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Donna has over 25 years of experience in assisting brands, agencies and not-for profit organizations develop and implement a wide variety of their marketing communications needs. In 2005 she founded DDC Marketing Group which has specialized in bringing interactive promotional marketing solutions to life for many clients. Today the firm is also dedicated to helping clients integrate blogs and social media into their marketing mix. Her own blog,Donna’s Promo Talk, helps to keep marketing professionals current on today's hottest interactive promotions and trends.

Most recently Donna joined the online team at Butler Till Media Services as Emerging Online Media Supervisor. Donna is responsible for overseeing the agency’s search marketing efforts for a variety of clients as well as integrating emerging online media opportunities such as blogs, social media networks, viral marketing, mobile as well as interactive promotions.

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Online Promotions Projected To Triple, You Ready?

Written on
May 20th 2008
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by Donna DeClemente  |
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ADOTAS EXCLUSIVE — A new report was recently released by Borrell Associates which states that the online promotions category is expected to nearly triple over the next five years from $8 billion last year to $22.8 billion, surpassing all other online advertising categories (paid search, banners, e-mail, audio/video advertising). It states that as in offline promotions, most of the value of online promotions is the cash value of incentives that are given to motivate short-term sales. Sounds to me like the basic principals of promotional marketing that we all know and love.

The report also states that online display ads (Web page banners, pop-ups, etc.) have lost their luster and that spending on them has been generally flat for the past two years. They believe it will peak this year at $12.6 billion, and then begin a precipitous decline to less than half that amount over the next four years. They also state that paid search advertising is likewise facing a luster-loss and they foresee it hitting its peak next year at $16.9 billion, followed by a gradual decline.

Currently, online promotion spending is only 22% of the total $37 billion overall interactive marketing pie. Overall, promotions account for about 60% of all dollars spent annually in global marketing. The Borrell report says that the composition that makes up online promotions spending will continue to evolve over the next five years. Spending for online discounts and rebates (for example, the reduced ticket prices offered by some airlines) will continue to dominate the category, however, it will decrease in share going from 41.4% in 2007 to 38.7% by 2012. Spending on online games and contests however is predicated to grow from 10.5% of the online promotions pie in 2007 to 28.4% by 2012.

To many of us in the interactive promotions business this is great news. We now have a report that helps to confirm what we’ve known all along … online promotions, specifically sweepstakes, contests and instant-win games, produce highly measurable results. By putting the right incentive in front of the right audience, you can get them to act! So while this report may contain predictions that seem strange to some, it makes perfect sense to us promotions people. We all know that marketers today need campaigns that can provide measurable results, and online promotions are an effective way for them to achieve this.

An interactive “chance to win” promotion consists of either a random-draw sweepstakes or a contest in which the winner must provide a degree of individual skill or uniqueness (i.e. writing a song, creating a video, uploading a photograph, composing a themed essay, whipping up a creative new recipe or showcasing some degree of talent).

When considering whether to do a sweepstakes or a contest promotion it’s important to keep in mind that contests are often used to help reinforce the brand or product/service attributes along with their positioning in the marketplace. Many brand owners today prefer contests because they often can require a purchase. This enables brand owners to create a database of confirmed users, unlike sweepstakes in which “No Purchase Necessary” is a standard mandate. However, a contest does require more work then a random-draw sweepstakes, since all entries must be judged or evaluated.

What I believe is an up-and-coming trend which will help fuel the growth of online sweepstakes and contest promotions is integrating them with social media. The strategy of combining these two marketing tactics is bound to become a big part of the increase that is predicted over the next five years.

Social media, including blogs and social networks, has dramatically increased the speed and coverage of word-of-mouth, also known as viral marketing. Blogs are powerful socializing tools that connect people from all over the world and build relationships, therefore can easily get the message out about a promotion. Bloggers like giveaways and contests and integrating a chance to win promotion into their blog provides added value and excitement to their readers. Bloggers and social networks also help to spread the word quickly about an online promotion that a marketer may currently be conducting. To help get key bloggers involved with a contest promotion, marketers might want to consider inviting a few to be on their panel of judges

A survey from BIGResearch, cited in the Borrell report showed that 38% of people that were online were also watching television; more than 20% were listening to radio; 9.5% were reading a newspaper and almost 7% were reading a magazine. The local medium best positioned to take advantage of the trend could be local TV.

“Online contests, giveaways, coupons and sales of half-price gift certificates are proliferating, many of them bringing in hundreds of thousands of dollars annually and generating warm partnerships between the media company and the advertiser,” the Borrell report stated. “The utility of the Internet holds fascinating possibilities for local businesses. Local media companies that are genuinely helping those businesses grow, rather than merely selling advertising to them, are well positioned to succeed in this brave new world of marketing.”

