It's simple human nature. People get a kick out of getting something for nothing. Whether it's 50 cents off on a can of tuna, free shipping, or a top-to-bottom kitchen makeover, free stuff is fun.
That's why it's hardly surprising that promotional marketing is one of the most successful lead-generation, customer acquisition and retention vehicles in the online industry. Appealing to our innate love of the freebie, online promotional marketing leverages incentives such as interactive sweepstakes, printable coupons, instant-win and rich-media games, rewards systems, viral marketing and seasonal programs to entice users to take action toward a buying decision.
Play that pays
So, what do marketers get out of promotional marketing? Leads, sales and loyalty.
For marketers that want to build a quality database fast, promotional marketing is the way to go. Because the price to consumers of participation in an online promotion is typically registration information, this kind of marketing can be a great way to generate high-quality leads, with checks at many points in the process.
Participants are generally given the choice of opting-in to receive future communications from the marketer. Thank you emails are then employed to verify email addresses are valid. And advanced lead-scrubbing tools can be used to further ensure database legitimacy.
Promotions also drive sales, and there's research to back this up. Even a small incentive can make a big difference -- adding a promotional element to online campaigns has proven to increase response rates from qualified consumers. For example, a 2005 JupiterResearch study showed that the top reasons for making a purchase after viewing or receiving a marketing ad or email were the mention of sale prices and free shipping.
The consumer packaged goods (CPG) industry is known for leveraging promotions to launch new products, announce specials, and increase overall product awareness and sales. Free gifts, sales and discounts, sweepstakes, free samples and free shipping are cited as the promotional tactics that generate the highest lift in response for CPG direct marketing campaigns (DMA 2004).
Finally, a continual stream of enticing promotions is a great tool for customer retention. Promotional tactics -- including forward-to-a-friend and personalized electronic newsletters -- can help to maintain ongoing, permission-based communication with in-market customers. Consumers who have chosen to receive ongoing communications do so in general because they want to receive future offers, savings or additional game or sweepstakes entries.
A balancing act
Like any marketing tool, promotional marketing has some pitfalls -- especially around the issues of spam, privacy and fraud.
The CAN-SPAM Act of 2003 created significant barriers to email promotions. In fact, it's fear of spam that drives 73 percent of surveyed participants to delete promotional emails without opening them (JupiterResearch 2005).
Today's wary consumers are also often hesitant to provide the personal information often required on a promotion registration form.
Marketers can avoid this problem by adhering to federal CAN-SPAM compliance regulations such as including a clear and conspicuous opt-out link, a physical mailing address and a working return email address, clearly identifying the email sender and not including any false information in the "From" line or body of the email.
Incentives to forward-to-a-friend, often included in promotions to help spread the word to additional consumers, can also be problematic. Unfortunately, this type of promotion can be easily abused -- resulting in fraudulent, duplicate and poor-quality leads for marketers. This issue can also be easily remedied by leveraging today's advanced lead-scrubbing, data verification, address verification and fraud detection tools.
Improving your game
So, how can marketers get the best ROI from promotional campaigns? Research into promotional advertising shows that certain tactics deliver significantly better results than others.
Here are a few examples:
Reach far and wide: The more sites you touch, the more consumers your promotions will reach. While single-site buys often reach repeat visitors, delivering your promotions across a network enables you to reach a dynamic, unique audience on a mass scale -- while reducing your administrative burdens and costs.
Get rich, quick: The 2005 eMarketer report "Rich Media -- At the Tipping Point" revealed that consumers are more likely to purchase a product after viewing a rich-media ad than a non-rich media ad.
College students are a great case in point. They represent the largest growing online population and are recognized by the Promotional Marketing Association as the demographic most likely to respond to a promotional effort. They're web-savvy, and they love online instant-win games and interactive sweepstakes, but they won't respond to just anything. Increasing the use of rich media immediately increases potential consumer response in this demographic.
The good news for advertisers? In December 2004, nearly 70 percent of US publishers supported rich-media formats, and that number is on the rise.
Reward good behavior: Promotional campaigns are excellent candidates for behavioral targeting. They can target a desired audience to generate in-market leads; for example, a promotion for baby food coupons can be targeted to consumers who have visited a website for new parents. And by targeting ads to your promotional microsite visitors, you can then remarket to an already-engaged audience with specific products and services.
Prize it right: Matching your reward to your target audience is critical. For example, marketers promoting a new baby product are wise to offer prizes such as a new minivan versus a convertible coupe -- because one can assume that most registered leads will be parents of (or expecting) at least one child. Know your customer, and you'll get better results.
Track and tweak: Most promotional campaigns are time-sensitive, and today's tracking and reporting techniques enable marketers to monitor and adjust campaigns in real-time, ensuring the maximum number of qualified responses. Marketers who take advantage of these tools to monitor response rates by demographic, time of day, day of week, URL and other criteria can continually hone their campaigns for optimal effectiveness.
Qualify, qualify, qualify: Advanced lead-scrubbing tactics such as data verification, fraud detection and address verification help raise the overall quality of leads generated by your promotion. You might also require that participants supply both their ages and dates of birth so that you can verify eligibility for age-restricted promotions.
Becoming a promo pro
Promotional marketing is nothing new, but it is constantly evolving, thanks in part to potent ROI boosters such as network advertising, behavioral marketing, rich media and more. Offer the right prize for your specific audience. Take advantage of the latest tools for tracking, reporting and lead scrubbing. And capitalize on new technologies -- your campaign is bound to be a lucky winner.
Nada Stirratt serves as senior vice president and general manager of Advertising.com's national sales efforts. In this role, she oversees Advertising.com's extensive advertiser and agency relationships and is responsible for the company's award-winning advertising sales team. Nada previously led Advertising.com's publisher operations and was responsible for the growth and development of the company's advertising networks.
Prior to Advertising.com, Nada was vice president of business development at America Online, Inc. She has also served as senior vice president of advertising sales for MovieFone, Inc., as well as advertising director for Conde Nast's Allure Magazine.
