As president of the Advertising Association (AA) and UK chief executive of Camelot, Andy Duncan is not one to shy away from the word ‘responsibility’. In fact, in his role leading the business that runs the National Lottery, he describes himself and his team as “stewards of a national asset”.
In his AA role, too, the word has resonance, as the body is set to address the topics of responsibility and ethics at its annual LEAD conference next week.
Though the AA has recently focused more on promoting the positive contribution of the £100bn advertising industry, debates around advertising featuring fatty foods, pay day loans, e-cigarettes and gambling are on the rise, so at LEAD 2015 Duncan isn’t taking any chances. His aim is to get ahead of politicians angling to change the rules on self-regulation and examine what the industry needs to do to protect this regime.
“Advertising affects the citizens in society as much as it does the economy,” says Duncan. “Ultimately we have a great privilege in self-regulating the industry [via the Advertising Standards Authority, the ASA] and it has been done very successfully for over 50 years. The challenge is, if we are going to continue controlling our own destiny, we have to stay in tune with society and what the public as a whole expect.”
Politicians’ stances will certainly become clear as the election nears, with the opposition Labour Party expected to promise a 9pm watershed for advertising of fatty foods in its election manifesto. Last week, the Labour Party announced that, if elected in May, it will seek to set limits on the fat, salt and sugar content of foods marketed to children, while a 9m watershed for advertising such foods on TV is also a possibility.
Duncan says: “It’s a quicker win sometimes to interfere with the advertising rather than deal with the policy issues. There is short-term political opportunism that some of the parties might not be able to avoid getting in to.”
‘Short-term’ is not in Duncan’s vocabulary as he eyes the future of self-regulation and the threat of intervention, and not just from the UK.
“I think if we collectively get ourselves organised and work out ways to deal with these issues ourselves then the last thing we need is government intervention. If we don’t there could be a serious intervention over the next few years and certainly over the next few months. There’s a danger at the UK government level but also at EU level with the data privacy debates happening at the moment.”
As UK chief executive of Camelot the twin tasks of business growth and social responsibility are second nature for Duncan. The National Lottery, which celebrated its 20th birthday last year, has two purposes, as its recent campaign ‘Play makes it possible’ highlights – to get more people playing the game and to fund good causes through its profits.
The company has paid out over £53bn in prize money to players since its launch in 1994 and handed over £32bn to good causes in Britain.
The business model of Camelot might differ from other industries but the principles are transferable, according to Duncan. “It’s not just what you do that is your business but how you go about doing it,” he says.
“Even if you are a retailer there to maximise money for the shareholder I still think it’s the way you go about doing that. If you look at the ones that have been successful they tend to have a strong narrative around the way in which they do business.”
Duncan cites his former employer Unilever, where he started his career and spent 17 years in various executive roles, as a good example. He also feels a similar sense of purpose is in place at the BBC and Channel 4, where he was marketing director and chief executive respectively – though with some notable differences.
“If you take the BBC, it has a public purpose but it’s quite bureaucratic, political and not that commercial and Channel 4 was a hybrid, commercially very strong but for a very clear public purpose,” he says.
If his background has taught him anything it’s that organisations need to be aligned behind their objectives, a skill that he will utilise when calling for the industry to work together in maintaining self-regulatory privileges when he switches hats for the LEAD conference next week.
“Too many people think of marketing as strategic or creative. I believe when you marry those together it is incredibly powerful”
Duncan says: “I don’t like organisational politics; the media world tends to have a lot of it. One of the things Camelot is good at, and I want to make sure we get better at, is not having politics. I’m a great believer in having an aligned organisation where everyone is pointing in the same direction.”
He says this in spite of the fact that he is one of two new CEOs at Camelot. After 14 years, Dianne Thompson, who was awarded a CBE in the New Year’s honours list in 2014 for her services to business, stepped down as Camelot CEO in October last year and upon her departure the company separated its UK and international arms.
Camelot’s chief financial officer and strategy director Nigel Railton stepped up to become CEO of Camelot Global Services Limited, a business-to-business operation that provides lottery services to governments and lottery operators around the world.
Duncan says: “There is a straightforward synergy in that the more successful the UK is and the more we achieve our strategy the more that gives the fuel and the ammunition for Nigel to sell that around the world. My focus is 99% on how do we grow the national lottery in a responsible way in the UK.”
During the first half of the 2014-15 financial year, National Lottery ticket sales were £3.5bn, an increase of £158 million compared to the same period in the last financial year, partly because of a doubling of the price of a Lotto ticket to £2. It reversed a long-term slump for the flagship prize draw. Camelot also generated £867m for good causes during that period and enabled more than 450,000 individual awards of funding across the UK.
A large part of the company’s future growth will depend on a significant digital transformation. It’s something Duncan has done several times before, having launched the digital TV service Freeview and Channel 4’s on-demand streaming site 4oD.
“Camelot is going to be going on that journey in the next few years,” he says. “The world we are in is going to become disrupted and transformed so some of that [career] experience is highly relevant.”
