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RSSThe 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.
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You provide great insights for the potential reckless manner in which sweepstakes are being used as a ROAS (Return on Ad Spend) tool and position strategy for acquiring conversions! I have been passionate in a long career in playing lead role positions in strategy and sales specializing in online interactive retail brand media and brand sweepstakes campaigns. Online is where I feel I can make the biggest things happen for my important clients. I am a strong believer of prioritizing strategies within a multi-channel media approach. I feel compelled to add a bit more dimension to your last sentence in this great article; ‘Let sweepstakes supplement your acquisition activities, not spearhead them.’ I have an exception to what you advise here? In my experience the golden key to spearheading with a sweepstakes campaign can only work ‘IF’ you spearhead your sweepstakes campaign with substantial online reach & exposure AND integrate engaging (flash & video) consumer content interactivity call outs that relate to the consumers lifestyle. Consumers respond optimally when the campaign messaging fits in keenly with their opportunity of lifestyle benefits. Consumer content strategies can be aligned with acquisition strategies quite successfully online. Everyone wins! Many primitive sweepstakes strategies still exist, you can identify them easily - they are the campaigns that focus only on the reward structure. In fact, reward structure plays less of an affect on consumer valuation and participation when the implementation of engaging consumer content is dovetailed with relevant acquisition opportunities. Try to avoid steering consumers to focus their imaginations and interpretations on ‘Fraudulent Offer’ or ‘Fat Chance to Win’ and start engaging them in content on lifestyle benefits in your sweepstakes? The consumer’s opt-in performance and interactivity will significantly increase as well as the ROAS. Jeffrey DeArmond President www.Revedia.com Cell: 727-278-6295
Not only can they help build the brand and educate consumers on product/ service features but the data you collect allows you to deliver personalized and relevant offers instead of a mass marketing approach. The idea is to at first just get that little bit of information along with their permission. Then you can invite them to tell you more about themselves by further offering value and new incentives.
Promotions can't be done in a vacuum. It's about pulling it all together just like any other tactic that's used in the marketing mix. New technology today is making it much more cost effective to offer chances to win. Research has shown that consumers are more willing to provide some personal information for as little as a chance to win a $20 gift card.
If you'd like to learn more about sweepstakes and interactive promoitons you can vist my blog, Donna's Promo Talk: www.donnadeclemente.typepad.com