How does a prize draw amount influence participation rates in a
consumer sweepstakes draw if the draw amount is increased? For
example, how would raising the prize amount from $25,000 to $50,000
likely impact participation rates?

---

Request for Question Clarification by umiat-ga on 19 Oct 2005 13:37 PDT

Hello, corel-ga!
 I have found virtually nothing of substance relating to participation
in consumer sweepstakes and the dollar amount of the prize offered.
Would you be interested in widening the parameters of your question to
include the lottery? I have found a few references regarding
increasing sales of lottery tickets as the prize increases, but not
many.
 Are there any other directions you would like researchers to pursue
in order to broaden the base of your question and uncover some
information that would prove helpful to you? Perhaps general methods
to increase sweepstakes or contest participation, etc?
umiat

---

Clarification of Question by corelcorp-ga on 19 Oct 2005 15:00 PDT

Hi there:

Sure, let's broaden the question as you suggest to include lotteries.

---

Clarification of Question by corelcorp-ga on 19 Oct 2005 15:01 PDT

Hi agin:

And let's also dig deepre as you suggest below:

>Are there any other directions you would like researchers to pursue
>in order to broaden the base of your question and uncover some
>information that would prove helpful to you? Perhaps general methods
>to increase sweepstakes or contest participation, etc?

---

Request for Question Clarification by umiat-ga on 19 Oct 2005 16:33 PDT

Thanks so much for your clarification. I'll give it a try and see what
I come up with!

---

Request for Question Clarification by umiat-ga on 19 Oct 2005 23:10 PDT

Hello again, corel-corp!


I must confess that it is not often I put many hours into a seemingly
"easy" research task and come up virtually empty-handed. My initial
impression upon reading your question was that there would be numerous
studies pertaining to the link between prize value and participation.
This is simply not the case. I have used every combination of words
and search terms I can think of and hit countless dead ends. While
there are a lot of studies "about" contests and sweepstakes, and a lot
of "advertisements" for sweepstakes and those companies willing to
help clients work out a promotional strategy, there is obviously a
black-hole of research data pertainining to your particular question.
I am going to post what I have found in a clarification for you to
review. There are a few studies that touch lightly on prize value vs.
participation, and some anecdotal articles which link lottery
participation with the size of the prize. However, that's about it!

 If you can enlighten me more about why you need/want this particular
information, or the general purpose behind your question, perhaps I
can narrow my focus or pursue another path.

 Look over what I have found and see if it comes close to answering your question. 

==

From "ALL IN A GOOD CAUSE? THE CASE AGAINST A NATIONAL LOTTERY."
Jubilee Policy Group. January 1993
http://www.jubilee-centre.org/pdfs/The%20case%20against%20the%20national%20lottery.pdf

"American experience shows a strong correlation between jackpot size
and participation. The question of a maximum prize is perhaps the most
crucial factor in the design of a lottery. In some lotto games, if the
top prize is not won, it can be "rolled-over" to the next draw. This
practice can continue up to a set maximum, or indefinitely. In Canada
there was a graphic illustration of the importance of rolling-over to
boost turnover. By January 1984, the jackpot of the Inter-Provincial
Lottery Corporation had reached $14 million.

** Outlets reported double or triple usual sales; some queued for up
to five hours for tickets. People spent $50-$60 at a time."

"A more recent example is the "lotto-mania" which prevailed in
Pennsylvania as the jackpot hit $115 million."

==

From "Dreaming Big: Why Do People Play the Powerball?," by Emily
Oster. Harvard University. Senior Honors Thesis, March 14, 2002 
http://www.dartmouth.edu/~chance/chance_news/for_chance_news/ChanceNews13.02/OsterThesis.pdf

"This paper reveals four new facts about the lottery.

 ** First, sales increase more with increases in jackpot in richer areas. ** 

 Second, sales increase more with increases in jackpot size when the
odds of winning are better. Third, sales vary systematically over days
of the week and time of the year. Fourth, people will purchase tickets
for future drawings when they are available. The facts are most
strongly consistent with the idea of an additive utility of lottery
gambling.