There are three key ways that Duncan believes Camelot will continue to grow and digital at the heart of the strategy.
He believes that player relationships are the company’s “weakest area” and he is looking to turn that into a strength, using digital to understand the National Lottery’s audience and serve them with relevant and targeted communications. “Developing individual player relationships is one biggest opportunities we’ve got in the next few years,” he says.
Innovation in digital games and developing how consumers access them is another strategy for Camelot, having launched a new mobile platform in 2014.
This also has synergy with Railton’s global role, Duncan says: “The mobile platform we introduced last year will be of huge [importance] and the more we are leading the world with what we are doing in the UK in terms of digital lottery, the more attractive that becomes for other lotteries around the world.”
Third is a continued focus on the ‘Play makes it possible’ proposition and getting that message across more powerfully, promoting the combination of winning and supporting good causes. Duncan believes that most people are currently only “partially aware” of where lottery money goes and how people can apply for money.
Duncan believes that if Camelot can achieve all three of these things, “there is a very good chance we will continue to grow”.
He adds: “A lot of what we need to be good at here is the same as every other industry, whether it is media, consumer goods or telecoms. Some of the principles of running a business well, leadership and marketing don’t change.” (See ‘Andy Duncan on marketing’, below.)
The company has a clear aspiration to become the world’s leading digital lottery and believes that in many ways it is already better than competitors. “Our aspiration is to be best in class relative to any other industry,” says Duncan. “When it comes to best digital and mobile practice we should be up there among the very best.”
As much as digital has affected the way that Camelot keeps up with the competition and will be vital in player relationships, it’s also about what The National Lottery stands for and being able to keep these consistent. Maintaining the statistic that 70% of UK adults play the game is high on the agenda in the coming years, as well as attracting the younger audience.
“If we can continue to be a relevant proposition for over 70% of adults in Britain, that would be phenomenal,” says Duncan. “It’s about making sure our existing players remain satisfied but it’s also about engaging a new generation coming through. We have to remain relevant to the wider audience but also the younger generation.”
Duncan believes that the ‘good causes’ message of what The National Lottery funds, including sports, the arts, culture and local community projects, will resonate more with younger audiences as the older generation take it for granted or find it less interesting.
However, Duncan says: “If in five to 10 years time we still have 70% I’d be pretty happy with that.”
Andy Duncan on marketing
“At the very heart of Camelot is a marketing approach because ultimately it’s about understanding the public, what they want and remaining relevant.
“Think about the journey The National Lottery has been on. If you go back 20 years, when we first started it was one game on a Saturday night and that was it. Now we have two nights of Lotto and two nights of Euromillions and Thunderball, Hot Picks, a whole portfolio of draw-based games, scratch cards and the instant win games online.
“There has been an innovation in games that has been about understanding different consumer tastes and ultimately offering more of a choice depending on how people want to play. When we first started we were in 10,000 retail outlets: we are now in almost 50,000 and you can play online and on mobile.
“Therefore, the idea of having targeted communications is important. The life-changing proposition, either by winning money or benefiting from good causes, is the type of brand proposition at the heart of everything we do. We are stewards of a national asset but at the same time to do that really well we have to be very marketing- and consumer-led in what we do.
“Marketing is also about some of the classic principles of marketing that have gone unchanged for 25 years. It’s about insight and understanding your consumer, it’s about having the ability to be very strategic and creative.
“Marketing at its heart is still about both. Too many people think of marketing as all about the strategic side or only about the creative. I am a passionate believer that when you marry those two things together it becomes incredibly powerful.”
Duncan was involved in the development of both I Can’t Believe It’s Not Butter and Flora Pro-Active. A highlight for the Flora brand was securing sponsorship of the London Marathon, which was initially a three-year deal.
The competition went down to the last two, with Flora beating out today’s sponsor Virgin. Duncan says: “We won because I promised to put in an extra £1 million a year of investment and that went on to last for 14 years.”
While at the BBC, Duncan led the consortium of broadcasters that launched Freeview, the free-to-air digital TV service that is now in 20 million homes.
“Having come from the commercial world made a massive difference,” says Duncan. “I was able to pull together the creative and the strategic policy sides of the BBC. It was ultimately a public service project but it had commercial aspects to it, dealing with the retailers and dealing with other people in the industry.”
In launching its streaming service 4oD in 2006, Channel 4 became the first UK broadcaster to put all of its own commissioned programmes online.
While Duncan was CEO, Channel 4 also relaunched E4 on Freeview and More4 online, with the aim of building a multichannel portfolio. Duncan says: “Channel 4 was a time of real creative and strategic success. TV share went from 10% to 12% and we won 14 Oscars [through Film4 Productions], which wasn’t bad, with Slumdog Millionaire winning eight.”
Duncan’s highlight at Camelot is the relaunch of Lotto in October 2013; the brand is back into sustained growth for the first time in 10 years. He also cites the company’s new digital mobile platform launched in 2014.