Giveaways cost much less than most forms of advertising — especially if you make or sell products, or can get a sponsor to give you a prize — and they can boost your social following and increase traffic to your online site during the giveaway period. After all, everyone loves a freebie!

But are giveaways really a good method of promotion?

Before we get into the darker side of giveaways, let’s discuss the different types. Here in the United Kingdom (UK) we use the terms “competition” and “giveaway” interchangeably to mean any form of a free prize. In the United States, however, there are three distinct forms of giveaways:

Sweepstakes — Giveaways where the winner is chosen at random.

Contests — These are when some level of skill is required to enter, such as making something.

Lotteries — Anything you pay to enter. These are highly regulated, so do look into it further before running this kind of giveaway.

Giveaway regulations can vary from country to country, so it is worth checking which laws will apply to yours before you launch your giveaway.

This form of business promotion can be great for reaching more people with your brand, but you have to be careful that they don’t attract the wrong type of customer. Until I started running giveaways back in 2010 I never realized there are whole communities out there dedicated to competitive competition entering! They share details of competitions — along with the answers — on their forums or in Facebook groups and compete with each other to see who can win the most prizes. It doesn’t seem to matter whether they actually want or need the prize because they can just sell it on or trade it with their follow compers (as they call themselves). It’s the actual winning that counts to them.

British online sewing shop Weaver Dee said they find the serious professional compers tend to tweet relentlessly about giveaways so that can help you spot them and weed them out.

As I recently found out when I got more than 40,000 entries into a competition that would normally attract a couple hundred, people now pay for automatic competition entry sites, which enter competitions on their behalf using automated software.

However, it’s not all doom and gloom. Competitions can be beneficial as long as you think them through first. The key is planning.

Reaching the right people

Generally, when running a giveaway, you are either trying to reward existing customers or attempting to attract new customers. The first audience is much easier to reach, as many of your customers will already be following you on social media, visiting your website or blog, or subscribing to your newsletter. You could also consider including a flyer with their orders or a link to the competition in their order confirmation.

It’s the second audience that is harder to reach. The key focus here is that you want to attract new customers who may one day buy from you — not just people who are after a prize. This requires some proper planning and good promotion on your side. You want your giveaways to entice people who are likely to order from you in the future.

Stephanie Menjivar, head of marketing for Art Gallery Fabrics, a business that runs frequent giveaways, says there are benefits to this type of business promotion.

So, how do you make sure that your giveaways will benefit your business? Plan ahead.  

What is your desired outcome?

It is best to start competition planning with your desired outcome in mind. Think about what you want from the competition. Are you looking to increase traffic to your website or online shop? Do you want to grow your newsletter subscriber base or social media following? Do you want to increase orders?

Each of these goals would lend itself to a different kind of competition. For example, if you want to encourage orders, I would suggest an entry question that makes people look through your product range to pick their favorite, perhaps with a discount code that is only valid during the competition. Hopefully, people will fall in love with something you sell and use that discount code to place an order even if they don’t win the giveaway.

To increase social media followers or newsletter subscribers, you want to make the entrants follow you or subscribe as a condition of entry. If you also ask them to share the competition on their own profile, it can help reach even more people and may lead to it going viral. To get even more traffic, you can ask a question about a particular part of your site to direct people there, or put the entry form on your site.

For new businesses, giveaways can be a great way to rapidly grow your following and establish a presence in the market.

Anthony Jaycott, head of marketing at Weaver Dee, says giveaways helped establish a social media presence for the company during its early days.

“As a start-up, we went from having no email database or social following to something pretty impressive for a young company,” Jaycott says. “We did this by offering a pretty generous giveaway, and promoting it with blogs and social media ads.”

Jaycott uses an app called Gleam. He says he chose it because he believes it looks professional and tends to make it easier for his business and for the entrants. Gleam has the benefit of synchronising easily with social media accounts, allowing the giveaway to spread very quickly and go viral. Jaycott says the only downside is that if people have any technical issues with entering he has to refer them to the app’s developers, rather than being able to resolve the problem himself.

Another popular app for blog giveaways is Rafflecopter. It bills itself as being very simple to use and has packages starting at $13 a month. Like Gleam, it can be synchronised with social media accounts and mailing lists to help spread giveaways across multiple platforms. The app also has a useful two-minute video showing you how to set up your giveaway using their software.

How will you promote your giveaway?

Your obvious starting points are your social media sites, your own website or blog and your newsletter. However, as mentioned above, that will mainly reach your existing audience.

If you are looking to reach a new audience, you could ask entrants to share the giveaway on their social platforms to help spread your reach. Most people do this by offering additional entries for entrants who share the giveaway. You could also consider paid advertising on social media, such as a sponsored post on Facebook. Make sure you check their promotion terms and conditions first to understand the limitations. For example, on Facebook, they don’t allow you to ask someone to share on their timeline to enter.

If you are running a big giveaway and have planned far enough in advance, you may want to send out a press release and try to get media coverage. You can also reach out to bloggers or news sites in your niche and ask them to help spread the word for you.

As for how often to promote your giveaway, that really depends on how long you run the promotion. I tend to run mine over three to four weeks, so I promote them every two to three days, at different times, in an attempt to reach different people. If you are running a giveaway for a short time period — less than one week — you will probably want to promote it once a day.

Avoiding the ‘wrong’ people

There are a few steps you can take to avoid attracting the wrong kind of people to your giveaway.

1. Avoid using #giveaway #competition #win #comp hashtags on social media, as these will attract the avid competition enterers who regularly search these hashtags.

2. The more effort or thought your competition involves, the more the entrant has to want the prize to enter. If you ask a simple question to enter that anyone can answer, anyone and everyone will enter. If you require some level of skill or knowledge to enter, your giveaway will mainly people who are genuinely interested in what you offer. A popular idea in the craft industry is to ask people to share pictures of something they have made. Menjivar says her company has rules that forbid shops from entering finished product contests to keep it fair for entrants, so this is something worth considering.

3. Adding a reCAPTCHA or requiring people to identify themselves in some way (such as using their social media accounts or Blogger account) will reduce the likelihood of automated or duplicated entries.

4. Well thought out terms and conditions, which disqualify automated entries or multiple entries, are definitely needed.

5. Make your prize specific to your intended audience. A $50 Walmart voucher would appeal to and could be used by almost anyone. A $50 Fabricworm voucher, however, is likely to appeal to stitchers more than the general public. One idea Art Gallery Fabrics uses to keep their giveaways interesting is to offer a curated fabric bundle rather than just a standard one, offering something unique to them.

Do you run giveaways to promote your business? Have you found them to be a successful marketing tool? Let us know in the comments below.