The value of sweepstakes versus a contest

For many brands it is often a common tactic to utilize a sweepstakes or contest to engage consumers and grow their marketing database.  Often, we find ourselves discussing with clients the advantages and disadvantages of both of these tactics when growing and engaging their consumers.  Here’s a brief summary

Sweepstakes – A sweepstakes is an entry based upon chance where consumers provide a variety of personal contact information in order to be eligible to win one or more prizes.  A sweepstakes can be as simple as a Text-to-Win promotion where a consumer sends a text message to a short code or accesses a web site and enters a variety of information including their name, date of birth, email address, phone number and often their postal information.  The availability of sweepstakes varies throughout the United States as states such as Tennessee, California, New Jersey and Maryland have restrictions regarding the value of prizes within the sweepstakes for their residents.  Sweepstakes can also be restricted to geographic locations as well as limited only to consumers over certain ages, e.g. over 21.

Because most sweepstakes do not require or collect more specific information these are ideal for rapid growth of a brand’s marketing database which is ideal for quantity however the quality of the entrants is often subject.  Unfortunately, there are a variety of services available where consumers can either be alerts of all the free offers and promotions available on the internet or worse, services that will auto-enter their subscribers into as many free offers and promotions as possible.  At least those consumers who visit the brand’s web site and complete the entry forms themselves have some exposure to the brand’s messaging however the users through the auto-entry solutions do not.

Most sweepstakes programs are designed to grow a marketing database allowing the brand to communicate via email or other methods after the promotion to the entrants with a variety of marketing opportunities.  Solid pre-planning should be in place to effectively measure the open rate, bounce rate and opt-out/unsubscribe rate of sweepstake entrants for 60-90 days following entry into the sweepstakes.

Contest – A contest is similar to a sweepstakes in that a consumer is required to provide personal contact information however they are also require to perform additional tasks or complete additional information in order to be eligible to win.  Common contests often require answering trivia questions, obtaining a high score, uploading pictures, sharing a story or completing other tasks like finding ideas throughout a web site like a scavenger hunt.  The availability of contests also vary throughout the United States as states such as Tennessee, California, New Jersey and Maryland have restrictions regarding the value of prizes within contests for their residents.  Contests can also be restricted to geographic locations as well as limited only to consumers over certain ages, e.g. over 21.

A significant advantage of a contest over sweepstakes is the quality of the entries.  Due to the increased effort required to be eligible within the contest, often these consumers can become stronger advocates or at least are more engaged and responsive to ongoing marketing communication with them.

It is often assumed that because the cost or effort to enter is higher with contests the overall quantity of responses is often a fraction of comparable sweepstakes.  Although this is often true, we have had a number of successful contests where consumers are required to share a story or brief information and the respondents far exceeds expectations.  In a recent contest where we required consumers to share a story on the web site or through Facebook, we anticipated 5,000 entries over a sixty day period.  The advocates of the brand were so excited about the promotion we exceeded 35,000 entries within the first four days.  Even more exciting, the quality of the entries has continued to exceed all expectations with an unusually low opt-out ratio and higher than average open rates for all communications with the new entrants.

Although most sweepstakes and contest winners are selected through random selection of qualified entries, another exciting opportunity for marketers with contests is through story or image uploads where the submissions from the entrants are then voted on by visitors to the web site.  This scenario creates a viral opportunity for consumers to share the brand with others and encourage their friends and family to visit the site and vote for them.

In the end, both sweepstakes and contests are strong tactical opportunities for marketers for growing their communication databases however long-term success should be measured against the overall quality of users who opt-in for future correspondence.
 

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