It seems that everyone is running some type of online campaign nowadays. Some of them good, some not so much. Here is our guide to running an effective and legal sweepstakes campaign online.

First off, let’s define what a sweepstakes campaign is. Sweepstakes are prize giveaways where the winners are chosen by luck. Prizes can range from stickers and t-shirts to houses, cars, and enormous cash wins.

Many people use terms “contests” and “sweepstakes” interchangeably. Technically, however, contests are giveaways that have some element of skill to them. For example, entrants need to answer a trivia question, write an essay, or create a recipe to participate.

Prizes and luck are central to sweepstakes where the winners are drawn at random. Legitimate promotions can never have consideration. That means you will never have to pay to enter legitimate sweepstakes and purchasing a product will not improve your odds.

Before you start

Take into account that some states have their own sweepstakes rules. For example: in New York one must bond prizes valued above $5000.

In California section 25600 of their Business and Professions Code states:

No licensee shall, directly or indirectly, give any premium, gift, or free goods in connection with the sale or distribution of any alcoholic beverage…

A 1999 court decision upheld that Section 25600 does apply to sweepstakes prizes meaning that alcohol as a prize is a definite no-no in California.

Borderless world

Online sweepstakes are essentially border less so they must comply with the relevant laws in all 50 states and, unless the promotion is limited to U.S.residents (or concrete state), international laws. Since there are literally endless number of different sweepstakes and prizes we will not be covering all the laws and regulations concerned.  That job we leave for you to tackle.  Before you make a campaign live be sure to go over all the relevant regulations or consult with an attorney and make sure what you’re doing is legal.

Case studies

Case studies reviewing

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Case #1 – Appsumo

Appsumo is an daily deals website for the coolest web apps and other digitally distributed goods.

This is what they say about themselves:

We are an distribution channel for companies that help entrepreneurs start, grow, optimize, and scale their businesses. We connect them to hundreds of thousands of potential new customers using email marketing, social networks, and display ad campaigns.

Their numbers are impressive. In only 18 months, it went from 0 to 500 000 customers. Today, the numbers are even more insane. Check this out:

  • 700 000+ Newsletter subscribers
  • 110 000+ Twitter followers
  • 80 000+ Facebook fans

How?

A big part of their success is, you guessed it, sweepstakes. It’s true they sell a lot of good software, guides, books etc with steep discounts. But they also regularly run sweepstakes campaigns with awards such as Fitbit One, Dropbox Pro for life, 13 inch Macbook Pro’s, Photoshop (including lifetime updates to new versions), original Kindle Fire and so on.

The way they have 700 000+ newsletter subscribers is that when you enter their sweepstakes you have to enter first your e-mail address. After that you can earn more “votes” by posting affiliate links of the campaign on social media – brilliant! Another thing to note is that all their prizes for different campaigns are in-line with AppSumo customer interests.

Case #2 – Unique Hotels Facebook Campaign

Unique hotel

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Unique Hotels is a small group lifestyle hotels located mainly in Tallinn, Estonia and Manor house just outside the city. Each are located in historical buildings and surroundings that have been updated to include modern conveniences, and each has a different character and level of service.

Objectives

  • Create brand awareness through a focused social media campaign, encouraging content sharing between users.
  • Generate leads and bookings by attracting visitors to the Unique Hotels websites with special offers.
  • Increase the Unique Hotels fan base i.e. potential customers with offers, campaigns and attractive content.
  • Create a new community channel for customer interaction, provide updates, and generate news.

Solution

  • A month-long sweepstakes campaign in Facebook.
  • Viral aspect of the campaign: The more sharing, the more points, and the greater the chances of winning in both the weekly and main prize (luxury all-inclusive weekend in Vihula Manor) draws.
  • To encourage sharing even further they incorporated three ways to collect additional points and increase one’s chances of winning – the initial ‘Like’, sharing badges with friends and subscribing to the Unique Hotels newsletter.