The expansion of Internet marketing has created a strong need for local media companies to recreate themselves. They now have an opportunity to become more of a marketing partner to local businesses and those that can quickly make the shift and begin collaborations with them may see big rewards. They could even threaten some of the traditional ad agencies that work with local businesses.

The report goes on to suggest that the local media companies can capitalize on this trend by focusing on creating “promotions” for their advertisers. This may include establishing a special promotions team to develop promotional campaigns that will deliver measurable results for advertisers. These campaigns can include quarterly contests and give-always, weekly or monthly half-price gift certi¬ficate sales, “best-in-town” online voting campaigns for restaurants, dentists, ice cream parlors, golf courses, etc. Holidays and sporting events (College Bowl, Super Bowl, NCAA Tournament games, etc.) are all prime promotion periods.

An example of a local promotion cited in the report was created by WAVE-TV in Louisville, KY. The “Win, Place, Show” promotion was a contest tie-in with the Kentucky Derby sponsored by the Kentucky Lottery. Contestants were invited to choose their three favorites in order for the Kentucky Derby, the Preakness and the Belmont Stakes. The person with the highest number of points – awarded for each correct choice – won a color television.

The Louisville Zoo, another WAVE-TV advertiser, had been running a discount season pass promotion for the past six years. Its most recent promotion was a “Name the Baby” contest in which visitors to the site could enter suggestions for the zoo’s baby elephant and other baby animals. Both this promotion and the Kentucky Derby contest drove people to WAVE3.com to participate.

Another example was a contest run by WKRN-TV in Nashville, TN, in which they promoted a tie-in to the 2007 College Bowl games. The goal of “College Bowl Frenzy” was to increase page views and unique visitors for WKRN and to offer some fun interactivity for their viewers. Jamie Camp, Internet sales manager for WKRN said that the contest “puts us in touch with participants at a more personal level.” With more than 32 College Bowl games last year it was a great fit for them. The contest got about 1,000 participants, offering WKRN the chance to gain new insights into their audience.

WKRN offered their sponsor advertisers 15-second video spots on the site before the news and weather clips. Advertisers included KFC and RJ Young who were able to choose among three different level packages. These sponsors had online tile ads and displays on the College Bowl Frenzy pages. All the sponsors had the opportunity to create a sign-up survey to collect user information. They were also able to offer giveaways of their own. Since implementing contests, WKRN’s Web site traffic has quadrupled.

Local newspaper Web sites are also offering opportunities to advertisers looking for an online presence without buying standard online advertising. Buffalo.com, owned by The Buffalo News, has been running contests for advertisers since the site launched in 1999, but rather than use contests as a way for advertisers to gain sales leads, Buffalo.com offers them more as an incentive program for advertisers that place ads in The Buffalo News, and as tie-ins to events such as movie premieres.

One promotion it created was an interactive game for Basil Cars called “Hidden Treasures.” Participants could look for Basil Treasure coins in the Basil ads running in the Buffalo News and also on Basilcars.com. When they collected all six coins they could then attach them to a game board and mail them in for a chance to win a two-year lease on a car or $7,000 in Basil Bucks.

What this report is basically saying is that we need to take a look backwards at some of the basic principals of marketing that have worked for years offline (nationally and locally) and effectively make them work online. The report states three main drivers behind what they believe is the cause for the big shift to online promotions from traditional advertising.

1. Advertisers are demanding larger and more measurable returns from their marketing investments. New technologies are increasing marketers’ targeting and tracking capabilities as well as their expectations. Even within online advertising there is demand for more targeting, more measurement, and better ROI.

2. The Internet is better suited for research and fulfillment than for conveying emotion and excitement for a product. While the Internet does contribute to brand and product awareness, its uniqueness is that it’s interactive, which makes it a perfect media for promotions.

3. Online promotions are primed to closely mirror their offline counterparts. The ratio of non-ad spending to ad spending for total marketing expenditures (local and national) is 60:40. For online marketing, the ratio is 22:78. The online spending ration is out of synch because the Internet is still a relatively new medium and businesses are still experimenting with its marketing capabilities.

So while we all don’t have crystal balls that can look five years into the future, we can always look backwards. It’s an exciting time to be in the interactive, online promotions business and I’m looking forward to the next five years.



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Reader Comments.

Exactly right - great article! Merging promotions and social media is a powerful vehicle for brands, and that’s what we do at Intuwin! Here is our review on TechCrunch: http://www.techcrunch.com/2007/04/27/scratchyourself-viral-sweepstakes-that-brands-could-love/

Posted by Lilly Gold | 1:07 pm on May 20, 2008.

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