Why it Matters: The Difference Between Sweepstakes and Contests

Who doesn’t love free stuff and being rewarded? One of the best ways to attract attention to your business is to offer the chance to win something for free. By gamifying your marketing with a promotion and giving prizes, you can incentivize your audience to make actions that drive marketing goals for your brand.

Hosting a giveaway-style promotion is the best way to boost the reach and awareness of your brand to new customers. In addition, promotions collect rich data and can reactivate your current customers. It’s helpful to understand the types of promotions you can run, the goals they support, and the different outcomes for your business. 

Promotions share many similarities and serve as great tools for marketing. Typically, there is a lot of different terminology involved. Sweepstakes, contests, giveaways, and ‘instant win’-style games are often confused together, yet it’s important to understand the difference between them.

Promotions Require Legal Compliance

The Federal Trade Commission (FTC) takes promotions very serious due to fraud, scams, and other threats to consumers. Because of this, there are both federal and state-level considerations when running a promotion.

You can find a detailed checklist of considerations to make before running a sweepstakes on our blog. We also have written about other topics such as rights management for User-Generated Content Contests. 

Fraud and scams can also impact brands as well, so be sure to view our piece on Sweepstakes and Contests Fraud.

Promotion Administrators 

There are sweepstakes agencies that specialize in facilitating the tedious parts of running a promotion, often referred to as sweepstakes management companies. For example, our company operates as a full-service agency that can handle promotion development, legal administration, and prize fulfillment. 

We’ve written a detailed blog to help you understand the services sweepstakes managers can offer, and how to select one for your needs.

The most common types of promotions are sweepstakes and contests. Sweepstakes are games of chance and contests are games of skill. The core difference between sweepstakes and contests is that sweepstakes operate by randomly selection of winners. Contests winners are selected by judges based on how they fulfill a specific criteria.

Contests and sweepstakes can both fall under the giveaway category. Both share the similarity of giving a prize away to participants, no matter how they are chosen. In addition, giveaways can be very effective at instantly delighting customers, such as our own Instant Win promotions.

With an instant win-style game, you can immediately reward your consumers with special, smaller prizes for taking or completing specific actions for your brand. For example, sending instant gift cards or rewards for creating a profile with your business. 

Essentially Instant Win games and sweepstakes are both games of chance, but Instant Win games allow you to immediately gratify your audience with smaller rewards, whereas sweepstakes tend to have a larger prize which will be awarded at a later selection time.

Deciding to run a sweepstakes or contest is heavily dependent on your marketing goals, or what actions you’d like your audience to make.

Sweepstakes winners are chosen entirely by luck of the draw and typically have an easy path to entry. With contests, you have more freedom to decide how you want your winners to be selected. Some businesses may opt to have a third-party service select winner drawings, where others may ask their fans to vote or decide. 

Contests give more room for your business to be more specific about what actions you’d like entrants to take. For example, if you’re looking to curate user generated content, you can set a criteria for your audience. This may be something as simple as taking photos with your product and upload them to a gallery for winners to be selected. 

As noted earlier, contests are excellent engagement tool and work well for crafting user generated content. A contest criteria will instruct your audience to create a piece of content in which the best submission(s) will be selected for prizes. 

Your instructions or criteria for the contest should be included in your Official Rules. These rules keep your promotion compliant,while assuring your audience that judging of entries will be fair for all submissions. Every promotion should include Official Rules. There are legal administration services available to ensure your contest or sweepstakes covers the many requirements to run a compliant promotion. 

Running contests for user generated content has many benefits, and can include things such as photos, videos, reviews, or other materials. Not only are these submissions insightful about your audience, but high-quality submissions can be used for marketing materials later on. Our platform has rights management capabilities to ensure you gather the proper permission to re-share entries later on. 

Contests allow you to build a deeper connection with your consumers and invite them to engage with your content, product, or services. In addition, selecting the right prize strategy can ensure you maximize the quality and amount of submissions you receive. Ensure that the prize(s) you offer are fair in relationship to the amount of effort users are required to take to participate.

Sweepstakes are best used to generate awareness and grow your database with new leads. They’re effective at capturing information about your audience to understand the different segments that may exist for your brand. Much of this is due to their ease-of-entry. Our PromoPick layouts typically have a simple user flow that’s designed to create a seamless user experience for participants to enter.

A typical sweepstakes generally just requires simple information such as name, address, email for entry. However, some brands have made great use of sweepstakes by using profiling questions to identify favorite products. For example, an ice cream brand may ask users to select a flavor they’d be interested in trying. This would help gather information about what product they should develop next.

Summary

A well-executed promotion can excite your audience to engage with your brand while attracting new users to the excitement of potentially winning prizes. There are many different add-ons you can layer your promotion with to drive engagement further and gather more insights about your consumers.

Defining your business goals can help decide between running a sweepstakes or contest. Sweepstakes operate best for short behaviors and select winners at random. Contests are good for a deeper interaction with your audience and allow you to have more control over what winners are selected.

As always, legal compliance is an important part of running a promotion. Be sure to partner with a sweepstakes administrator to ensure your brand runs a compliant promotion. Our promotions include legal administration with many of our full-service packages. In addition, we offer services such as prize fulfillment and strategy to handle the challenges of rewarding your consumers. 

It’s not always an easy task, that’s why Realtime Media specializes in running sweepstakes, contests and digital promotions for thousands of companies worldwide. If you need help running your ideal sweepstakes or contest, contact us today.