Winners are few and lawyers dogging them many, so why are sweepstakes on a rampage?

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The number of sweepstakes promotions being offered by marketers has grown at least 15 percent over the last eight to 12 months, according to a promo poll of fulfillment company executives.

“For just trying to move product direct to the customer, a retail sweepstakes is hard to beat,” says Dave Wood, national sales manager for Jay Group, a Ronks, PA-based fulfillment house.

When Shirley Ray, executive vp-client services for Lees Marketing Services, a Mt. Prospect IL-based fulfillment company, found that her clients were talking “a lot more about sweepstakes programs,” she asked them why they were considering sweeps over other promos. “They were seeing their competitors going into sweeps, and they wanted to be in there, too,” she says. “The growth in sweepstakes is driven by what’s going on in the marketplace.”

Sheer effectiveness is also part of the lure. “A sweepstakes is a sure way to draw thousands and thousands of people to your brand,” says Lisa Miller, director of sales and operations for The Express Group, a fulfillment house in Walled Lake, MI. “It’s one of the least expensive ways for a marketer to get maximum exposure.” A sweepstakes run by AT&T WorldNet last year generated more than four million entries and 70,000 new Internet service subscribers.

Brands teaming up with entertainment properties and other brands is an increasingly popular strategy in the sweeps arena. Sears partnered with Wheel of Fortune and Jeopardy! for a watch-and-win sweepstakes with prizes like Sears gas grills and Canyon River Blues apparel appearing on the shows. Nickelodeon, the NFL, and the Cartoon Network last year put more effort into coordinating their sweepstakes and getting the most bang for their bucks, according to Cunningham.

Viewers of the USA Network are being directed to the home page of San Francisco-based Lycos, a Web services company, where they can click and enter to win $100 gift certificates from CDNow. On afternoons through Aug. 25, USA is airing teen-oriented movies such as House Party, Meatballs 3 & 4, Ski Patrol, and South Beach Academy, and announcing daily winners during the presentation. On the final day of the promo, a grandprize winner will be awarded a Philips Home Stereo worth $2000, according to USA vp-consumer marketing Isabel Sternlieb.

For Sternlieb, nothing beats a sweeps: “It’s a great way for us to generate awareness for our different initiatives,” she says. “By tapping into Lycos, we can give our viewers an online experience that is both meaningful and exciting.” It also builds a lot of traffic for USA and Lycos, she adds.

“Sweeps are an effective way to build loyalty and get repeat customers,” says Miller. “Games just aren’t as good.”

Eyes on the prize

Consumers’ fascination with sweeps is firmly fixed on the Big Prize. “The public definitely thinks that bigger is better,” says Shevitz. Internet portal Yahoo, Santa Clara, CA, in conjunction with Haverford, PA-based RealTime Media, launched a 1998 holiday instant-win promotion that brought together leading Internet merchants such as Shabang, Great Foods Online, Digital Chef, Shop4. com, and Toys R Us. Customers making a purchase from participating merchants received a virtual scratch-off game card: A move of the mouse revealed whether they had won gifts of stereo equipment, fashion wear, holiday foods and desserts, toys, CDs, or gift certificates. Prize winners then advanced to a bonus round where players won $50,000, $100,000, or $1 million in cash. Consumers entered with each online purchase they made.

Yet the cost of mounting such a sweepstakes is modest, say experts. Getting insurance to indemnify them is a way to protect companies against the expense of granting a big prize. In general, sweeps present marketers with a fixed cost, “a great budgeting advantage,” according to Chris Stelly, president of Fulfillment of America, a Greenville, SC-based fulfillment house. Whether entries total four or four million, marketers only have to play a modest flat fee, he says.

But if sweepstakes prizes are to have real consumer pull, promoters must offer a broad array. A huge grand prize may attract initial attention, but the sweeps must include tens of thousands of prizes on the low end – put there to build traffic by making people think they have a better chance to win. “You want to keep people on the hook,” says Ray.

Cunningham points out the Big Prize is no longer simply big. The mentality of promoters has been decisively influenced by “the instant-millionaire syndrome,” derived from huge cash-prize state lotteries. But there have beenother changes. “These days, prizes must be connected with lifestyles,” he says. In February, Lisa Coddington won college tuition for her son at the University of Vermont, while Machele Web earned a round of golf for four at her favorite country club as part of San Francisco-based Visa’s Magic Moments holiday promotion. Visa had enlisted partners like Best Buy and Dell Computer for overlay components in the effort, in which consumers had their purchases paid for if the sales occurred during specified one-second periods chosen ahead of time.

Blockbuster appears to have tapped both the “instant-millionaire” itch and the couchpotato lifestyle with its Winning the Millions promo. Throughout the summer, the Dallas-based company selects membership numbers at random. If that member comes into a participating Blockbuster store that day and uses the card, he could win $1 million, payable in equal annual installments over 20 years. Those winners are also eligible to win a bonus jackpot starting at $10 million if the card is scanned during a randomly chosen hour of the day. The $10 million jackpot increases by $1 million each week until someone wins.

But it’s not always necessary to roll out the millions. San Francisco-based Springstreet.com, an online rental real estate service, recently ran a promo called Live Rent Free to build traffic and registration for its Web site. The grand prize was $12,000 or free rent for a year; secondary prizes included free tickets to the Broadway show, Rent.

“It always amazes me, the attraction of sweeps and games,” says SJI’s Shevitz. “They’re not new, but you have all these creative people out there able to take very tired tactics and keep pumping great life into them.”

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