Commercial Co-Venture (CCV) Promotions: An Overview

Q4 2011

© Gage Marketing Group, LLC 206-330-6396

Addressing Legal Compliance

Promotion Dialog: Two Key Question to Address

Sweepstakes Versus a Contest: Common Misperceptions

The Role of Prizes

Promotions and Social Media

Defining Success with Your Promotion

Corporate Co-Venture (CCV) Integration

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Gage at a Glance8

Abstract

• Presentation is a high level overview of best practices in CCV promotion strategy

• Presentation is targeted to marketing professionals for national or global brands, for whom legal compliance is essential to mitigating risk

• Skilled legal guidance is as essential for CCVs as with any form of promotional marketing

Raising Awareness through a Promotion?

• Is raising awareness of a product / service an goal?• Historically “awareness” has been the job of advertising• Advertising made customers aware; promotion gave the

incentive to take a specific action• We need to ask WHY and WHAT questions to determine

what specific behavior we should drive

We want to raise awareness with consumers. Did we address the “WHY?”

?

A Typical Dialog within a Promotion

A Typical Dialog within a Promotion

WHY? “Because we have a new product that is perfect for a consumer.”

?:-o

A Typical Dialog within a Promotion

OK, WHAT do you want the consumer to know, or do, or think about this new product?

Client: “We want them to learn about the features and benefits and be motivated to buy it.”

;-)

The client just identified the specific actions.

A Typical Dialog within a Promotion

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What are the promotions I could consider?

• Coupons• Rebates• BOGOs (Buy One Get One)• Mail-in offers• Premiums (gift with purchase)• Sampling• In-packs / on-packs / special offers• Sweepstakes• Contests

What game mechanics should I consider?

• Communal Discovery: An entire community is rallied to work together to solve a riddle, a problem or a challenge.

• Epic Meaning: Players highly motivated if they believe they are working to achieve something great, awe-inspiring, bigger than themselves.

• Lottery: Winner is determined solely by chance. Creates a high level of anticipation.

• Leader boards: Rankings of all individuals in a micro-set. For distributed game dynamics where you want many micro-competitions or desire to induce loyalty.

What game mechanics should I consider?

• Countdown: Players are given a certain amount of time to do something. Creates an activity graph that causes increased initial activity, increasing frenetically until time runs out.

• Envy: Desire to have what others have. To be effective, it must be possible for participants to see what other people have.

• Progression Dynamic: Success is granularly displayed and measured through the process of completing itemized tasks.

• Viral: Game element that requires multiple people to play (or that can be played better with multiple people)

The terms “Sweepstakes” and “Contest” are not interchangeable

Promotion Types: Sweepstakes vs. Contests

Sweepstakes and Contests are types of promotions. They are similar because they both use prizes as a way to entice consumers to take a specific action and drive behavior.

•Sweepstakes are games of chance. There are two types:– Random Draw – Instant Win…These are typically open to a broad audience

•Contests are skill-based - there is no chance involved– Criteria & judging is used to determine winners…These are typically open only to current customers/users

Prizing

• What is the role (purpose) of a prize?• A prize is the…

– Reward– “Shiny” object– Incentive– Payoff– Bonus – Etc.

…used to incent people to take the specific action. • Many will enter, few will win

Prizing Analogy

• You want your daughter to put away her toys every night before she goes to bed [Specific behavior: put away toys]

• To encourage her to take the action, you offer a “prize” [She gets to spend $5 next trip to the store]

• Your daughter puts away her toys every night [Primary objective met]

• Your child spends $5 at the store. [You are happy because the incentive worked to get her to take the specific action; she is happy because she got $5 to spend at the store]

Guidance on Prizes

• Does the prize need to appeal to the target audience? [Yes]• Does a prize need to be high-value? [No]• Are prizes the reason to run a sweepstakes or contest?

[No. The reason is to Get consumers to take a specific behavior]

• Should prizes be related to the brand/product? [Can’t hurt!]• Should prizes be front and center in all communications?

– Yes and No. We should strike a balance between:• The product / service / brand • The specific action • The prizes

Prizing Continued…

• Once a consumer takes the specific action – we’ve helped the client meet their primary goal/objective

• We simply used a prize as an incentive for that behavior

Does the number of entries equal Success?

Yes and No. Depends on the specific action, type of promotion and tactical execution...

For example:• YES, if the specific actions were:

– Visit our site to learn more about our products/services– Enter our sweepstakes

• NO, if your specific action was: – Buy our product

… and although many entered, no purchase was required and few products were sold

Summary: Setting objectives and expectations

for driving the correct behavior and action for your promotion are

essential.

Promotion Tactics to Drive Awareness

• Where/how the promotion will be communicated/executed:– Micro site / website / mobile site– Tear pad (at shelf, on-pack)– Package (outside/inside)– Social Media (Facebook, Twitter, etc.)– In stores (at shelf, at check out, flyer, etc.)– FSI– Events / booths– Print ads– Online banners– Radio, TV

Importance of Legal

• Rules first– Contract between Consumer and Sponsor– Guides structure and communications– All materials are subject to the Official Rules– Rules and Functional Requirements should be in sync

• Promotion must comply with State / Federal promotion laws• Will the promotion be global?