Results

  • Over the duration of the campaign, the Unique Hotel fan base went from 414 to 12,349
  • User engagement (any clicks on any stories) went from 2,108 to 30,944
  • Traffic to all of the Unique Hotels websites for November and December was 115% that of the previous two month’s figures (September and October).
  • The Unique Hotels mailing list went from 600 subscribers, predominantly Estonian speaking, at the beginning of the campaign, to approximately 3,000 Estonian, English and Russian subscribers.

Case study #3 – Noritz

Noritz manufactures tank less water heaters for both home and commercial use. They’re sold through various distribution channels that primarily include installers and dealers. They expressed desire to establish a way to increase brand exposure and gain the ability to directly communicate with end users to help increase the probability of a dealer/installer sale.

To satisfy that need a 12 month (with monthly prizes) sweepstakes campaign was initiated to attract new prospects, increase brand awareness, grow subscriber list and drive traffic to dealer locator tool. To drive traffic to the sweepstakes mini-site Google AdWords was used with geo-targeted pay-per-click adds.

Results

  • 45% registration rate
  • 28% referral rate
  • Substantial increase in subscriber list
  • High use of dealer locator tool

Considering only Google AdWords was used to drive traffic these are pretty impressive numbers. As with a lot of other campaigns one would get extra “votes” for referring friends via email, social media, and for the friend actually registering.

Case study #4 – Dodge

NASCAR

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Dodge brilliantly leveraged their NASCAR sponsorship to sell more cars and and built a database of new sales leads from the Northeast region.

They ran an geo-targeted (Northeast region) sweepstakes campaign on a mini-site. Traffic was driven to the site trough a geo-targeted pop-up that only showed up for customers from northeast region when they visited Dodge’s homepage. The Grand Prize winner got an all-inclusive trip to a NASCAR race of their choice.

Results included increased sales volume during the campaign and resulted 10 000+ new qualified leads on their e-mail list.

Case study #5 – IDEON

IDEON is a contract furniture company specializing in high-quality, stylish lounge seating and tables for design-minded businesses. A helpful Online Design Tool was created for the Architect + Design community to help visualize options and take creative control of their specs.

Goal was to increase brand awareness and perception of both the company and it’s Online Design Tool. As IDEON has recently formed a partnership with another company Maharam an extra goal was to announce that partnership.

To meet those goals it was decided to create a 12 week online sweepstakes campaign. For prizes there was total of 500 high-quality pillows handed out, averaging 40 to 50 pillows per week. Main source of traffic was e-mail . The promotion was sent to multiple lists: IDEON’s house list, trade show lists and lists provided by reps. They also gave extra “votes” for signing up trough friends and social sharing.

Results:

  • 24% increase in subscriber list
  • 31% referral conversion rate
  • 12% created account on the Online Design Tool
  • 43% unique open rate and 5% click through rate

Results for e-mail only campaign are pretty impressive – it’s safe to say they met their initial goals and then some.

Case #6 – Nõo Lihatööstus

Nõa Lihatööstus is a local brand in Estonia which sells different pre-packaged meat products to consumers  They had an inactive Facebook fan page with 31 fans. At the same time most of their target audience was using Facebook already – clearly a lot of room for improvement.

Objectives

  • Get 3000 new fans from target audience in 3 weeks via a campaign
  • Have e-mails of 1500 new potential customers

Solution

Create an online advent calendar app in Facebook – each day a new calendar windows would open with a picture of the brand’s Christmas products. Participants got points for clicking on the windows, sharing on their wall, joining mailing list etc. At the end of each day a random winner would be selected from the pool of participants.

Results

  • 6600+ new fans
  • 3200+ email addresses

What was the most surprising was the fact that most participants came from viral growth (shared links, which where tracked). Analysis showed that over 60% of all participants came from user generated shares. A lot over people had over 25 “points”, meaning that they had successfully invited more than 19 individuals!

Key Insights

These 2 examples are both very different from each other but they both show that sweepstakes campaigns, when done right, work brilliantly. As part of their success, both campaigns had on-going prizes for participants to keep interest alive . That momentum was key to success in both campaigns.

Case #7 – Mixergy

Mixergy offers access to insightful interviews with entrepreneurs and masterclasses for startups.