==

From "Size and distribution of prizes and efforts in contests."
Epstein, Gil S. and Shmuel Nitzan, Economics Bulletin, Vol. 8, No. 10
pp. 1-10, 2005
http://www.economicsbulletin.uiuc.edu/2005/volume8/EB-04H00002A.pdf

"The intensity of competition in contests is affected by the sum of
the awarded prizes and by the prize distribution between the
contestants. It seems that the larger the sum of the prizes and the
more symmetric its distribution, the more intense is the competition;
that is, the larger the efforts incurred by the contestants. In this
paper we study the general class of such two-player variable contests
and examine their effect on the contestants? efforts."

"Our results hinge on a fundamental equation that decomposes the total effect
on individual effort into two sub-effects that correspond to the
change in the two measures of intensity of competition. We show that
the ?prize-distribution effect? is always larger than the ?size
effect? (size of the sum of the prizes). The result states that when
there is a change in both the size of the prizes and in their
distribution, the direct incentives due to the change in the
contestant?s relative share is larger than the indirect incentives due
to the relative change in the sum of the contest prizes."

===

From "Examining the ?Halo Effect? in Lotto Games," By Victor A.
Matheson and Kent Grote. August 2005.
http://www.holycross.edu/departments/economics/RePEc/Matheson_HaloEffect.pdf

Abstract:

"The "Halo Effect" occurs when lotto ticket sales are unexpectedly
high following a large jackpot. An examination of the Powerball
lottery finds evidence that the halo effect exists and that it is the
result of bettors exchanging prize winnings for new tickets."

===

The following admittedly "unscientific" articles testify to the
increase in lottery ticket sales as the prize gets bigger!

"Sree Nadendla, the owner of a Marathon gas station in Green Bay, said
he has seen an increase in the number of customers buying tickets for
the Powerball as the jackpot continues to rise.

"Usually when it?s this big, more people come in to buy tickets," said
Nadendla, who added that his store usually gets flooded on the
Wednesdays of the draw with last-minute customers hoping to get a
piece of the multimillion-dollar pie."

From "$180M pot big draw for Powerball players. Lottery?s sales
expected to rise before next pick," By Malavika Jagannathan. Oct 4,
2005
http://www.greenbaypressgazette.com/news/archive/local_22863252.shtml

==

The larger prize from Powerball affects lower-win lotteries:

"Pennsylvania?s Super 6 lottery game is feeling mediocre these days -
and it has Powerball to blame. Like a three-year-old who pouts while
his parents fawn over their newborn, the lottery game that used to
generate visions of instant wealth and king-of-the-world impulses in
players is taking a back seat to the new, multi-state gambling game
the commonwealth joined on June 27. When compared to similar jackpots,
weekly Super 6 ticket sales are down by nearly half statewide. And its
jackpot is rolling over almost as fast as grass grows during a
drought."

"Nobody really wants to play it," said Jennifer Albright, owner of the
Broadway Lunch & Lottery Shoppe in Hanover, York County, who added
that sales of Super 6 tickets in her store have dropped 70 percent
since Powerball?s arrival.

"There?s some people that stick with it, then they play the Powerball
also. But a lot of people didn?t play the Super 6 when Powerball
arrived," she said.

"Before Powerball, Super 6 jackpots would start at $3 million and
would grow by at least $1 million if a drawing produced no winning
ticket. Powerball jackpots, on the other hand, start at $10 million
and increase by $2 million until the jackpot exceeds $20 million. Once
Powerball reaches that level, it begins to rollover at a rate of at
least $3 million or $4 million, depending on ticket sales."

"Until it?s, like, the same - where we?re at a $10 million and a $10
million - it?s really hard to compare," said Sally Danyluk, Lottery?s
director of public relations."

From "Arrival of Powerball drops sales of Super 6 lottery tickets," By
Mark Shade. http://gaming.issueclips.com/ocFeature.asp?ArticleId=865329

==

"I'm guilty of it. I can't really explain it, but when the jackpot is
"only" $2.5 million, I don't go out of my way to get a ticket. In
fact, I have caught myself dissing the smaller jackpots - only $2.5
million, well that's not worth my dollar.  I am not alone.  British
Columbians react to the jackpot.  When the jackpot is small, we buy up
to 11 percent of the tickets nationwide, but when that jackpot gets up
there, we get motivated.  When the jackpot is over $10 million, up to
14 percent of all tickets in Canada are sold in B.C."

See "No More Cheap Dreams of a Jackpot," By Valerie McTavish. May 27, 2004 
http://www.thetyee.ca/Life/2004/05/27/No_More_Cheap_Dreams_of_a_Jackpot/

==

"Customers prefer the astronomically high lottery jackpots, he said,
and Powerball jackpots are always high.

