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Camelot is boosting its marketing spend by £15m to £70m

ahead of a burst of new product development and an overhaul of its

retail and online operations.

The rise in spend comes as the embattled National Lottery operator,

under fire from shareholders and the media for declining ticket sales,

prepares to enter its hard-won second licensing period.

The company will launch a burst of intensive activity in the spring to

back its new 'Cash for Life' Instants game.

Set to debut at the end of March, the game will award winners monthly

cheques for the duration of their life. It will be supported by

Camelot's biggest launch effort since its Instants Millionaire game was

introduced last June.

Outgoing sales and marketing director Ian Milligan, who leaves the

company at the end of February, has hired an additional 50 staff to

handle the retail overhaul, which will aim to revolutionise the in-store

look of the lottery.

Camelot will also focus heavily on developing its online offerings in

its second five-year term, for which it has pledged £1bn in

investment.

Milligan said: "Our online business accounts for 85% of sales, so that

will clearly be a part of anything we do with the main National Lottery

game."

Milligan added that industry rumours about the company looking to review

its creative account out of WCRS are untrue. "We spent a lot of time

reviewing the media and below-the-line business," he said. "We are happy

with the plans we have in place for WCRS."

However, he conceded that agency relationships would be the call of new

commercial director Phil Smith, who takes up the post on Monday.

Camelot has yet to fill its marketing director post, but recently took

on Michael Grade to replace Sir George Russell as chairman. Grade is

expected to have a significant impact on how the lottery is

marketed.

The company has placed much of its marketing and new product development

on ice over the past year, pending the start of the new licence.

Last month, it reported its third consecutive drop in ticket sales,

which fell by 5.4% for the six months to December. However, scratchcard

sales are up.

Separately, the lottery is embroiled in a contractual row with the BBC

over exclusive rights to its games, as Camelot hopes to market some

games on other channels.

- Profile, page 18.