The Iowa Lottery is allowed by law to spend up to 4 percent of gross revenue on marketing. With sales last year of roughly $310 million, that gave the Lottery a marketing budget of up to $12.4 million.

But the state only spent about 2.1 percent, or roughly $6.5 million, according to Lottery CEO Terry Rich.

“If we don’t have a big Powerball (jackpot), we don’t advertise,” Rich explained.

But he added, “this year advertising costs are up because it’s a political year” with campaigns gobbling up much of the available airtime on TV stations and driving up costs.

Since the Lottery began in 1985 with its first scratch game, the competition for its advertising budget has been stiff. At various times, many of Iowa’s best-known ad agencies have held pieces of it.

In recent years, the Lottery account has been divided into two contracts, one for creative services and a separate contract for media buying.

This year, for the first time in a decade, one agency, Strategic America, will fill both contracts. The West Des Moines-based agency was chosen last May in a competition that included Trilix Marketing Group of Johnston and ZLR Ignition of Des Moines. The contract, Rich said, is for the two years ending June 30, 2014, with four possible one-year-extensions.

While the Lottery account is one of the richer prizes in Iowa advertising, it is also one of the most sensitive.

In addition to requiring a level of transparency that is unheard of in the private sector, Rich said, the Lottery must be politically sensitive. “Social responsibility is a key ingredient,” he said.

Lottery ads need to appeal to consumers, while being mindful of an invisible line that divides addictive personalities from the rest of the general public.

There is also a high level of unpredictability that requires quick turnarounds, Rich said.

“For example, when Powerball on a Wednesday night goes from $120 million to $150 million, the next morning by 8 or 9 o’clock we have to have all the orders in and ready to switch that jackpot amount,” Rich said. “It takes a certain size agency that has enough folks on staff to be able to turn everything around quickly.”

Strategic America has 85 employees, with 12-14 people handling media buying for the Lottery and another eight to 10 handling creative services, said John Schreurs, chief executive of the West Des Moines agency.

The agency has handled media placement for the Lottery for the past decade and added creative services last July.

Schreurs’ connection with the Lottery goes back more than two decades, to 1988 and it has been on-going ever since.

While much of the Lottery’s advertising is directed toward Powerball players, Schreurs said another challenge is making sure that Iowans understand that anyone can win and that the benefits from the Lottery are truly statewide.

One way the Lottery accomplishes the former is through an ongoing series of radio commercials called “The Winning Minute,” in which individuals who have worn $500 or more in various Lottery games are featured in spots that are delivered free of charge to radio stations across Iowa. The actual interviews are conducted by Lottery staff, “but we handle the distribution,” Schreurs said.

Lottery benefits are also touted. Since the Lottery began in 1985, Schreurs said, sales have totaled more than $5.3 billion, with $2.9 billion (55 percent) returned to players and $1.4 billion raised for state programs that run a wide gamut and include economic development, environmental and veterans programs.

The Lottery has experienced double-digit sales growth the last two years, Rich said. Strategic America’s job, Schreurs said, is to help continue that trend.