Know Your Promotions: Differentiating Sweepstakes, Contests, Raffles, and Lotteries
In the world of shopper marketing, branded promotions play a crucial role in engaging consumers, increasing brand awareness, and driving sales. However, understanding the nuances between the many different types of chance-to-win promotions and offers can be confusing! Whether it’s a sweepstakes, contest, raffle, or lottery, each of these promotion types has its own unique characteristics and legal considerations to keep in mind, and some are more well-suited for brands than others.
In this article, we’ll decode the important differences between these popular promotions and recommend the best types for shopper marketers to help you make informed decisions for your next campaign.
Sweepstakes and Contests
The main types of promotions are sweepstakes, contests, raffles, and lotteries. But–spoiler alert—the two types that are arguably the most important for brands to know about are sweepstakes and contests. These two promotion types are the standouts for promoting products and creating buzz around a brand or product.
But what exactly is a sweepstakes versus a contest, and what are the differences between the two? Let’s explore.
Sweepstakes
Sweepstakes are game-of-chance programs where winners are selected via a random drawing of entrants. Typically, participants enter by providing their contact information or other unique identifier by filling out an entry form. Unlike contests, sweepstakes do not require any skill or merit to win—every entrant has an equal chance.
We love sweepstakes for their ability to collect CRM opt-ins and consumer data, while also exciting an audience around a fun prize. Not only that, but sweepstakes are amazing for building brand awareness and buzz, creating repeat engagement, and driving increased sales!
Important note: while sweepstakes are a fantastic way to engage your audience and drive excitement around your brand, it's crucial to ensure legal compliance. One key aspect is offering a free alternative method of entry (AMOE) for any sweepstakes that requires a purchase to enter. This ensures that everyone has an equal opportunity to participate, regardless of their ability to spend. Also, sweepstakes that have a total prizing value of over $5,000 need to be bonded and registered with the states to ensure federal compliance, so it's important to have rules finalized two weeks before the launch date so they can be submitted.
Contests
Contests differ from sweepstakes in that winners are selected based on skill, merit, or creativity. Participants are usually required to submit entries that are judged against specific criteria, like writing a creative caption, submitting an epic photo, or creating stunning original art.
Contests typically require a little more effort from participants, but can result in a different level of engagement and user-generated content (UGC). You’ll be able to learn a lot about your customers through a contest—you can see what they find engaging, what they think about your brand, or how they use your products. And they’re a great organic way to promote your brand while rewarding customers!
Raffles, Giveaways, and Lotteries
While raffles and lotteries are less commonly used by brand marketers, they’re still important to understand, so we’ll give a quick overview of each.
Raffles involve selling tickets for a chance to win a prize and the winner is selected randomly, similar to a sweepstakes drawing. Raffles are commonly used for fundraising purposes by nonprofit organizations and charities. Keep in mind that raffles may be subject to additional legal regulations depending on the jurisdiction!
Lotteries are strictly regulated gambling activities where participants purchase tickets for a chance to win a prize. Unlike other promotion types put on by brand sponsors, lotteries are heavily regulated and administered by government authorities.
While these types of promotions have their place, that place usually isn’t the wonderful world of shopper marketing!
What Type of Promotion is Right For Me?
Remember, sweepstakes and contests are most popular with brands, and are perfect for driving excitement and engagement! These are the two types of promotions you’ll likely want to focus on when planning your consumer promotions because of their digital capabilities; they’re easy to conduct online and even integrate with social media!
Before running any promotion, it’s essential to conduct thorough research on regulations and legality to ensure compliance with local laws and guidelines, and/or work with a promotions expert or lawyer.
For more information on chance-to-win promotions like sweepstakes and contests, check out our consumer promotions playbook, which can help you figure out exactly which promotion type best fits your needs. Or reach out to us directly and let’s chat about how to plan the perfect chance-to-win promotion for your brand!