Recently they ran a campaign giving away free memberships in exchange for spreading the word. They used a landing page created with ContestDomination.

This is the data Andrew Warner shared at the end:

Landing page stats

Unique Pageviews: 13,419
Total Submissions (contest entries): 5,527
Net Referrals: 6,656 pageviews
Total Conversion: 41.19%

Twitter followers gained

Start: 10,402
Finish: 11,549
Net Gain: 1,147
Campaign generated a total of 899 tweets

Facebook likes gained for the Mixergy Facebook page

Start: 5,174
Finish: 5,852
Net Gain: 678

New people added to the mailing list

4,061

Entries from referrals (Tweets, likes, etc)?

Because how the analytics data was set up, they were unable to know for sure. Here are total traffic numbers from the top 3 social media traffic sources and the total submissions that were referral for reference.

Facebook: 1,287 visits (80.73% new)
Twitter: 558 visits (88.53% new)
LinkedIn: 246 visits (92.68% new)

Key takeaways

The contest did work and was very cheap for Mixergy to run. However, I have to say I was surprised by the modest results given that the size of Mixergy’s email list is ~45 000. Social media gains were marginal and not sure how different from normal weekly gains, but 4000+ new email subscribers is definitely a good result and also much more valuable than social media followers.

My main takeaway here is that getting people to share your contest is not a given. It might not go very viral even if you’re a relatively well-known person.

Mechanics of success

Mechanic at work

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Because of the sheer amount of different possibilities on how you can run an sweepstakes campaign and all the different platforms and rules and regulations that come with them it would be beneficial to use a specialized service or software for running the contest.  Many choices exist, depending on your wants and needs.  WildfireWoobox. Contest Domination, OfferPop and North Social are examples of a few of them.

Establish marketing goals ahead of time to achieve desired results

Sweepstakes have the potential to provide varying types of results relating to customer engagement. It may be hard to believe but different types of results require forethought to produce results – they’ll not just magically happen as an byproduct of a loosely designed campaign.

If your aim is to get X number of likes to your Facebook page then the campaign has to have an Facebook component that can only be activated once the user has liked the page and so on. That kind of tactic, App activating after user action, is also known as like-gating. It used to be possible to like-gate entire Pages but with the onslaught of Timelines that feature disappeared. It can and is widely used for Apps inside Facebook Pages though.

In short, for maximum targeted results incorporate your strategic objectives into the sweepstakes campaign structure from the beginning.

Have prizes that your target customers want

Apple products

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Just because something is free doesn’t mean that people will instantly want it. Unless you’re giving away Ipads.  Everyone wants those.  If you have an iPhone or other high value consumer electronics up for grabs chances are people will come and join in.

But, the name of the game is your target audience. The problem with having iPhones as prizes is that it will increase numbers, true, but that’s about it. Life-time value of those customers is close to zero. And you’re after people who actually care about your product or service, not random freeloaders.

Learning point here is to have prizes that your target customers want/need and that are ideally your actual products or closely related to your business, your brand and your products/services.

Provide customer incentives

With so many sweepstakes on the web, a great prize is far from enough to get people to share yours. Encourage people to share by offering additional entries for liking, tweeting, or emailing.

Analyzes of Nõo Lihatööstus’s sweeps campaign showed that people were really motivated by the fact that the more people they invited, the better were their chances of winning. Out of all the participants, 62.33% came from user generated shares. 62% is HUGE number for user generated shares.

Checklist

Sweepstakes law blog offers a list 12 things to go trough before organizing anything. Although it was primarily made for offline sweepstakes, many on this list hold true in the online world as well:

1. Is the sweepstakes limited to residents of the U.S. or one or more states or cities within the U.S.?

2. Do the eligibility requirements for entrants clearly identify the age, residency, and other requirements for entrants to be eligible?

3. Must individuals be at least 13 years old to enter?

4. Is there a way to enter the sweepstakes by simply mailing a postcard with the entrant’s contact information to the sponsor?

5. Are the odds of winning clearly set forth in the rules and are they equal for everyone who enters, including the mail-in entrants?