"People are weird. They'll come in and they won't buy a ticket" if the
jackpot is just $1 million, Discatio said. "It's like a million isn't
good enough for them, you know what I mean?"

From "Lines long for Powerball," by MEREDITH GOAD. 
http://news.mainetoday.com/indepth/gambling/040731powerball.shtml

==

Example of a successful Sweepstakes:

"Volvo Promo Most Successful Ever; Site Gets 18 Million Hits." Promo.
Mar 9, 2005 http://promomagazine.com/news/breakingnews/volvo_launch_030905/

=

Some generic articles on sweepstakes promotion:

"Contests, Giveaways, and Promotions," by Frank Fiore.
http://www.peachpit.com/articles/article.asp?p=24044&rl=1

"How to Create Win-Win Sweepstakes on the Internet, Legally," By Jonathan Ezor.
http://www.gigalaw.com/articles/2000-all/ezor-2000-06-all.html

==

Let me know your thoughts!

umiat

---

Request for Question Clarification by umiat-ga on 20 Oct 2005 06:20 PDT

Again, if there is any further enlightenment you could shed on your
question, it might help.

=

A fairly inepensive Data Table report might be of interest to you:

"Eleven US magazine publishers with sweepstakes in 1999 ranked by
dollar cost of prizes per thousand pieces mailed, with each
publisher's total sweepstakes mailing volume in pieces, dollar value
of advertised prizes, and dollar value of prizes actually awarded...."

See Research and Markets
http://www.researchandmarkets.com/reports/269572/  

==

The Reggie Award Case Studies highlight some very successful sweepstakes:
http://www.pmalink.org/members/reggies/1998_reggie_winners4.asp

==

Articles concerning sweepstakes strategy also caution against becoming
greedy and posting numerous entries which results in a further
division of the prize.

See "The Largest Number Game." William Poundstone, Prisoner's Dilemma
http://www.heretical.com/games/lnumg.html

---

Request for Question Clarification by umiat-ga on 20 Oct 2005 06:39 PDT

Last one until I hear from you:

Kalra and Shi: "Consumer Value-Maximizing Sweepstakes & Contests."
Review of Marketing Science Working Papers. Volume 1, Issue 3 2002
Working Paper 2
http://www.bepress.com/cgi/viewcontent.cgi?article=1008&context=roms

"The purpose of this paper is to provide guideline on designing sweepstakes
that will increase consumers? motivation to participate and thus
generate additional sales. The results of the model show that the
sweepstakes reward structure should be based on three factors: the
objectives of the firm, the risk aversion of the customers and the
level of subadditivity. The results of the model prescribes that the
firm should begin by setting sweepstake objectives in terms of either
attracting switchers or targeting current users."

Hello, corelcorp-ga!

 Your question involves whether an increase in the prize offering will
affect sweepstakes or lottery participation. I am not sure whether you
are asking this question for academic purposes or to gain some insight
into a more successful approach to advertising and promotion. However,
after several more hours of research and thought, I have come up with
some basic conclusions.
 
 It can be generally assumed that interest in a sweepstakes or lottery
is piqued when the prize becomes more substantial. Anecdotal, as well
as some scholarly research, alludes to an increase in participation
with the size of the prize. However, an increase in the sweepstakes
prize is not going to be effective if the news does not reach a wider
audience than that reached during the lesser prize promotion.
Conversely, a large lottery jackpot is not going to translate into
increased ticket sales if economic conditions are forcing individuals
to guard every penny.

 Sweepstakes and lotteries are two very different beasts. A
sweepstakes involves no monetary investment from the participant. The
primary target of sweepstakes promotions are individuals with an
interest in a specific product or niche market. Unless the participant
visits an online or brick and mortar store promoting the sweepstakes,
or reads about it in a publication which already appeals to them, they
are unlikely to participate. Sometimes, if the prize is substantial,
viral marketing will pull in some otherwise uninterested parties who
are lured in from the fringes. On the other hand, lotteries, Powerball
and similar contests appeal to a wide audience whose only goal is to
win money. These jackpot contests are widely publicized to the general
public and there is opportunity to purchase a ticket on almost every
street corner.

  As with any sweepstakes or lottery, you are still culling
participants from a group who possess a general desire to participate
in these types of promotions and games of chance. As the prize
increases, this inner circle of interested parties starts expanding to
the outer fringes, pulling in those who have held back from
participating until the prize is sufficiently worthy to lure them in.
Exactly how much the interest increases has not been researched, but
there is ample evidence that participation does increase to a certain
extent.

