How to master prize promotions and boost engagement

Prize promotions, such as prize draws, competitions and in-pack instant wins, have long been at the heart of the fmcg sector. 

On the one hand, we have the regularly repeated long-term campaigns. For example, this year sees the 12th annual ‘Hunt the Cadbury Creme Egg’ promotion, which gives people a chance to win up to £10,000 if they find a special egg.

On the other, we have one-off tactical activities such as the Walkers’ ‘Win £250 every hour’ promotion. Other standout examples include Pepsi’s Gold Can Campaign of 2023 and one of my personal favourites of old, Frijj’s ‘Win Warren for a day’ (yes, you actually won a man for the day to do as you pleased!). 

However, running promotions is not simply a case of having an idea and rolling it out. There are a number of factors to consider: you need to choose the right mechanic for the right objective, get the correct type and number of prizes and ensure compliance with the latest laws and best practice.

Many marketers accidentally skirt around the legal issues when laying the foundations for their campaigns. While it is fine to be creative in the concept, the world of compliance can be difficult to navigate, so it’s fundamental to tread carefully at every step – all the way from planning to implementation.

We’ve analysed more than 400 consumer prize promotions to assess the level of engagement with different prize mechanics. The results provide some vital tips for marketers looking to improve their ROI.

Bigger isn’t always better

Perhaps surprisingly, one of our key findings was that bigger prizes are not always better. One might reasonably assume large sums of money will entice consumers into a promotion. However, we found little correlation between raising the value of a prize and increasing participation.

In fact, the most effective value of a prize was between £1,000 and £5,000, so it turns out food and beverage brands don’t need to offer more than £10,000 on a single prize to get the consumer’s attention.

Rather, it is the interplay between the number of prizes on offer and their value that is important to push. More prizes offer consumers an increased chance of winning and it is this, not the absolute value of the prize, that helps builds participation and reach.

But what should you offer as a prize? Food and beverage brands should note cash is no longer as attractive as gift vouchers, holidays and event tickets, or physical prizes such as tech gear. Perhaps it is because these prizes provide individuals with a tangible item and a strong memory that won’t get lost in the weekly budget.

The type of prize has a major impact on participation rates, so choose carefully. Interestingly, football-related prizes were bottom of the league and the least-favoured prize of all. Perhaps this is a watchout for brands looking to run football-related prize promotions in the lead up to the Euros this year.

Choosing the right mechanic

The choice of mechanic can directly affect your play rates. If competitions involving a game of skill or judgement prove too difficult, play rates will drop. Meanwhile, a daily prize draw will see play rates shoot up, but the level of engagement will be less. Consider all factors carefully.

Our analysis of those entering prize promotions also revealed an interesting trend. There is a strong correlation between someone’s level of wealth and their participation in a prize promotion, but in a direction that may surprise you.

Specifically, the wealthier demographics seem to be the most likely to enter into prize promotions, up to a certain point. Luxury and high-end retailers can clearly benefit from using prize promotions, as it’s a proven and effective method of engaging with those on affluent incomes. It just goes to show people of all types love to win.

Where’s the risk?

For all the good prize promotions can achieve, running them still carries risk: fraud, abuse, unexpected costs and complaints are all too frequent. It is vital brands ensure the fairness and integrity of their promotions. When it goes wrong, it can be devastating – with financial and reputational damage.

However, with the right mechanic and a knowledgeable compliance partner in place, prize promotions remain one of the most cost-effective marketing tools and a valuable way to gain sales, consumer data and trade support. If your approach is versatile, data-led, and effectively customised, it’s bound to flourish.