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Deploying Gamification to Sweetstakes and Promotions to Engage Consumers and Enhance Brand Loyalty
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#DigitalAdv
ACI’s 3rd Annual Summit on Digital Advertising: Social Media, Sweepstakes & Promotions
Deploying Gamification to Sweepstakes and Promotions to Engage Consumers and Enhance
Brand Loyalty
September 8-10, 2014
Arlene K. Alexander
Benefits, Marketing & Intellectual Property Counsel
White Castle Management Co.
Sheila Jambekar
Senior Counsel,
Zynga, Inc.
Melissa Landau Steinman
Partner
Venable LLP
Tweeting about this conference?
#DigitalAdv
Why Add Gaming to Your Sweepstakes or
Social Media?
#DigitalAdv
1. New Way to Engage Customer and/or Capture a Certain Audience
•By platform (Facebook, Twitter, LinkedIn, smartphones, etc).
•By demographics
#DigitalAdv
2. Raise Awareness of Brand/Company
• Incentive attracts customers to marketing message of your brand
•Competition – draw attention from your competitors
#DigitalAdv
3. Encourage Sharing of Brand Experience in Social Media
• Inexpensive Marketing
•Obtain feedback – What does the customer think about your product?
• Earned media – value associated with sharing of company posts
#DigitalAdv
4. Strengthen Connection With Followers
•Connect with Brand
•Build and connect with “community” – group rewards
#DigitalAdv
5. Data Capture
•Preferences – if given various choices, which will be acted upon?
•Behaviors – more likely to use earned or random discount?
•Grow email list • Caveat: Provide proper disclosures in related marketing materials
and privacy policy
#DigitalAdv
6. FUN !!!
•Offer instant gratification to customers
#DigitalAdv
Sweepstakes vs.
Illegal Gambling
#DigitalAdv
I. Illegal Lottery & Gambling Laws
• Prohibit promotions having all of the following elements: • PRIZE – something of value.
• RANDOM CHANCE – winning depends on factors outside a person’s control (versus skill).
• CONSIDERATION – requirement that something of value be given to enter the promotion. • Payment of money (even payment to third party, such as fee to send a
text).
• Make a purchase
#DigitalAdv
II. Sweepstakes
•Promotions based on random chance in which a prize is awarded. • Cannot require consideration
• If consideration is requested to enter (such as purchase of brand item), alternate method of free entry must be included • Cannot favor one form of entry over another
• Must be clear and conspicuous
#DigitalAdv
Text-to-win Sweepstakes
•Must provide free method of entry if text messaging is subject to standard rates.
•Good practice: Check Mobile Marketing Association guidelines
#DigitalAdv
Jurisdiction
•Primarily regulated at state level • Direct mail - also federal
• Register and/or post bond – Arizona, Florida, New York & Rhode Island
• Advertising laws may apply
• Additional laws may apply: • Industry-related
• Method of advertising – game piece in bottle cap
• Intended audience – Children’s Online Privacy Protection Act (COPPA)
• Jurisdiction – Rhode Island requires rules to be posted in stores
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III. Advertising of Sweepstakes •Disclose Material Terms:
• Sponsor Identity
• Start and End Dates
• Eligibility Requirements (age, residence, etc.)
•No Purchase Necessary
#DigitalAdv
Advertising - Federal Law
•Deceptive Mail Prevention and Enforcement Act • Must provide free method to remove name
from sponsor’s mailing list. Sponsor has 60 days to comply
• If mailing has entry materials, disclosures must be set forth: • No purchase necessary
• Purchase will not improve chance of winning; and,
• Complete official rules
#DigitalAdv
Advertising – State Laws
• Some have required disclosures for mail solicitations • Prize and eligibility restrictions
• Entry requirements and deadlines
• Description of prize, its approximate retail value, and odds of winning
#DigitalAdv
Advertising – State Laws (cont.)
•Other states prohibit sponsor from making certain representations: • Chance of winning will be improved by
purchase of product
• Person is a winner, is specially selected, or is a finalist (unless true)
• Mailing is urgent or time-sensitive (unless true)
#DigitalAdv
IV. Best Practices
• Provide an alternate method of entry
• Identify bonding and registration requirements of each state
• Determine necessary disclosures
• Rules must be compliant and consistent across legal platforms
• Make sure your game is legal.
• Structure
• Venue
#DigitalAdv
Prizes, sweepstakes, and lotteries were listed in 6th place on the FTC’s 2013
Complaint List
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#DigitalAdv
What is Virtual Currency?
• US Treasury – “a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency”
• European Central Bank – “a type of unregulated, digital
money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community”
• European Banking Authority – “a digital representation of
value that is neither issued by a central bank or a public authority, nor necessarily attached to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically”
#DigitalAdv
Categories of Virtual Currency
• Fully-closed loop • E.g., World of Warcraft Gold
• Partially-closed loop • E.g., Farmville Farmcash
• Convertible • E.g., Linden dollars for Second Life; BitCoin
• Centralized • Single repository/administrator; purchaser of centralized VC transfers
real $ to entity that credits purchaser’s account with VC • E.g., Linden Dollars
• Decentralized • No central repository/authority for managing currency; usually obtained
by purchase on open market or completing tasks to aid in operation of currency
• E.g., BitCoin
#DigitalAdv
Using Virtual Currency in Sweeps and Promotions
Key Question:
Does the form of virtual currency you are using have a real world value?
#DigitalAdv
Using Virtual Currency in Sweeps and Promotions
• Scenario 1:
• Spend virtual currency, get a chance to win more virtual currency.