 An extremely interesting article posted at the bottom of my answer
highlights the willingness of individuals to pay more for items that
represent pleasure, dreams, fantasy or a promise of "something" in the
future. This tendency can be extended to the frenzied ticket-buying
accompanying large lottery stakes. The greater the jackpot, the more
grandiose a dream it represents.
  
 
CORRELATION BETWEEN SIZE OF PRIZE AND TICKET SALES
==================================================

The following articles have been culled from both scholary and
anecdotal/historical sources.

==

"American experience shows a strong correlation between jackpot size
and participation. The question of a maximum prize is perhaps the most
crucial factor in the design of a lottery. In some lotto games, if the
top prize is not won, it can be "rolled-over" to the next draw. This
practice can continue up to a set maximum, or indefinitely. In Canada
there was a graphic illustration of the importance of rolling-over to
boost turnover. By January 1984, the jackpot of the Inter-Provincial
Lottery Corporation had reached $14 million.

** Outlets reported double or triple usual sales; some queued for up
to five hours for tickets. People spent $50-$60 at a time."

"A more recent example is the "lotto-mania" which prevailed in
Pennsylvania as the jackpot hit $115 million."

From "ALL IN A GOOD CAUSE? THE CASE AGAINST A NATIONAL LOTTERY."
Jubilee Policy Group. January 1993
http://www.jubilee-centre.org/pdfs/The%20case%20against%20the%20national%20lottery.pdf


==


Ticket purchases by adolsescents correlate to the size of the prize:

"However, all adolescents reported that the type of game, size of
prize, color of ticket, and name of the ticket were the most important
characteristics and determinants when purchasing scratchcards.

From "LOTTERY TICKET PURCHASES BY ADOLESCENTS: A QUALITATIVE AND
QUANTITATIVE EXAMINATION." Report to the Ministry of Health and
Long-Term Care, Ontario, Jeffrey L. Derevensky Ph.D. and Rina Gupta
Ph.D. August 2001.
http://www.education.mcgill.ca/gambling/en/PDF/lottery.pdf

==


The following paper "reveals four new facts about the lottery:"

 ** First, sales increase more with increases in jackpot in richer areas. ** 

"Second, sales increase more with increases in jackpot size when the
odds of winning are better. Third, sales vary systematically over days
of the week and time of the year. Fourth, people will purchase tickets
for future drawings when they are available. The facts are most
strongly consistent with the idea of an additive utility of lottery
gambling."

From "Dreaming Big: Why Do People Play the Powerball?," by Emily
Oster. Harvard University. Senior Honors Thesis, March 14, 2002
http://www.dartmouth.edu/~chance/chance_news/for_chance_news/ChanceNews13.02/OsterThesis.pdf


==


"The intensity of competition in contests is affected by the sum of
the awarded prizes and by the prize distribution between the
contestants. It seems that the larger the sum of the prizes and the
more symmetric its distribution, the more intense is the competition;
that is, the larger the efforts incurred by the contestants. In this
paper we study the general class of such two-player variable contests
and examine their effect on the contestants? efforts."

From "Size and distribution of prizes and efforts in contests."
Epstein, Gil S. and Shmuel Nitzan, Economics Bulletin, Vol. 8, No. 10
pp. 1-10, 2005
http://www.economicsbulletin.uiuc.edu/2005/volume8/EB-04H00002A.pdf


==


"The "Halo Effect" occurs when lotto ticket sales are unexpectedly
high following a large jackpot. An examination of the Powerball
lottery finds evidence that the halo effect exists and that it is the
result of bettors exchanging prize winnings for new tickets."

From "Examining the ?Halo Effect? in Lotto Games," By Victor A.
Matheson and Kent Grote. August 2005.
http://www.holycross.edu/departments/economics/RePEc/Matheson_HaloEffect.pdf


==

South Carolina ticket buyers request higher jackpots:

"Representatives of the Multi-State Lottery Association (MUSL)
jurisdictions will meet later today to discuss changes in the
Powerball matrix.  The modifications under consideration would add two
balls to the white ball pool, increase the size of the minimum jackpot
from $10 million to $15 million, change the annuity payment option,
increase match-5 prizes from $100,000 to $200,000 and add a 10-times
multiplier as a promotional feature of Power Play that would be
offered periodically.

