases than $3 tickets (n=287)* *Base=Respondents who have played Scratch games in the past year Q25. Which of the following best describes how often you purchase each of the following prices of Scratch Game tickets?

  40. Amount Spent on Scratch Games… • 6 out of 10 of players spent less than $5 the last time they played Scratch Games. • 4 out of 10 players spend more than $10 in a typical month. …Last Time Played …in Typical Month (n=287)* (n=287)* Mean Spend: $10 Mean Spend: $21 *Base=Respondents who have played Scratch games in the past year Q26. How much did you spend the last time you played Scratch games? Q27. Approximately how much do you spend on Scratch Games in a typical month?

  41. Spending More or Less on Scratch Games • The greater the frequency of playership, the more likely the player will perceive their spending on Scratch Games as increasing. CD B (n=287)* (B)(n=87)* (C)(n=106)* (D)(n=90)* Note: Letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Scratch games in the past year Q28. Would you say you are spending more, less, or about the same on Scratch games, as you were a year ago?

  42. Why Spending Less on Scratch Games • Having less money available to spend is the key driver behind decisions to spend less on Scratch Games Total Past Week Past Month Past Year (n=97)* (B)(n=20)*^ (C)(n=38)* (D)(n=36)* B B C Note: Letters indicate a significant difference across player groups at the 95% confidence level ^Caution: Small base size *Base=Respondents who are spending less on Scratch Games Q29. Why are you spending less on Scratch games? Is it because…?

  43. Importance When Deciding to Buy Scratch Games • Having spare money is the key driver in decisions to purchase Scratch Games, followed by seeing the scratch tickets and also feeling lucky. Total Past Week Past Month Past Year (n=287)* (B)(n=87)* (C)(n=106)* (D)(n=90)* D CD D D D Note: Letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Scratch games in the past year Q30. Please think about the last time you bought Scratch games. Below is a list of reasons that may or may not have been important to you in deciding to buy these Scratch games. Please check whether each reason was important or not important in deciding to buy the Scratch games.

  44. Importance When Deciding Which Scratch Games to Buy • Ticket prices, the numbers of chances to win and bonus features are the most important factors in Scratch Game selection Total Past Week Past Month Past Year (n=287)* (B)(n=87)* (C)(n=106)* (D)(n=90)* CD D CD D D D D Note: Letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Scratch games in the past year Q31. Below is a list of reasons that may be important when you’re deciding WHICH Scratch ticket to buy. Please indicate whether any of the following reasons are important to you in choosing which Scratch games to play.

  45. Prize Amount that is a Winning Experience for Scratch Games • $70 is the average prize amount considered a “winning experience” across all Scratch Game players • For players in the past year, the average “winning experience” was $90 $ Prize Amount that is a ‘Winning Experience (n=287) (B)(n=87) (C)(n=106) (D)(n=90) *Base=Respondents who have played Scratch games in the past year Q32. When you play Scratch games, what prize amount do you have to win before you feel like you have had a winning experience?

  46. Multi-State Games Powerball

  47. How Often Play Powerball • Two-Thirds of Past Year Powerball players have played within the Past Month. (n=279)* *Base=Respondents who have played Powerball in the past year Q33. How often do you play Powerball? Would you say you play?

  48. Amount Spent on Powerball… • 1/3 of all Powerball players typically spend more than $10 in a month. • Almost three quarters of players spent $5 or less the last time they played. …Last Time Played …in Typical Month (n=279)* (n=279)* Mean Spend: $8 Mean Spend: $15 *Base=Respondents who have played Powerball in the past year Q34. How much did you spend the last time you played Powerball? Q35. Approximately how much do you spend on Powerball in a typical month?

  49. Importance When Deciding to Buy Powerball • Size of jackpot is the key influencer of decisions to purchase Powerball tickets, but it is closely followed by players ‘having spare money’ and ‘feeling lucky’. Total Past Week Past Month Past Year (n=279)* (B)(n=97)* (C)(n=87)* (D)(n=92)* D C Note: Letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Powerball in the past year Q36. Please think about the last time you bought Powerball. Which, if any, of the following reasons was important or not important in deciding to buy Powerball?

  50. At What Jackpot Amount Do You Begin Playing Powerball • More frequent players are less motivated by increasing jackpot sizes • Weekly players are more motivated to play in $20-30 million jackpots • About a quarter of Powerball players who have not played in the Past month wait until the Powerball jackpot hits $100m. BC CD BC BC D D Size of Jackpot doesn’t matter BC (n=279)* (B)(n=97)* (C)(n=87)* (D)(n=92)* B BC Mean Spend: 63.8 39.3 60.4 90.1 Note: Letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Powerball in the past year Q37. At what jackpot amount do you begin playing Powerball?