Sweepstakes As Acquisition Tool: What Do You Really Win?

by Jamie Schissler, Monday, April 2, 2007
A LOT OF FOLKS ARE jazzed up these days about doing sweepstakes, particularly in the context of list building. And list building is itself all the rage in the context of a shifting advertising and media paradigm. Despite the critics who think email is passé, email is hot, hot, hot. Everyone, it seems, wants an opt-in subscriber list, and they want it now.
The tides are shifting in advertising as a consequence of changes in consumer attitudes towards, and consumption of, marketing and content. Mass media is on its way out -- at least mass media as we know it. Relationship marketing is in.
Marketing and advertising are feeling the gravitational pull of a model that has at its core relationship building, individual preferences, information-based content, and dialogue. And email is the powerhouse that serves all four. Brands must develop and cultivate their own unique audience with content that contains its own value proposition. Hence the increasing necessity to develop an opt-in database.
Marketers can see the logical progression of sweepstakes and promotions: The brand gains visibility by offering consumers a chance to win prizes, in exchange for their opt-in email addresses. But let's pause for a moment to evaluate the role and benefit of sweepstakes.
First, sweepstakes and promotions are short-term, high-impact motivators. A giveaway acts like a shot of adrenaline to your marketing efforts: it creates a burst of visibility and causes a traffic spike or exposure surge, but the impact can be expensive to sustain. Sweepstakes can extend the relationship with consumers who are already engaged with your brand, but by themselves do not typically create strong acquisition returns.
Second, incentivized opt-ins tend to be less responsive than consumers who opt-in as a result of brand values and identity (service, quality, value, experience, etc). Obtaining opt-ins through a promotion or incentive channel is akin to buying a friend rather than developing a friendship. "Hey, I'll buy you dinner if you come out with me Friday night!" Sure, they may go out with you in return for the free dinner, but a relationship? Don't hold your breath waiting for the phone to ring next week. In email terms, these "dates" have a propensity to be low responders to future programs. (Be careful not to degrade your brand by conditioning consumers to an endless cycle of promotions and discounts. Once you go down that path it will take a very long time to reverse.)
Third, sweepstakes can be a costly acquisition proposition. By the time you add in prize costs, prize fulfillment, sweepstakes administration, media spend to promote the sweepstakes, creative, and execution, you will most likely wind up paying a lot more per email address than you need to. Understand what other acquisitions tactics, such as list rental and co-registration, will yield, and be sure to account for all costs when developing your acquisition strategy.
Fourth, you have to have a program to support those people who sign up. If you ask your target to opt-in to "receive valuable information and discounts," you must have a communication plan in place to deliver on that promise. Budget for, plan, and set up your ongoing email program before soliciting names. I see too many brands that develop promotion campaigns with a primary or secondary goal of acquisition, only to have to throw those names away a short time later because they have either not developed a communication plan, or have no remaining budget to do so.
Having worked in the promotion marketing space, I love sweepstakes. They should be a staple in every brand and marketer's toolbox, and I've seen them executed with tremendous success. But just as you wouldn't use a tape measure to drive a nail, sweepstakes are not particularly effective for database growth and development. As a promotional strategy, they are great; as an acquisition strategy, less so. Let sweepstakes supplement your acquisition activities, not spearhead them.
Jamie Schissler is Strategy Director at Avenue A Razorfish.