** "These changes have been recommended by MUSLs Development Committee
to answer the requests of Powerball players for higher jackpots, a
faster rate of jackpot growth and higher low- tier prizes."

From Minutes of the South Carolina Lottery Commission. March 2005
http://66.102.7.104/search?q=cache:Zho-Dtp4a5EJ:www.sceducationlottery.com/meetings/FullComMinutes3-31-05.doc+jackpot+size+drives+ticket+sales&hl=en
 


ANECDOTAL EVIDENCE 
====================

"Powerball is a jackpot-driven game," he said (Nebraska Lottery
spokesman Brian Rockey). "And when the jackpots are soaring, so is
consumer interest in playing the game, he said.

"I think that since we haven't been able to grow the jackpot to the
$100 million level, the $200 million levels, that it has hurt because
we haven't seen those exponential jumps in ticket sales when that
happens," Stackhouse said.

From "Powerball soon may be harder to win." Journal Star
http://www.journalstar.com/articles/2005/03/22/local/doc423fb7559dfb2990677859.txt


==


"What appeals the most about the game is the size of the jackpot and
that's why most people play," said Brian Rockey, with the Nebraska
Lottery."

"Powerball May Change Odds To Increase Excitement - Nebraska Lottery
Says More People Play Powerball When Jackpots Are Large." KETV.COM 
March 22, 2005
http://www.ketv.com/news/4308915/detail.html


==


"Jackpots do drive sales in multi-state games, however, the most
important jackpot number to consider is the average jackpot size
offered to the players."

From "Powerball is the Best Decision for Higher Net Revenue." The
California Performance Review. August 10, 2004
http://cpr.ca.gov/updates/archives/pdf/09_09_2004/Supplemental/MUSL.pdf


==


"Sree Nadendla, the owner of a Marathon gas station in Green Bay, said
he has seen an increase in the number of customers buying tickets for
the Powerball as the jackpot continues to rise.

"Usually when it?s this big, more people come in to buy tickets," said
Nadendla, who added that his store usually gets flooded on the
Wednesdays of the draw with last-minute customers hoping to get a
piece of the multimillion-dollar pie."

From "$180M pot big draw for Powerball players. Lottery?s sales
expected to rise before next pick," By Malavika Jagannathan. Oct 4,
2005
http://www.greenbaypressgazette.com/news/archive/local_22863252.shtml


==


The larger prize from Powerball affects lower-win lotteries:

"Pennsylvania?s Super 6 lottery game is feeling mediocre these days -
and it has Powerball to blame. Like a three-year-old who pouts while
his parents fawn over their newborn, the lottery game that used to
generate visions of instant wealth and king-of-the-world impulses in
players is taking a back seat to the new, multi-state gambling game
the commonwealth joined on June 27. When compared to similar jackpots,
weekly Super 6 ticket sales are down by nearly half statewide. And its
jackpot is rolling over almost as fast as grass grows during a
drought."

"Nobody really wants to play it," said Jennifer Albright, owner of the
Broadway Lunch & Lottery Shoppe in Hanover, York County, who added
that sales of Super 6 tickets in her store have dropped 70 percent
since Powerball?s arrival."

"There?s some people that stick with it, then they play the Powerball
also. But a lot of people didn?t play the Super 6 when Powerball
arrived," she said.

"Before Powerball, Super 6 jackpots would start at $3 million and
would grow by at least $1 million if a drawing produced no winning
ticket. Powerball jackpots, on the other hand, start at $10 million
and increase by $2 million until the jackpot exceeds $20 million. Once
Powerball reaches that level, it begins to rollover at a rate of at
least $3 million or $4 million, depending on ticket sales."

"Until it?s, like, the same - where we?re at a $10 million and a $10
million - it?s really hard to compare," said Sally Danyluk, Lottery?s
director of public relations."

From "Arrival of Powerball drops sales of Super 6 lottery tickets," By
Mark Shade. http://gaming.issueclips.com/ocFeature.asp?ArticleId=865329
 

==


"I'm guilty of it. I can't really explain it, but when the jackpot is
"only" $2.5 million, I don't go out of my way to get a ticket. In
fact, I have caught myself dissing the smaller jackpots - only $2.5
million, well that's not worth my dollar.  I am not alone.  British
Columbians react to the jackpot.  When the jackpot is small, we buy up
to 11 percent of the tickets nationwide, but when that jackpot gets up
there, we get motivated.  When the jackpot is over $10 million, up to
14 percent of all tickets in Canada are sold in B.C."

