• by Steve McClellan  @mp_mcclellan, November 17, 2014

The New York Lottery has selected Interpublic Group’s McCann and sibling shop UM for creative advertising and media agency assignments, respectively. At least that was the word circulating among certain media vendors early Monday.

However, a rep for the lottery insisted that the assignments had not been finalized and that the review process was still ongoing.

If so, that could be good news for the incumbents — Omnicom’s DDB and OMD. The more likely case is that McCann and UM have been selected, but have not yet signed definitive contracts. It’s always possible that the agencies could fail to come to terms with the client and that the N.Y. Lottery organization could go back to alternate creative and media agency candidates to work out a deal.

The agencies were not commenting.

The selections came after parallel reviews for the creative and media assignments. Estimated annual ad spending on the account is $50 million.

According to the RFP detailing the assignments, the Lottery has an annual budget for its advertising, marketing and media services requirements of $92.25 million. Of that, $22.25 million is allocated to the creative agency assignment and $70 million to media-related services. The contract up for bid, scheduled to kick off January 15, 2015, has a five-year term for a total value of a little more than $460 million.

For both agencies, the work covers existing and new “traditional lottery products,” such as jackpot and scratch-off games but not video lottery terminals and other products under the purview of the New York State Gaming Commission.

The creative agency scope of work includes account management, strategic account planning, market research, creative development, brand metrics and advertising communications tracking, multicultural, digital, social media, direct, CRM and Web site development and management.

The media agency scope of work includes media research and strategy development, media planning and buying, multicultural media programs and ROI analysis.

The N.Y. Lottery generated nearly $7.3 billion in sales in the last fiscal year, up 1.6%.

Compensation includes both fee and performance-based components. The latter could potentially translate to a $500,000 annual bonus for both the creative and media agency, subject to a yearly evaluation and the meeting of a number of marketing and business objectives, such as brand perception and Web site traffic goals and sales.

The losing agencies have a right to protest the decision, according to the RFP.