• Scenario 2:
• Spend fiat (aka real) money, get a chance to win virtual currency.
• Scenario 3:
• Spend virtual currency, get a chance to win real world prizes.
#DigitalAdv
Gambling and Casino Mechanics
Check with gambling counsel:
• Sports betting
• Poker (Poker sweeps)
• Casino-style mechanics or look and feel
#DigitalAdv
Virtual Currency: Tax and Other Legal Implications
• Is virtual currency property? • Bitcoin – according to the IRS, it is property
• Do you need to collect sales tax on it if you sell it? • State-by-state analysis
• Escheatment issues • Transferability – what about accounts/unused amounts?
• FinCen rules • Money services business and money transmitter regulations
• Watch for state rules regulating VC • E.g., NY Dep’t of Financial Svs proposed rules re: cryptocurrency like
Bitcoin
#DigitalAdv
Lessons in Gamification Integrating Gamification into Sweepstakes and Promotions
#DigitalAdv
• Marriott set up My Marriott Hotel game for recruitment, allowing players to manage their own kitchen
• Game included Links to Marriott career site
• Over 25,000 players joined in first week after launch
Integrating Gamification: Marriott
#DigitalAdv
Marriott My Hotel
• Challenges • Limited market for game
But—learnings used in creating Social Xplor Game/App
• Many other companies have used games for recruiting, training, and feedback: • Domino’s—make your own pizza and
apply for a job at the same time!
• Sun Microsystems—created adventure game to replace new-hire training
• Facebook—uses games for quick reviews and feedback
#DigitalAdv
Marriott Social Xplor
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Marriott Social Xplor
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Marriott Social Xplor
Legal/Practical Issues: • Registration and bonding required?
• Importance of trademark knockout search and registration
• Email and mobile marketing efforts: compliance challenges • Mobile app—need for carrier approval, compliance with TCPA
requirements for express consent
• Mapping out social media campaign
• Implications of proposal to expand play to other countries? Brazil, France, UAE, China, Canada • What are the issues when running an international contest? E.g., taxes,
prize fulfillment, translation, registration
• Privacy
• Use of Rewards Program to appeal to core customer
• Practical challenges posed by complexity of gameplay
• Integrations/in-app brand marketing
#DigitalAdv
Pepsi Integration
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Pepsi Integration
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Hertz Integration
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Hertz Integration
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• Scarecrow film and arcade-style mobile game encourages users to buy natural and wholesome food by asking you to outsmart the “Crowbot” and unlock prizes in the form of a BOGO offer redeemable in 1500 locations worldwide
• 6.5 million YouTube views in less than two weeks; sales spiked in Q1 2014; top honors at the 2014 Cannes Lions Festival
Integrating Gamification: Chipotle Scarecrow Game
#DigitalAdv
Chipotle Scarecrow Game • Some argue the “advergame” is designed to push unhealthy food
and drinks to children by exploiting legal loophole in the regulations applicable to advertising through traditional media.
• As of late August 2014 , no prizes left.
• Rules: contest runs “until 12/31/2014 or until supplies last.”
• Is there consideration when a BOGO is offered as a prize?
• US entrants only are eligible, who can redeem prize at any “participating restaurant”– does this include international?
• Is there any list of participating locations provided?
• Rules must be clear with games just as they must be clear with traditional sweepstakes
#DigitalAdv
• Business Model: Social media application allowing users to “check-in” at locations.
• Gamification Strategy: Leaderboards ranked users against friends based on check-ins. Badges showed user’s achievements.
• Outcome: Over time, Foursquare experienced a drop in consumer interaction and in 2012 announced it was moving away from check-in focus to social updates, deals and recommendations.
Integrating Gamification: Foursquare
#DigitalAdv
Foursquare • What went wrong?
• Virtual rewards should be meaningful
• Accomplishments often carry no real distinction
• Ex: Foursquare “Game of Cones” promotion asked users to rank highest ice cream places by checking in on the app and using a hashtag. Winning restaurant would win an “Iron Cone” badge to be displayed on their business profile. Only 6000 check ins in NYC and even fewer in SF because no incentive
• Game should encourage interaction. Original leaderboard system scored only through check-ins. A score combining comments, ratings, etc. would have encouraged more interaction
#DigitalAdv
Gamification as Sweepstakes Mechanism
• Toyota and Home Shopping Network “More the Merrier Sweepstakes” • Sponsored by Toyota, sweeps lets
consumers enter by redeeming points from an online arcade
• Consumers earn points by watching videos or playing online games (e.g., watching Toyota ad worth 700 points)
• Frontier Communications Holiday Sweepstakes • Frontier Communications sweepstakes
supported by a “Frank’s Chimney Dash” Facebook game featuring the company mascot, Frank the Buffalo
• Increased number of Facebook followers and created a community
#DigitalAdv
Takeaways • Planning is important—and Legal should be involved from the beginning
• In particular, mobile approvals can take considerable time
• Geographic scope should be carefully considered from the start
• Games should offer meaningful rewards
• Gamification for sake of gamification does not work
• If virtual currency will be used, implications must be carefully considered
• Gamification done right is still an effective tool
• Can generate buzz and encourage interaction
• Can use social media and loyalty programs to generate buzz—provided that you comply with platform rules, CAN-SPAM, and your own program terms!
• Brand integrations can strengthen programs, but may trigger need for partner agreements and compliance with third party marketing guidelines
• One size does not fit all
• Game should have a strategic purpose (e.g., Chipotle)
• Consider whether there are additional regulations that apply because of audience (e.g., children)
#DigitalAdv
QUESTIONS?
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