See "No More Cheap Dreams of a Jackpot," By Valerie McTavish. May 27, 2004 
http://www.thetyee.ca/Life/2004/05/27/No_More_Cheap_Dreams_of_a_Jackpot/


==

"Customers prefer the astronomically high lottery jackpots, he said,
and Powerball jackpots are always high. "People are weird. They'll
come in and they won't buy a ticket" if the jackpot is just $1
million, Discatio said. "It's like a million isn't good enough for
them, you know what I mean?"

From "Lines long for Powerball," by MEREDITH GOAD. 
http://news.mainetoday.com/indepth/gambling/040731powerball.shtml


==


A simple increase in jackpot size does not always lead to an increase
in ticket sales, as is evidenced by the spate of apathy surrounding
the recent powerball jackpot. Changes in the lotto rules have
increased the prize size, but also increased the overall odds of
winning.


"At $240 million, the current Powerball jackpot is the fifth-highest
ever, but you wouldn't know it from area ticket sales. Retailers and
lottery officials reported Sunday's sales were far from spectacular.
"There's definitely been a drop off" compared to past jackpots of such
magnitude, said Pat Moses, who co-owns Ma & Pa's service station and
convenience store at 506 S. Main St. in Fond du Lac." "Years ago when
the jackpot was this high we wouldn't be able to shut down," Moses
said. "We had people selling tickets out on the curb like drive-up
sales all day and all night."

"Why the sluggish sales for Powerball, which is played in 27 states,
the District of Columbia and the U.S. Virgin Islands? Moses blames
changes in the Powerball game made earlier this year that were
intended to increase sales. Those included increasing the potential
size of jackpots last spring, but also made the odds of winning the
jackpot more difficult, from 120 million to 1 to 146 million to 1."

From "Powerball jackpot not boosting sales - Vendors report unusual
calm for near-record payout," by Dan Benson. JS Online. Oct. 9, 2005
http://www.jsonline.com/news/metro/oct05/361945.asp


==


Can economic conditions effect ticket sales, despite the size of the
jackpot? According to the following article, higher gas prices might
be a factor in cutting impulse buying.

See "Lottery Sales Feeling The Crunch." Keno Magazine. September 23, 2005
http://kenomagazine.com/ManageArticle.asp?c=140&a=1075



================================
HELPFUL ARTICLES ON SWEEPSTAKES
================================

Offering the prize that will attract your target audience is important:

"Add a monthly sweepstakes"

"Giving something valuable for free is a sure-fire way to get some
extra hits. The word about sweepstakes and contests usually tends to
spread well on its own, but running one will also give you the
opportunity to submit to the hundreds of sites that list sweepstakes
and competitions. As a result, you should see a nice increase in
traffic and also get more return visitors as people come back to enter
next month's sweepstakes. Sounds great, doesn't it?"

"Unfortunately, there's a small fly in this soup. The traffic you will
receive is interested in winning the prize, not exploring your site
and seeing what it has to offer. That is why I'd recommend that you
choose a prize that should attract the kind of audience you want to
capture instead of random sweepstake-enthusiasts."

"To give an example, if my site sold gardening tools, I'd set up a
contest where participants could win a set of gardening equipment and
a subscription to a gardening magazine instead of offering money as a
prize. There would be less visitors and less entries, but the people
that would come just might buy something instead of simply entering
the competition and leaving."

"As said above, offering other than money as a prize is usually a good
idea, but you should also prominently display the estimated value of
your prize in dollars. "A set of rare comics" doesn't sound exciting,
but "$395 worth of rare comics" sounds a lot better, don't you think?
Whatever you do, make sure that the prize is worth winning but also
one that you can afford."

From "Increase traffic with return visitors." A Promotion Guide.
http://www.apromotionguide.com/return.html


==


Some sweepstakes pointers that involve cooperation to allow offering a
bigger prize:

One example:

Share The Work, Share The Prize - "When BankRate.com decided to use a
$50,000 contest to acquire new customers, it called upon ePrize to run
the show. The entire contest operation is outsourced to ePrize, from
tracking entrants to navigating legal issues to paying winners. Even
better, ePrize put BankRate.com in a pool with non-competing companies
interested in running a similar sweepstakes. Prospects from each
participating site enter a shared sweepstakes that is privately
labeled to feature the site where they signed
up. All entrants compete for a single prize. The marketer gets to
offer a big prize at a fraction of the cost of running its own
contest."