– Consider the complexities of addressing different countries’ laws;– Allow for enough time and resources

• Are you aware of all the risks? Does your agency offer indemnification from liability?

• What is your liability mitigation strategy?

CCV Promotions

Why a CCV Promotion?

• When done correctly and with authenticity, CCV promotions can evolve your brand's perception from the benefits of your products and services to the values embodied in non-profits’ missions and activities

• Example: NFL collaboration with the American Cancer Society– Addressing breast cancer– Raising funds– Driving awareness

Commercial Co-Venture (CCV) Overview

• A CCV is a way to structure a promotion that drives benefits for non-profit as well as for-profit organizations

• Range from short term marketing campaigns to strategic, multi-year (and multi-dimensional) alliances

• Verify that your corporate relationship agreement with any non-profit is consistent with your planned marketing activities

• Do your values and culture align? (Ties back to authenticity)

Key Considerations for CCV Promotions

• State regulations vary re: CCV activities– Ensure legal has capability to navigate and structure to comply across

entire target geography– E.g., filings, registrations, approval process, fees, bonding and post-

CCV reporting

• CCV’s can also be very time consuming– Typically requires officer-level approvals – Requires good planning and creative solutions to comply with

requirements

• Consider a Power of Attorney (POA) with a trusted marketing partner to streamline the ongoing process

Common Pitfalls with Setting up a CCV

• Keep in mind, you cannot communicate and execute charitable promotions by misleading potential participants as to the effect of their purchase

– For example, if a company says: "We will donate a [insert value] for every Like on Facebook up to $50,000…" and your corporate relationship agreement with that non-profit says you will donate $50,000 no matter how many likes you receive; this is not in compliance

– The actions of participants does not impact the outcome in this example

• As a rule of thumb, plan for 60-90 days in advance if you are looking to integrate a CCV based campaign into your marketing mix

Promotions and Social Media

• Social Media-based or promoted promotions increase the value proposition for target audiences to engage on social channels

• Social media can also dramatically improve participation volumes though demand creation, engagement and direct and indirect viral advocacy

• CCV promotions are particularly effective because they speak to a powerful driver of viral sharing: the desire to be perceived positively by others in their social network

Social media networks can host promotions and/or support web-based promotions

Awareness

Engagement

How Social Media Can Affect Promotions

How people generally experience promotions in social media

Seen from a measurement POV

Awareness

Engagement

Advocacy

Conversion

Time

0%

100%

Advocacy Feedback Loop

Ratio to a conversion(example)

100,000:1

5,000:1

50:1

Conversions 1:1Target users take a desired action (participate)

Promotions and Social Media

• However, CCV social media promotions must:– Be authentic – Design so that sponsoring/partnering brand is

subordinate to that of the CCV/cause– Be accurate – Awareness of false or misleading claims can

spread virally much faster than positives and destroy a brand’s image

– Be logical – Simplicity increases likelihood of conversion in a medium that requires “distraction” to attract targets

– Be legal – Social media is still rife with illegal promotions; brands with the most to lose will likely be first to be prosecuted, so legal must be addressed properly to avoid excessive risk

At a Glance

• Formed in 1992• Headquarters: Minneapolis • Officers in Los Angeles and Redmond, WA• Ad Age / Interactive Rank: #35• Promo / Promotion Rank: #37• Digital

– Mobile, web, media, social, analytics• Loyalty Programs

– CRM, Incentive, Sales Training, DR• Promotional

– Sweeps, games, contests, POP, legal• Social /Emerging media• In-house Technology, Legal

Marketing Solutions that Drive Behavior

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Mobile EmailSMSIMEmailDirect MailTelephone

TVRadioPrintDisplayWebsiteSearchOnline DisplayPaid SearchLanding PagesMicrositesOnline VideoAffiliate MarketingWebinarsBlogsRSSPodcastsContextualWikisSocial NetworksMobile Web

Gage Point of ViewMarketing challenges are getting more complex. Agencies need to be well versed across numerous disciplines to integrate brand messaging and design --- and be able to deliver with technology and analytics.

Sweepstakes: Bing + Ryan Seacrest

Drive awareness and registrations for Bing though promotional sweepstakes

Description–Components included:

• Promotional Microsite

• Banner ads for on-net placement

• Email creation

• Rules/Privacy/Terms of Use

• Prize Fulfillment

• Winner management (verification, communication, affidavits, tax reporting)

• Customer Service (via email)

• Reporting–Social media sharing tools were included and offered unique tracking capabilities showing the viral “spider” of who/how/where the sweepstakes was passed along via Facebook, Twitter, Windows Live and email.

Results–Over 258,000 unique visitors –84,000 registrations–32.4% conversion rate –63,810 new Bing accounts

Bing: Media Support

How Gage can help…

• Gage can provide a turnkey marketing foundation platform to address your specific audience

• Everything from Strategy and Planning -> Website Design and Development -> Print Production -> Social Media Activation

• Gage can manage the entire process and handle all aspects of integrated marketing campaigns – including legal and compliance

Program Flow / Strategy (example)

Wireframe for DesignExecution and Management

For more details on CCV promotions

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Please contact:

Mark KurtzChief Growth Officer Phone: 206-330-6396Email: mark_kurtz@gage.com