6. Are the prizes described precisely and do they include all aspects and details, including the Approximate Retail Value for the total prize?

7. Is the method of selecting the winner explained and is there a date and time stated for when the winner will be chosen?

8. Is the sponsor’s name, address, phone number and web address listed prominently in the official rules and on all advertisements pertaining to the sweepstakes?

9. Is the statement “No Purchase Necessary” and “Void Where Prohibited by Law” displayed in the rules and in all advertisements?

10. Is the value of prize less than $5,000?

11. Are employees of the sponsor prohibited from entering the sweepstakes?

12. Is there an end date and time listed in the rules, and are the number of entries that each person may submit clearly stated?

If your answer is no to any of them, then you should definitely contact a lawyer who is experienced with sweepstakes assistance and guidance.

3 options for making sweepstakes viral

Incentivized sharing

With incentivized share, brands put more responsibility on consumers to actively participate.  As there is incentive (more votes, chances of winning) then consumers are happy to share. Again, in the meat factories case study over 60% of their participants came from this kind of sharing.

As an example Wyndham Hotels and Resorts ran an Facebook sweepstakes campaign were the price was  3 nights free lodging in one of their hotels. After inserting e-mail address consumers were greeted with the following:

Incetivized sharing example

Soft share

With a soft share, consumers receive an reminder that they should share it with their friends and family. This is the least invasive and most polite way possible to ask for a share.

Lucky Magazine is currently running sweepstakes campaign with the main prize being Chevy Spark, after completing registration there is just a little reminder box that says SHARE:

chevy

Direct share

Direct share integrates the share call to action into the ad itself, making  it a bit in your face, but then again there are greater chances that your consumers will share it.

Example is from an recent sweepstakes run by iVillage on their Facebook page:

direct share

Mistakes to avoid

Drafting incomplete rules

“Rules are the contract with the consumer. They provide the sponsor of the prize promotion protection in the event something goes wrong in the promotion. Yes, Twitter and mobile devices offer limited text space, and nobody wants a Facebook page to be crowded with legal disclaimers. But the rules can only protect a brand if they are disseminated to the public” says Kyle-Beth Hilfer, Attorney at Law.

Not using magic words

Every sweepstakes must attach “no purchase necessary” message to any and all promotional materials with clear and readable font. If you don’t you might end up being fined heavily like happened with CVS drugstore chain.

In 2004, CVS was challenged for offering of an in-store sweepstakes — a “Trip of a Lifetime” sweepstakes with the grand prize trip to Oahu, Hawaii — in which the purchasers using a store loyalty card were automatically entered into the sweepstakes, while non-purchasers were required to go on line to enter.

Hold your followers hostage

Numbers share

Like Gary Vaynerchuk says: “The thought of brands and people putting out posts that say let’s share this (so it’s good for me and people start following me and my awareness goes up) and if you don’t I’m going to hold you hostage from me pitching you some more is insanity”

Random prizes

Like we wrote earlier – having iPhones and the like will bring in huge number of people, but that’s not always enough. Rarely do companies run sweepstakes just for sheer numbers, they run them to get good quality leads that actually care about them as a company.

Not following rules

For one thing there are several laws that all sweepstakes campaigns have to adhere to and depending on the campaign and to whom it’s directed different rules and laws apply. Depending on the platform there are more things you have to to take care of. Facebook in particular has very concrete rules – read them before hand and you’ll save yourself a heck of a lot of trouble.

If you don’t, you might end up like Cadbury and FCUK who got their official Facebook pages  in India taken offline for different violations. You don’t what that to happen to your brand.

Conclusions

Sweepstakes campaigns done right can bring you heaps of traffic, good leads, and endless opportunities for future sales as we have shown in the case studies section.  Pretty much all of the show-cased companies enjoyed the success of one campaign years after they had ended.

Then again, you have to be careful and make sure you know the rules and regulations of the country you are operating in. As well as platform specific rules.

That said, good luck in your future campaigns and please to let us know of your successes in the comments section below!

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Post written by Ott Niggulis.

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