Have you ever thought about running a contest or sweepstakes, but didnt know which would fit best with your goals? Contests and sweepstakes are often mistaken as the same, when in fact they are different and serve different marketing purposes. In this article we will discuss 3 important considerations you should make when deciding whether to run a contest or a sweepstakes.
Differences between them
Before we begin, let's quickly define the differences between contests and sweepstakes. There are three possible elements to consider when structuring a promotion: prize, chance and consideration.
“Standard Lottery Rule”: Prize + Chance + Consideration = Lottery
If all three of the above elements are present in your proposed promotional plan, then one of the elements will need to be neutralized to run a legal promotion versus an illegal lottery according to state and Federal laws.
In order for a contest to be deemed legal “chance” needs to be eliminated from the mix, leaving prize and consideration.
In order for a sweepstakes to be deemed legal, “consideration” needs to be eliminated from the mix, leaving prize and chance.
What is your primary goal?
The most important consideration to make when choosing to run a contest or a sweepstakes, is which best suits your primary goal. If your main goal is to increase brand awareness, then a sweepstakes is the perfect choice because of how sharable it is and its barrier entry is low, meaning more people are likely to participate vs a contest. If your goal is to increase brand engagement, then a contest will be better suited to your goals. Since contests have a higher barrier for entry (such as a photo contest, essay contest, etc.), the people who enter your contest are more likely to be engaged in your brand than with a sweepstakes. When you break it down, the best reasons to run a contest are: High customer value participants, more brand engagement, and gathering user generated content (UGC) for future marketing. A sweepstakes on the other hand fits well with goals such as: High participation, more brand awareness, and growing your consumer database for future marketing.
While these are important considerations for deciding which promotion to run, a contest or a sweepstakes, you can still achieve goals like brand engagement with a sweepstakes and brand awareness with a contest.
What is your target audience?
Determining your target market may also help you when deciding whether to run a contest or a sweepstakes. For example, based on our survey of 2,000 people, younger people ages 18-44 are more likely to want to participate in a contest than older consumers. So if your target audience fits in the 18-44 category, a contest might have more traction than if your audience was older. Men are also slightly more likely (32%) than women (23%) to participate in a contest vs a sweepstakes.
Is your target audience busy? For example, a working mom may have less time to put towards a contest than a college student home for summer. So a sweepstakes might be better suited for that audience. These are all things you must consider about your audience before deciding whether to run a contest or sweepstakes.
What is your budget?
And finally, your budget can have an effect on your promotions success as well, so this is an important consideration when deciding whether to run a contest or sweepstakes. If you have a large budget, you can make either a contest or sweepstakes work by spending money on advertising and having enticing prizes that will hook consumers (44% of consumers hear about a sweepstakes or contest from advertisements over any other forum). However, if your budget is limited, a social media sweepstakes can be a quick and easy way to get more bang for your buck.
With these three considerations, your promotion can reach its highest potential, whether it’s a contest or a sweepstakes. If you want more promotional marketing insights like this, check out our blog for weekly sharable insights.