Spending on games and contests may be flat, but consumers don’t seem to notice. They are too busy posting photos, developing videos and singing jingles.

“It’s about empowering the consumer and letting them make their mark,” Bruce Hollander, executive vice president of Don Jagoda Associates, says. “We’re seeing more and more of that.”

Companies will drop about $1.86 billion on games, contests and sweepstakes this year, about flat with $1.83 billion in 2006, a trend that has continued over the last five years, according to the Veronis Suhler Stevenson Communications Industry Forecast.

“It’s not as high a priority on brand marketers’ lists,” says Leo Kivijarv, vice president of research for PQ Media, the custom media research firm that partnered with Veronis Suhler Stevenson on the forecast.

The slow growth is a result of a softening economy coupled with the saturation of games, contests and sweepstakes, Kivijarv explains. But brand marketers playing in the space are still looking for ways to stand out in the crowded field.

One way is to move beyond the Web to the third screen, says Marc Wortsman, executive vice president of Marden-Kane, Inc.

CBS Mobile, for example, has run a fantasy league for the popular “Survivor” reality show with Sprint. In it, players earned points based on certain actions and could switch their team members and monitor the action from their mobile phones.

“It’s becoming the battleground of the screens,” Wortsman says.

Companies are also offering more ways for people to enter.

This summer, Subway brought back its popular “Subway” game in which customers peeled off game pieces from beverage cups and sandwich wrappers for a shot at instant prizes in-store. They then went online to play an instant-win game or spell out key words for a chance at other prizes. Nearly four times as many people registered for the game compared to last year, says Lydia Kennedy, managing director of Catapult Action-Biased Marketing, the agency that handled the promotion.

Capturing consumer data is still a top priority for running games and contests. For example, Subway will use the database of opt-in subscribers from its Scrabble game to talk about new sandwiches and other programs.

“It’s one of the main reasons you run a game or contest,” says Paul Kramer, Catapult’s COO. “The future of marketing is about building ongoing relationships.”

On the legal front, the Promotion Marketing Association was able to modify the impact of a California bill, SB 1400, that would have made it difficult to market sweepstakes in that state. (See page 10.)

“Common sense prevailed,” says Ed Kabak, chief legal officer of the Promotional Marketing Association. “The result is something the industry can live with.”

SNAPSHOT

Marketers are expected to spend $1.86 billion this year building games, contests and sweepstakes

Sweepstakes and contests calling for user-generated content are still tops

Spending will average 0.8% at a compound annual growth rate through 2012

GAMES, CONTESTS AND SWEEPSTAKES SPENDING

COMPANIES WILL DROP ABOUT $1.86 BILLION ON GAMES, CONTESTS AND SWEEPSTAKES THIS YEAR, ABOUT FLAT WITH $1.83 BILLION IN 2006.

Veronis Suhler Stevenson Communications Industry Forecast

Fueled by the need to keep consumers engaged, technology gains ground as a prime tool for games, contests and sweepstakes. Whether it’s a text messaging campaign, online sweeps or an interactive game, the Internet continues to dominate the field.

Marketers prefer cyberspace largely for its cost efficiency, immediate data collection capabilities and ability to keep consumers engaged.

Some 34% of brands use interactive promotions — including games, contests and sweeps, according to PROMO’s 2006 Industry Trends Report. In 2005, just 12.8% of marketers listed offline games, contests and sweepstakes in their top three spending tier.

The methods in which games, contests and sweeps are deployed are changing to ensure a more engaging consumer experience across multiple touch points, says Robert Borman, VP of the sweepstakes, games and contest division for Archway Marketing. In addition, the level of interactivity has increased and prizes are not only bigger, but more customized and lifestyle based.

“There is more and more movement away from the standard program where you enter your name in a hat to more of an experience for a consumer to interact with a brand,” Borman says. “There’s a growing focus on how [you] engage a consumer and build brand loyalty. Marketers are becoming smarter about how these things are being implemented and executed.”

In one example, Westin Hotels & Resorts ran an online sweeps last fall tied to NBC’s The Apprentice: Martha Stewart, in which consumers designed their own hotel suite based on the show’s task. The top winner got tickets to the show’s finale and a five-day stay in Westin’s Renewal Suite.

The promotion drew 46,503 consumers to the micro site and 13,645 registrants. EPrize, Pleasant Hills, MI, handled.

“The sexy, captivating advertising world of the past is colliding with direct marketing creating [more of] a rich brand experience…that creates the same sizzle as traditional advertising,” ePrize CEO Josh Linkner says.

In addition to an Internet component, an offline method is often wrapped into the campaign to generate that personal brand interaction with the consumer, whether its getting the consumer in store, to an event or to try out a sample.

Last July, Best Buy blended both online and offline promotion for a back-to-school sweepstakes. The Tech 101 sweepstakes drove customers via in-store game cards to BestBuy.com where players entered codes to win MP3 players, dorm fridges and notebooks. Richfield, MN-based Best Buy reported nearly 1 million hits to the site; 300,000 consumers opted-in to receive company e-mails, says Jim Lawrence, Best Buy’s senior manager, event marketing. Archway Marketing, Chicago, handled game administration.

Best Buy often uses such a promotion to entertain customers and further immerse them in the brand, Lawrence says.

“[A sweepstakes] creates a little bit more excitement from the consumer,” he says. “It really rounds out a campaign and provides that needed incentive to go to the store or go to a Web site.”

SNAPSHOT 2005

34% of marketers use interactive promotion

More games, contests and sweeps shift to the Internet

Experienced-based prizes top the list