Overview of Sweepstakes
Sweepstakes, games and contests are defined by the combination of prize, chance and consideration involved in the promotion.
Prize - something the consumer receives if declared the winner (trips, merchandise, things with monetary value, things with intrinsic value.)
Chance - anything that is beyond the control of the participant (random drawing, instant win.)
Consideration - any cost associated with winning (purchasing a product, costs to participate such as text message fees, completing surveys, visiting retail establishments, telling friends, downloading files, etc.)
A lottery, which is prohibited by criminal law, combines all three of the above elements. A sweepstakes has prize and chance, but no consideration. A contest involves prize and consideration, but no chance.
Advantages of Sweepstakes, Games and Contests
- Reinforce brand image.
- Create excitement and attention.
- May encourage purchase.
Disadvantages of Sweepstakes, Games and Contests
- Can cause consumer saturation.
- May not produce measurable incremental sales.
- Can be skewed by professional entrants.
- May have high judging costs.
Source: PMA
