'Social media to alter promotions industry' says Mando chief executive

We have just completed a promotion for a large global brand that we have worked with for the past five years. Response rates to its website were running at around 1 million unique users for the life of the promotion, yet in this last campaign we have seen these rates rise dramatically to around 16 million – fantastic results for any promotion. Having looked at all aspects of the promotion, the fundamental difference is the use of Facebook and other social media channels.

Whereas in the past if a promotion was supported by a large national TV campaign we would expect to see high levels of redemption, social media is taking these redemptions to a whole new level. What brands need to be aware of is that these channels bring with them a new level of risk for promotions due to their huge audiences and unpredictable nature; there are so many elements – such as blogging and social commerce – that are totally out of a brand’s control.

However, many brands remain unaware of the gauntlet they are potentially running. For example, we were recently approached by a beer brand and its creative agency, looking to drive traffic to the company’s website. The mechanic they were looking to run was that if users got five of their friends to sign up for the brand’s website, they would receive a free case of its beer. The brand had 2,000 cases put aside and was looking to insure against this for the promotion.

We explained that this sort of giveaway was likely to see extremely high redemptions, with the idea of “free beer” spreading like wildfire around sites like Twitter and Facebook. When the promotion went live the whole 2,000 cases were claimed within a couple of hours. Such is the power of social media to drive take-up of your promotions. In this situation, because of the finite number of “prizes” available, the brand wasn’t caught out unduly, they just had to ensure they had the correct disclaimers in place so they didn’t face any come back from their customers.

Another good example of the unpredictability of social media is the current Pants or Prizes campaign being run by Dr Pepper. The drinks brand is using a Facebook page to support its on-pack promotion, which offers customers the option to enter a code and select from a range of potential prizes to be entered into a draw for – the lowest of which is a pair of garish pants. The buzz around this is staggering, with over 300,000 people already following the page on Facebook, and somewhat surprisingly the pants have proved a huge cult hit and are registering massive redemption rates.

The promotions industry is faced with a tough call as to how it deals with the social media phenomenon, and Fixed Fee companies probably face some of the hardest decisions. Our experience now is that if something goes onto Facebook the costs can be exponential, and I believe that we’re likely to see some severe redemptions that will cost people a lot of money, and as a result of which, we could see a return to brands capping the number of redemptions on their promotions.

For brand owners, however, this is an exciting time and they should enjoy the new levels of speed and response that social media is generating for their promotional activities. However, they need to be aware of the risks involved, and the potential damage that can be done to their brands if they don’t have the funds to honour redemptions.

But for now, the moral is simple: if you’re going to put your promotion on Facebook then be prepared! Now more than ever brands need to enter promotions with their eyes open and to ensure they have the money to fulfil any promises they make to their customers.