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"Dial our Prize Promotions Hotline at ext. 3033 to ask our experts two free promotions questions!"

 
 
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Frequently Asked Questions

We have provided the following FAQs to give you some background on the use of prize promotions.

If you would like to submit a question for future inclusion in this list, send it to
info@mediadirectusa.com. We will periodically pull a question we feel has broad appeal and post it here -- if it's your question, we'll send you something neat! (Yes, we'll answer your promotion question even if we don't post it, and usually within a few business days.)


What are prize promotions?
Prize promotions are part of an overall marketing and sales strategy, generally recognized as games, sweepstakes and contests, where participants have the opportunity to win a prize -- as opposed to couponing, sampling, and other types of promotions. They may be directed to a large consumer group, targeted to a specific audience, or used for business-to-business.


Why run a sweepstakes? How can a sweepstakes help me?
A sweepstakes can be used for any number of reasons: to help boost circulation, to encourage completion of surveys and questionnaires, to get consumers to register their purchases, to generate sales leads, to reward loyal customers -- the list goes on and on. Not to mention the fact that consumers love sweepstakes! And market research has shown that given otherwise identical offers, a sweepstakes or other prize promotion will elicit a higher response rate, whether it's the purchase of a can of soda, or the solicitation of a donation to a charity.

 
More ...

What's the difference between a prize promotion, and say, a state lottery?
A prize promotion consists of three elements: prize, chance, and consideration, which can be defined as money, time or considerable effort. The only promotion that can award a prize, through a random or chance offering, and require payment, is a state lottery. A sweepstakes can award a prize, through a random or chance offering, but cannot require consideration. A contest, on the other hand, can award a prize, can require consideration, but must replace the random or chance element with a skill requirement. To have all three elements in a sweepstakes or contest is a violation of federal lottery laws.


Which is better, a sweepstakes or a contest?
For sheer numbers, sweepstakes generally pull better than a contest. That's because of the ease of entry requirements (remember the "no consideration" element?). But maybe you want to focus your promotion on the benefits of your product by asking your customers to take a few extra steps, such as writing an essay, submitting a photograph, or sending in a recipe that uses your product. A contest would be a better vehicle for this, and would elicit a smaller, but more enthusiastic response. Both contests and sweepstakes are popular prize promotion vehicles -- we'll review your marketing goals and objectives with you to determine which is better for you in a given situation.


What kind of response rate might I expect to my offer?
There are so many factors that can impact a promotion's response, from the creative presentation you use, to the list of recipients, to the actual product, to the prizes you are offering. And that's only on the surface. A standard blind direct mail effort may pull 2%, but a targeted circulation renewal effort may pull up to (and sometimes beyond) 50%. The thing to remember is that prize promotions have been shown to increase most response rates.


Why can't I just run the sweepstakes out of our office (i.e., why should I call Media Direct USA)?
We frequently receive calls from companies who have decided to run their own promotions, only to find out mid-stream that they have overlooked certain legal requirements, or that they are simply not equipped to handle the administrative issues that are part of running a sweepstakes. Legal issues are perhaps the most important reason to use a sales promotion agency. At Media Direct USA, we are kept aware of the latest legal actions taking place, and we design promotions to not only work within the confines of existing laws, but to give the sponsor the maximum protection. From an administrative viewpoint, this is our business, and we have achieved efficiencies through tight procedural review. And let's not forget the credibility issue: the use of an independent judging organization tells the would -- be participant that there will be no monkey business when it comes to the drawing of winners, or the awarding of prizes.


Who uses prize promotions?
Who doesn't? Magazine and publishers, banks, packaged goods companies, health and beauty aids manufacturers, fast food chains, and basically anyone trying to gain a competitive advantage, and that probably includes your competition. And prize promotions are even being used on the Internet by smart marketers looking to gain the upper hand in this fast moving and ever-changing new medium.


I have a small company, and like the idea of running a sweepstakes, but just the cost of buying the prizes is intimidating and prohibitive. What options do I have?
Well, for one, there's the use of a co-operatively sponsored sweepstakes, such as the ones created by us. For one low cost, multiple companies can participate and spread the cost of a high visibility sweepstakes among themselves. We provide the prizes, the rules, and all administration, including registrations, fulfilling winners lists and submitting 1099s for major prize winners to the Internal Revenue Service. Our co-op sweepstakes are also a wonderful opportunity to test the prize promotion waters-you get the benefits of a proven marketing tool at a fraction of the cost.


