Can Online Contests Benefit Your Business?

By Joe Issid
Monster Contributing Writer

Let's face it, we've all been lured into entering online contests or sweepstakes that offer a wide range of (potentially) lucrative prizes. With so many companies regularly organizing contests, it can often be difficult simply keeping up with them all. With prizes ranging from free chocolate bars to paid beach vacations, it is easy to see why the more extravagant contests can attract a huge number of entries. Assuming no foul play, the benefits are easy to see for the winners of said contests. However, on the other hand, what benefits does the organizing company reap for giving away free stuff? And can the success (and failures) of contests be measured in a useful way?
Define your goals
Contests or giveaways or sweepstakes have been a go-to staple for marketers for decades. With the advent of the social web, reaching large and targeted audiences has been made all the more realistic – even on a budget. And the ability to generate marketing rich data is invaluable in determining the goals and outcomes of these campaigns. While it has never been easier (or inexpensive) to run a global contest, the same age-old tenets stand true: define your goals before executing anything. Regardless of the advanced tools that are available today, determining the business goals of running a contest is essential before any prizes are set aside.
Target your audience
The advent of the social web has made it infinitely easier for marketers to define and target their desired audience. A platform like Facebook has made it possible to isolate very specific groups of people based on factors such as age, gender, location and personal interests. With this immense data available at the click of a few buttons, marketers are able to maximize the potential impact of their campaigns by targeting the people that are the most likely to respond favourably. The impact that this data wields over the contest is immeasurable. A well-defined advertising strategy can be the difference between a successful contest and one that falls flat.
Don't focus on the wrong numbers
When I first began running online contests, my initial strategy was to cast a wide net and to try to attract as many people as possible to enter. After all, the more the merrier, right? With the right prize, it was fairly easy to get virtually anyone to sign up for the contest. And it was extremely easy to ask these people to 'Like' a Facebook page or to follow me on Twitter as a condition of signing up for the contest. As such, I was able to get an additional 1000 Facebook fans, literally, overnight. Fantastic! However, I came to realize that, as soon as the contest ended, I would lose a good chunk of these new fans as they were solely interested in winning free stuff rather than embracing my brand. While I was thrilled to report that I had accumulated a great volume of new fans, the reality was that the majority of them had little interest in me beyond the contest.
Measure engagement
While I was able to retain a good number of followers by running a contest, I was unable to effectively increase overall user engagement. And in the world of the social web, engagement is king. Effective contests engage their followers and deepen the connection that they have with the brand. The more you can capture the interest of your followers, the more personally invested they will become. And the more invested they are in your product, the more they will assist you in marketing it to their connections. There is no strategy as powerful as having your customers perform your marketing for you. Marketers often use contests to measure the "virality" of their followers and to determine how valuable such marketing strategies could be in the future. Having a viral follower base is one of the single most valuable assets in the online sphere.
An invaluable data source
A contest can be an incredibly cost-effective way of performing a form of market research. Let's say that you are launching a particular product into a specific marketplace, an online contest could be a great way to inform your clients and to begin generating consumer interest. The social web (and Facebook, in particular) can provide an incredible insight into consumer behaviour and extracting analytics from these contests has become a critical component of any marketing strategy. Having the data to guide your marketing investments is, simply put, necessary. Without this type of information, budgeting marketing strategies would be akin to throwing darts while blindfolded.
Of course, with accessibility comes saturation. With such a low barrier for entry, the social web is drowning in contests that it is virtually impossible to distinguish one from the other. So, how do you make yours stand out? Offering an irresistible prize is one approach. But if the prize is too attractive, you may attract an army of prize hunters with little interest in your brand. Offer too small a prize and you may not attract anyone. Fortunately, there is plenty of data out there to help guide the way.