Avoiding Virtual Pitfalls

Digital promotions are part of the overall marketing solution and they are supposed to drive consumption in a fresh and cost-effective manner, unlike their tired and costly offline counterparts — right? All a marketer has to do is hire the vendor, alert the fulfillment house and finish today’s other tasks — right?

Not so fast. Pitfalls abound when selecting vendors of digital promotions, resulting in outcomes ranging from considerable inconvenience to the doomsday scenarios such as lawsuits, blackened reputations and government investigations.

The risks may tempt some to keep digital operation in-house and that may be a valid option. But most often, marketers will choose to hire a digital promotion vendor. The challenge is hiring the right one.

Before we go any further, we need to understand what digital promotions are and why they can be so problematic. For our limited purposes here, “digital promotions” means telephone-based and online initiatives encompassing games, contests, sweepstakes and the like. These frequently overlay other programs, with traditional print and other media lending support.

There are at least three reasons why digital promotions can be tricky: One, uniform guidelines or industry standards governing the execution of digital promotions are sparse; two, there are numerous vendors and no well-recognized or trusted industry giant leading the way; and three, disparate and emerging technologies typically require the direct marketing firm or sponsor to evaluate an unfamiliar animal.

It is easy to see why even the savviest direct marketers face a daunting task in selecting vendors. Nevertheless, this fact has not dampened their enthusiasm for digital promotions: Online promotions consumed $1.5 billion in 2002, while telephone-based promotions attracted $500 million in the same period. The big budgets have been established, but the big question remains: Are your digital promotions in competent hands?

Evaluate your prospects by several criteria, starting with security. “Program Integrity” is vitally important, and includes the steps the vendor takes to maintain internal security, avoid over-redemption and implement safe technology practices.

Maintain internal security

Security begins internally, as applied to vendor employees and their agents. Security violations should be grounds for termination of the employment or relationship (in the case of an employee or supplier) and unconditional forfeiture of any ill-gotten gains. A worthy digital promotions vendor safeguards the promotion from the inside by:

• Vendor Non-Participation Agreements

  All vendor employees and agents should be required to execute one of these, prohibiting them from taking part in any vendor-administrated promotion. This policy should also be stated in the office policy handbook or employee manual.

• Vendor Confidentiality Agreements

  Similar to the Vendor Non-Participation Agreement, vendor employees and agents agree in writing that they will maintain the promotions on a strictly confidential basis. Again, a separate confidentiality statement should be memorialized in the office policy handbook or employee manual.

• Limited Data Circulation

  Vendor employees and agents should have access to the promotions only on a strict “need-to-know” basis. Establish two username and password groups for access to any systems: One set for the developers and testing procedures, and a second set for key administrators on the “go live” date at which time all prior access codes expire. Require a list of personnel who have access to sensitive data.

• Monitoring Administrative Access

  Log tools should record all administrative access and activity, and any authorized access should pass through a 128-bit Secure Socket Layer (SSL) for encryption purposes. Automatic and immediate notification of any breach is required.

• Witnessed Prize Seeding

  The direct marketer or sponsor and the vendor should each have two people present for the prize-seeding process (or drawing). Strict access controls to the prize seed list are required.

Avoid Over-redemption

Over-redemption in the traditional sense refers to losses incurred by redemption of, for example, store coupons in excess of the expected redemption rate. From a digital promotions perspective, we are referring first to technical errors that might result in excessive prize distribution (e.g., you are liable for 10 trips to Paris, instead of the single trip that was budgeted), and second, there are false winners who inaccurately claim to be winners (e.g., “the website told me I won the grand prize, I swear!”). Competent digital promotions vendors take multiple steps to guard against over-redemption.

• Seeding Verification

  Random prize distribution is usually automated with a software-driven algorithm to ensure that a single prize fits only one “slot” (e.g., Friday at exactly 12:32 p.m.), and then confirmed by human review. During the testing phase, a software simulation of the sweepstakes, contest, or game is useful to observe any irregularities in prize distribution.

• ‘No Winner’ Default

  At the risk of stating the obvious, digital promotions rely on technology, and technology sometimes fails. The key is how the technology responds to failure, and to those ends, it is crucial that every digital promotion have a “No Winner” default status. Possibly the best defense against accidental over-redemption, the “No Winner” default status is a generic term that means the system is incapable of awarding any prizes to any participant if there is a systemic malfunction. Sophisticated systems monitor themselves, and if there is a problem, they should immediately shift to the default status and alert appropriate personnel to the problem.

• Precise Technical Logs

  Keeping complete and accurate logs of all technical activity, down to the millisecond, is critical for a number of reasons. One important reason is that the logs should be required to validate any winner and disprove the claims of participants who are seeking to deceive the sponsor. The value of the prize appears to have no impact on a person’s willingness to fabricate a story: More than one participant falsely claimed to have won a $2 coupon in a recent national promotion conducted by our company. Note the difference between affidavits typically used for grand-prize distribution (which ask the winner to affirm his winning status at fulfillment) and precise technical logs (which independently confirm the winning status prior to fulfillment). From a public relations perspective, awarding the $2 coupon might make sense. Incomplete or inaccurate technical records, however, are inexcusable.

This is part one of a three-part series on Internet-based promotions. Look for part two next month.

Jed Weissbluth is VP-business development for Chicago-based OnCall Interactive. He can be reached at [email protected] or 312.226.1259 x. 1123