HOW COBALT DOES SWEEPSTAKES

How do I know if I want to run a contest, a sweepstakes, rebate program, or a give-away?

Does the prize have to be expensive in order for people to want to enter my sweepstakes?

Are there pitfalls to offering sweepstakes?

What is the different between a contest and a sweepstakes?

When would a contest be better?

What are the pitfalls to holding a contest?

I sometimes see that sweepstakes are limited to people who are at least 18. Are there special issues related to marketing to children?

How do I know if I want to run a contest, a sweepstakes, rebate program, or a give-away?

The type of promotion you want to have depends on what your marketing goal is. For instance, if you want to increase your mailing list, you may want to structure a give-away. Give-aways, generally speaking, provide a gift to a customer if that customer does something (like signs up to be on a mailing list). Give-aways have a strong pull, because the customer knows that he or she will receive a prize. On the other hand, since companies have to order thousands of prizes to give away, the value of each prize is usually small. Accordingly, some customers may not find the prize worth parting with their information.

Sweepstakes are also a good way to build notoriety and mailing lists. Unlike the give-away, a customer must enter to win a single prize (or a set of prizes). Because fewer prizes are awarded, companies often will offer a prize worth a lot, such as a trip or a car.

Does the prize have to be expensive in order for people to want to enter my sweepstakes?

Not at all. Many companies offer multiple small prizes. The key to any sweepstakes is figuring out what your target market wants, expensive or not.

Are there pitfalls to offering sweeptakes?

Sure. As with any marketing strategy, the best strategy is the one that brings you your desired customer. Sweepstakes tend to attract anyone and everyone, particularly if the prize is very generalized to appeal to a lot of different people (a gift card, a car, a trip to Hawaii). Thus, some sweepstakes do nothing to attract the right customer to your site and end up costing you money. In some cases, having a contest is a better way to attract customers to your site.

What is the different between a contest and a sweepstakes?

A contest is a game of skill, while a sweepstakes is a game of chance. Games of skill require the entrant to do something (write an essay, draw a pictures, display your spirit, go on a treasure hunt, etc.). A sweepstakes is a game of chance and does not require any real effort on the part of the entrant. Both award prizes.

When would a contest be better?

There are a number of instances where a contest is a good promotion. Companies that are targeting a small and very specific audience may find that a contest suits them better. Companies that have a complicated product that requires multiple visits to the website may benefit from a contest involving the product. Companies that want to increase website traffic can have “treasure hunt" style contests, that require customers to “find" things on repeated visits to the website. Companies may find that a slogan contest forces customers to learn about their product.

What are the pitfalls to holding a contest?

Contests require each entry to be judged so they can be time consuming. In addition, because contests mandate than an entrant actively do something, the response rate is typically less than in a sweepstakes. Finally, companies should pay careful attention to the manner in which contests are scored to make certain there is no ambiguity about the winner.

I sometimes see that sweepstakes are limited to people who are at least 18. Are there special issues related to marketing to children?

Yes. There are a number of issues related to advertising to children and collecting data from children. Since sweepstakes are a form of advertising, there are fairly strict guidelines about what companies may say to entice children to enter a promotion. If the promotion is online, then in addition to federal and state laws regarding advertising to children and privacy issues, companies are also subject to the Children’s Online Privacy Protection Act ("COPPA"), which is a federal law enacted to protect children’s privacy. Companies should seek legal counsel before promoting products and games to children.