Camelot is planning to boost the marketing budget for the National Lottery by at least 15m this year to ward off increasing competition and possible declining interest in its Instants scratchcard games.
The Lottery operator, which yesterday announced pre-tax profits of 10.8m on sales of 1.19bn, says it spent 34m on marketing and advertising between the launch of the Lottery in November and the end of March.
Director of finance Peter Murphy says: “We will be increasing our marketing and advertising budget as a whole because we have to maintain interest in the brand.
“We will be launching a scratchcard game each month and need ongoing television advertising.”
He says the marketing and advertising budget for the financial year 1995/96 would be set at over one per cent of sales, expected to top 5.2bn in the year.
This will result in a budget of more than 50m.
Murphy says that experience in other countries shows that the interest in the scratchcard games could decline after the initial flurry of interest.
For this reason, marketing and advertising expenditure has to be held at an aggressive level, he adds.
The advertising contract with Cordiant runs for under five years, though Murphy says there is no reason to believe the account will be put up for review.
But he stresses: “We would make an assessment at that time. We operate on very fine margins and cost is an important issue. However, you can’t divorce costs and quality.”
He says that the National Lottery has now become the largest lottery in the world.