THE LESSON: Offer a shared contest with non-competing marketers to
reduce the stress and expense to you.

See "Clever Contests" - The BankRate.com Issue # 4.06: March 11, 2003
http://66.102.7.104/search?q=cache:3g-znDytGkQJ:www.gaspedal.net/newsletters/damn/damn_4.06.htm+attract+more+sweepstakes+entries+with+larger+OR+bigger+prize&hl=en
 

==


The following research paper is quite interesting:

"The purpose of this paper is to provide guideline on designing
sweepstakes that will increase consumers? motivation to participate
and thus generate additional sales. The results of the model show that
the sweepstakes reward structure should be based on three factors: the
objectives of the firm, the risk aversion of the customers and the
level of subadditivity. The results of the model prescribes that the
firm should begin by setting sweepstake objectives in terms of either
attracting switchers or targeting current users."

Kalra and Shi: "Consumer Value-Maximizing Sweepstakes & Contests."
Review of Marketing Science Working Papers. Volume 1, Issue 3 2002
Working Paper 2. http://www.bepress.com/cgi/viewcontent.cgi?article=1008&context=roms


==


A fairly inepensive Data Table report might be of interest to you:

"Eleven US magazine publishers with sweepstakes in 1999 ranked by
dollar cost of prizes per thousand pieces mailed, with each
publisher's total sweepstakes mailing volume in pieces, dollar value
of advertised prizes, and dollar value of prizes actually awarded...."

See Research and Markets
http://www.researchandmarkets.com/reports/269572/  

==

The Reggie Award Case Studies highlight some very successful sweepstakes:
http://www.pmalink.org/members/reggies/1998_reggie_winners4.asp
 
==

Articles concerning sweepstakes strategy also caution against becoming
greedy and posting numerous entries which results in a further
division of the prize.

See "The Largest Number Game." William Poundstone, Prisoner's Dilemma
http://www.heretical.com/games/lnumg.html

=====

Finally, some excerpts from a most interesting article with highlights
the correlation between the willingness to pay more for "possibilities
and dreams."

"One of the ways that hedonic and utilitarian consumption might differ
is in the amount of anticipation utility that is derived from each.
Indeed, hedonic goods are not only more pleasurable to consume than
utilitarian goods, but also more pleasurable to anticipate."

"Purchasers of lottery tickets are, in a sense,``buying a dream''
(Landau 1968, cited in Elster and Loewenstein 1992) and that dream
does not require knowing you are going to end up with a prize. Further
evidence that probability does not increase anticipation utility comes
from work by Vanhuele, Laurent and Chandon (1996). They demonstrate
that the best predictor of whether consumers will buy a product with a
promotional sweepstake is not whether they understand the odds of
winning or of the value of the prize(s), but whether they have
fantasized about the possibility of winning. Indeed, they found that
those attracted to promotional lotteries did not think that they had a
higher chance of winning than they did, or that the prizes were more
valuable than they were. What distinguished those who were attracted
to lotteries was simply that they had anticipated the possibility of
winning, and enjoyed daydreaming about it, regardless of how likely or
unlikely they were to get it. This suggests that it is not just a
chance at the utility of the prize itself, but also the utility of
anticipation that comes with the mere possibility of winning that
attracts individuals to lotteries. Therefore, standard calculations of
expected value cannot capture the total value of a lottery ticket, and
a more accurate estimate of the value of that ticket would incorporate
the enjoyment derived from merely imagining the prospect of winning.
Such a calculation would allow for the fact that lottery participants
may derive enjoyment from simply being entered, even if they never win
anything."

Read "Probability and Mode of Acquisition Effects on Choices Between
Hedonic and Utilitarian Options," by SUZANNE O'CURRY and MICHAL
STRAHILEVITZ. Marketing Letters 12:1, 37±49, 2001.
http://marketing.eller.arizona.edu/docs/ms/Probability_mode_of_acquisition_effects_on_choice.pdf


===


 I hope these references are helpful. If I can clarify anything
further for you, please let me know.


