Updated: Jun 10, 2019
Did you know that the average user spends as much as 2 hours 30 minutes on a contest app? That is the power of contest marketing today and most marketers are keen to jump on the bandwagon. However, there’s a whole range of promotions that involve consumers these days — from sweepstakes to contests to giveaways to lotteries. Sweepstakes and contests are the two most commonly run promotions. However, most people do not understand the difference between the two terms and even when to use them. As a marketer, you need to understand how contests and sweepstakes differ from each other and which one is more appropriate for your product and your current marketing goals. An understanding of the difference not only helps you choose the right promotion but also helps you articulate it to your audience in the right way.
The difference between contests and sweepstakes
When it comes down to it, the major difference between contests and sweepstakes lies in how people enter and how the winners are selected.
What is a sweepstake?
To put it simply, a sweepstake is a game of chance. There are three things that are very important for a promotion to be defined as a sweepstake.
1. Its method of entry should be free from consideration.
Consideration refers to both monetary and non-monetary consideration. In other words, you cannot require an entrant to purchase a product or pay a fee to enter the sweepstakes. At the same time, you cannot ask a person to put any effort or skill into entering the sweepstakes either.
2. Sweepstakes is essentially a game of chance.
In other words, the method of determining the winner is completely random. This could be a random drawing from received entries or an instant win which has been pre-programmed randomly.
3. There should be a prize or prizes to award
The prize is the reason people enter the sweepstakes. The prize has to be clearly described along with the rules of the sweepstakes. Different countries and even different states in the same country have different rules about the legality of sweepstakes. In Florida or New York for instance, if your sweepstake exceeds $5000, bonding and registration are mandatory.
Sweepstakes are mostly used to either grow your customer database or build brand awareness. The goal is to keep the sweepstakes as simple to implement and easy to enter as possible. From a consumer’s perspective, all they need to do is provide some basic information (name, email id, etc) in return for a chance at winning the prize. Many marketers also use the entry form to include an opt-in for the company newsletter and get subscribers in the process.
Sweepstakes usually have a threefold outcome when executed properly. In the first place, the customer is excited about the opportunity and shares it with their networks. Secondly, they go one step further and visit your online/offline store to make a purchase. Thirdly, you have a qualified lead for your company database.
What is a contest?
Unlike the sweepstakes, a contest is a game of skill. For a promotion to be a contest or competition, there are three important elements.
In the sweepstakes, you cannot ask for any form of consideration so that everyone has an equal opportunity to enter the sweepstakes. In a contest, this is not required at all. In fact, non-monetary consideration is a must to enter a contest. All participants have to put in some kind of effort to enter the contest. This depends on the nature of the contest and can range from displaying artistic skills to writing to performing physically challenging activities. You can also require participants to purchase a product or pay an entry fee to enter the contest. This makes contests a great idea for brands who want to increase product sales as part of the campaign. Unlike sweepstakes, contests also provide the opportunity to share the entry to generate further engagement.
Unlike sweepstakes where only luck matters, contests are all about skill. Therefore, to hold a successful online contest you need to judge every contest entry based on predefined criteria. All entries have to be judged equally irrespective of the number of entries. Additionally another criteria to select winners can be based on popularity through public voting. This gives contests the extra dimension to allow the general public to select winners or finalists.
Like sweepstakes, contests also have a prize at the end. However, unlike sweepstakes which are fairly easy to enter, contests actually require a fair degree of skill and effort from the participants. So the prize has to be commensurate with the effort in order to attract a high degree of participation.
Contests are used primarily to build engagement with a product or service and also provide the opportunity to leverage the entry content for your own marketing or general business requirements. In many cases, online contests ask consumers to create a piece of content on a particular theme that’s related to the product in some way. The content may be a testimonial video, an expressive image, or even an essay. Lately, user-generated videos are becoming one of the most popular content formats for online contests. It is very powerful to leverage user generated content for your own marketing campaigns or promotional material for your product or service. There are actually tools now available that help you manage your online contests and make the most out of them.
While creating an online contest it’s important to make sure that the criteria are outlined in the rules and that all entries are judged vis-a-vis the same criteria. The content generated through online contests gives you excellent insights into your most loyal customers and can be used in marketing campaigns. Of course, it’s important to make sure that the reward at the end of the contest is commensurate with all the effort participating will be putting in. This is the most effective way to encourage widespread participation.
Sweepstakes or Contest: Which promotion should you run?
Neither type of promotion is superior to the other. The promotion you run should depend completely on the stage of your product and your immediate marketing goals. Sweepstakes are relatively simpler to implement and can reach a wide audience of entrants faster. Contests, on the other hand, are more intimate and create a much higher level of engagement. This can be further amplified by using general public voting and allowing entrants to promote their entries leveraging social platforms. If your objective is to generate brand awareness directly with entrants and grow your database quickly, sweepstakes is the right choice. On the other hand, if you want to engage customers (both entrants and voters), create more sustainable impact and create user generated content that you want to reuse for your own marketing purposes, contests are your best bet.