I've heard that a sweepstakes can give me bump in my sales figures, but how does that help me over the long term?
While a sweepstakes can give you additional sales, it can also provide you with "lift." The whole idea of prize and premium promotions is lift: e.g., you usually sell ten boxes of brand "x" a week. Do a prize promotion and spike up to 20. The promotion ends, and you may drop down to 15. You do another promotion and spike to 25, then drop to 20 when the promotion's over. It ties back to product quality. Get consumers to try your brand through a promotion, and chances are they'll like it and you'll keep them as customers.


My company has four separate divisions, all of which are interested in running a promotion. Do we need to run four separate sweepstakes?
Not necessarily. We have found that promotions can be designed to take advantage of a company's various divisions. These "umbrella" sweepstakes, a concept we pioneered, allow the divisions to present a united front, and help reinforce the corporate identity. They also allow the divisions to allocate the costs according to participation. And by designing a flexible prize structure, each division can advertise prizes that best appeal to their respective audiences. The net result is that all units receive the benefits of a seemingly independent promotion, yet don't have to run totally separate sweepstakes.


We have just put our Web site up, and are looking to get more people to come to our site, and keep coming back (we're selling ad space to offset the cost of maintaining the site). Could a sweepstakes help us?
Definitely. As you no doubt have heard, one of the ways to keep visitors coming back to your site is to vary your content. By presenting new and useful information, you have taken important steps in maintaining your Web traffic. Another method is to overlay a sweepstakes and allow multiple entries, but to limit visitors to one entry per day. While you must currently offer a write-in option for entries (using and maintaining an online or email account has been construed as consideration in certain jurisdictions), allowing multiple entries helps encourage your visitors to return often, but avoids having your online entry box jammed.


I've heard that certain promotions need to be bonded. What's that all about?
Certain states (Florida and New York) require the posting by the promotion's sponsor of either a surety bond or the establishing of an escrow account if the promotion requires registration (consumer promotions offering prizes with a total value in excess of $5,000, to residents of their states, among other requirements). This is also true of promotions run in the province of Quebec in Canada. In the event the sponsor defaults, the funds are payable to the state, in order to award the prizes. The key idea here is consumer protection. Media Direct USA advises its customers on registration requirements, and assists in the process of registering promotions, as well as in filing for the release of the promotion once all winners have been determined and prizes awarded. Sponsors who run promotions in violation of these state and provincial laws are subject to fines and penalties.


Can I make sure prize winners purchase my product?
Remember, while you can request that consumers make a purchase or donation, you cannot require it in a sweepstakes. To do so is in violation of lottery laws. If you want to require a purchase, you may run a contest, but you must lose the random or chance element of the promotion.


What can you tell me about game promotions?
Well, for starters, they are extremely popular. As a child, you no doubt had a box of Cracker Jack®-remember your excitement when you went to pull out that little prize? That same excitement still helps pull consumers into fast food restaurants, automotive supply stores, encourage them to purchase a specific brand of pet food, or watch a certain television show. The prospect of winning something instantly is a powerful motivator; there is no waiting until the promotion's over to find out if you have won a prize. Of course, those prizes that go unclaimed during the run of the promotion can be given away through a second chance drawing, essentially giving the participant multiple opportunities to win!


Can I run a sweepstakes for kids?
Promotions aimed at children constitute one of the quickest growing segments today. However, due to increasing privacy concerns and heightened legislative scrutiny, it is wise to proceed with caution, especially if you want to run an online promotion. We currently work with a number of high-profile marketers targeting this segment, and are aware of industry recommendations and guidelines. We will work with you, or your agency, to design a fun and exciting promotion to appeal to kids, while advising you of potential pitfalls.


What happens if something goes wrong with my prize promotion?
It's amazing how many things can go wrong with a promotion. The use of an experienced promotion agency, however, can reduce that possibility-our trained professionals know how to plan promotions to avoid those ugly incidents, those incidents that have your boss screaming at you. And as further protection, our indemnification policy protects you from anything we do wrong in our capacity as your promotion agency.

Be sure to submit your own questions, by clicking here.

Email: info@mediadirectusa.com

 
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All material herein © 2007 Media Direct USA, Inc. , All rights reserved.