AC 222 Lesson 6
Prize promotions are either...
*A contest* OR *A sweepstakes or game*
Legal Considerations in Prize Promotions
*Cannot force a purchase of a product as a condition to enter a sweepstakes* - Adherence to platform requirements, e.g. Facebook or Twitter *COPPA:* Protects the privacy of children under 13 years of age and requires parental permission before entering a sweepstakes - Cannot send emails to people that have not opted in - Direct mail (there are specific disclosures that must appear in direct mail materials e.g. odds of winning the sweepstakes, the circulation of the offer, etc.) - NY and FL state registration requirements including surety bonds or the establishment of an escrow account for the total prize value - Telemarketing regulations (if you are allowing sweepstakes entry by phone)
Considerations in Planning Sweepstakes/Contest
*Consumers are looking to win a dream, not pay bills* - If the prizes are not sufficient, the promotion may not be effective - Does the subject matter warrant a contest?
Basics About Joint Promotions & Licensing Arrangements
*Increased in their use primarily because of the cost savings and extra exposure* - Best joint promotions or licensing arrangements typically involve two partners with similar images - Joint promotions can be sponsored by 2 brands within a company OR 2 brands from 2 different companies
Licensing Arrangements
*Legal contract between two parties, known as the licensor and the licensee* - The licensor grants the licensee the right to produce and sell goods, apply a brand name or trademark, or use patented technology owned by the licensor
Sweepstakes/Game
*Promotion that asks the consumer to buy the product & random selection determines winners* - Good for getting people to gain interest in the brand
Joint Promotions
*Promotion where two partners promote their brands together for mutual benefit*
Social Media Promotions
*Promotions executed via social media channels* - Can be executed on just social media or both social and traditional media - Very cluttered, promotion has to be strategic - Typically interactive, shareable, likable, reviews, competition
Contest
*Requires a consumer to buy the product and skill determines winners* - Good for making a big PR splash and publicize entries Requires: - Real skill to complete the contest challenge - Judge(s) that are qualified to screen and judge the submissions - A larger budget because the entries have to be "judged"
Components of Prize Promotions
*There are 3 main components to a prize promotion:* 1) Prize (giving away free goods and services) 2) Chance (random selection of winners) 3) Consideration (purchase or significant amount of time) - All 3 cannot be present at the same time in the promo or it is considered an illegal lottery
Prize Promotions
*There is a prize given away* - It's about winning - Sweepstakes - Contests - Games
Considerations When Planning a Joint Promotion
- Are the partners truly synergistic; is the partnership natural? - Are their images complementary? - How and where are the partner brands sold? - Does the partnership offer additional exposure for each brand?
What can a prize promotion accomplish?
- Boost in sales - Increase in sharing/collaboration - Increase in levels of brand advocacy over time - Boost website traffic - Data collection for future communications - Database building for one to one communications - Obtain opt-ins for info & mobile alerts - Brand image enhancement - Create excitement about the brand/reinforce brand image - Ability to survey the target customer & get product reviews. - Communication of product news, benefits, etc. - Interaction with the target customer in a pleasurable, fun, entertaining way - Support of the promotion by the trade - Brand differentiation from the competition at point of purchase
Disadvantages of Prize Promotions
- Criticized largely for the difficulty in equating their contribution to sales - Sweepstakes "junkies" can muddy up the water of entries - Sweepstakes have a relatively poor image in the minds of some consumers and professionals making their use obsolete in those cases
Basics of Prize Promotions
- Designed for longer term brand building and data mining - Have a controlled liability for manufacturers. - Provide a platform for major marketing push to support the promotion
Disadvantages of Social Media Promotions
- Difficult to measure their impact. - Corporations are not totally up to speed on the value of social media and its ability to generate positive ROI - Results can be marginal because there wasn't enough exposure of the promotion - There is a misconception that social media promotions are a new breed of promotion and you just "do them."
Changes in Loyal User Behavior (Price Promos)
- Good for cross selling (2 products tied to the sweepstakes) - For immediate consumption
Advantages of Social Media Promotions
- Have an advantage to be executed in a viral way thereby capturing new viewers - Typically a high degree of interactivity between the customer and the brand thereby increasing consumer interest in the brand - Can reinforce brand imagery - Can build a community and foster brand advocacy through on-going executions
Contest Disadvantages
- Must obtain permission to use content if it is copyrighted - Must screen entries prior to posting them online
Disadvantages of Joint Promotions & Licensing Arrangements
- Process of setting up these partnerships/arrangements is cumbersome and must be handled with care - Execution of the actual promotion is more labor intensive because there are more people involved - Match of partners is a tricky business as a bad match can have adverse effects on both brands
Advantages of Joint Promotions & Licensing Arrangements
- Shared costs for advertising & handling of the promotion - Enable partners to build on the each others' customer base - Open the possibility to be seen by new customers - Risks are shared between 2 parties - Partners can gain beneficial support from the positive brand equity of each party
Changes in Switcher Behavior (Price Promos)
- To get them to switch to you - Entry should be quick