Sincerely,

umiat


Search Strategy

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---

Request for Answer Clarification by corelcorp-ga on 24 Oct 2005 09:49 PDT

Hello again:

Thank you so much for your hard work! This information is very
helpful. As you indicate, information about sweeps is all over the
map. I'm interested in this topic as input into a possible marketing
promotion. We're trying to decide how much offering a $50,000 prize
draw ballot with purchase would likely be to increase
purchase/participation rates than if the prize draw amount were only
$25,000.

I surmise from your responses that the size of the prize amount would
have a positive effect on purchase/participation however, it is not
possible to estimate it's incremental lift over a smaller prize. So
for example, we wouldn't be able to say that a prize amount of $50,000
(twice the size of a $25,000 prize) would likely increase
purchase/participation by twice as much. However, it appears that it
would likely give us some lift. Would that also be your conclusion
given the context I've described -- and in light of your research?

I realize this may be a difficult question to answer and that you have
put hours of time into this query already. Thanks once again for all
you've done. Your work has been more than just helpful and I'm
extremely impressed with its thoroughness. Excellent work!

Thanks once again.

---

Clarification of Answer by umiat-ga on 24 Oct 2005 11:46 PDT

Hello, again, corelcorp!

Your assumption about my research is correct. I found no direct data
to support a percentage increase in participation in relation to a
specific increase in the prize amount offered. However, my research
does show that interest increases with the size of the prize.

The biggest hurdle in terms of sweepstakes, it seems, is getting the
sweepstakes information before your target audience. That's why I
brought up the potential of viral marketing as a means of increasing
the knowledge about a particular promotional offer. However, this
would apply more directly towards an online marketing campaign where
those who become interested in a sweepstakes offer through "word of
mouth" would have an easy method of participating.

An example of how viral marketing might work:

I buy all my camping gear from xxx store in my local town. However, my
friend, also an avid camper, orders their camping gear from YYY online
store. He just told me that YYY online store is entering the names of
all customers who order $200 worth of merchandise between 11/2/2005
and 12/2/2005 into a sweepstakes to win a $10,000 prize. While I would
not ordinarily shop at this online store, I might just change my
habits in order to have a chance at the prize. After all, I need new
camping clothes/gear anyway, and this store just might offer some new
and interesting items. If the prize was simply $1,000, I would
probably prefer to stick to my local store, since I "doubt I would
win, anyway." But the $10,000 sweepstakes is enough to persuade me to
take a look....

=

In the same way, I believe the size of the prize determines how far
you out you can reach into the "orbits" of your existing or potential
customer base. A larger prize generates more interest among those who
would otherwise remain apathetic if the prize were substantially
smaller. After all, entering a sweepstakes does take a little effort,
so you need to break through various levels of financial comfort among
your target audience and get their pen to a postcard, their hand on
the computer mouse, etc.

=

Unfortunately, "how much" extra interest in relation to the size of
the prize still remains the issue! I think this kind of data can only
be generated through specific company history with their own
sweepstakes. The company in question will have to determine what
percentage of their financial resources they are willing to expend
toward experimentation in a sweepstakes marketing campaign.

=

I hope this helps!

umiat


Just another very general article:

"Hitting the Marketing Jackpot Through Sweepstakes."
http://www.motivationshow.com/article31

Excellent. Saved us hours of time and was much more thorough than we
would have been given the amount of time we had available to research
the topic on our own. More than that, the interpretation and analysis
provided to us is what really made the research useful, and
actionable. Will definitely use the Google Answers service again.
Thanks for the great work!

Hi,
Because no one can say what the increase in sales would be if you
double the prize, it could be worth considering what additional sales
you would need to cover the amount of the larger prize.  If it is a
low percentage of your present sales, obviously the risk would be less
and the upside potential greater.
I don't know your market, how price-competitive it is.  There is the
possibility that a competitor would jump on the bandwagon and offer a
larger prize.
There is also the question of what amount makes your customers' eyes
glisten in anticipation.  That depends on your customer profile, of
course, what does $25,000 represent to them, what, $50,000?  Or $
33,333, to be cute about picking an amount that is not big and round.
For example, if a new car is for younger people what they are all
dreaming about, the prize should make this possible.  The sky's the
limit on car prices, but there is market information on what your
major customer age group will pay.
That is just an example, of course, inspired by that girl smiling on
the Corel Corp. website.
I hope this is of some help, Myoarin

Let me just refer you to this question and answer about sweepstakes. 
It seems a bit more complicated than at least I understood:
http://answers.google.com/answers/threadview?id=574245