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WHY PERMITS & TERMS AND CONDITIONS? – They cover you, your agency and your client.

Permits are considered expensive, time consuming and an all-round hassle, however, they are legally mandatory if you are running a promotion that has an element of chance.

Terms and Conditions are required for EVERY competition you run, whether it is a game of skill or a game of chance, and are considered the ‘rules of the game’. They cover the basic things like open and close dates, prizes, and competition mandatories. The Terms and Conditions must detail all conditions of entry.

Rules for running competitions are different in every state with only some states requiring permits, and various types of competitions being exempt. This is where you need to call a Promotional Marketing agency expert or specialist Promotional Marketing lawyer for the correct up-to-date information.

There are ways to run smart competitions; this is where the science of prizing comes in, and the expert knowledge of how to run a promotion minimising the permit costs and application times.

Game Of Skill Vs Game Of Chance – what is the difference?

A game of chance is when someone has a random chance of winning.
Example of a game of chance: “buy this product for the chance to win $50,000 cash”.

A game of skill is a competition utilising judges for the outcome.
Example of a game of skill: “Tell us in 25 words or less why you like a product”.

A game of skill is generally judged on either creative or literary merit, but might also be the closet correct answer in something like a ‘jelly bean’ guessing contest. Merely asking someone a question does not constitute a game of skill; as soon as more than one person can get a correct answer, the rules change and the competition becomes a game of chance (requiring permits).

When are Permits required?

All promotions, which contain an element of chance in the winner’s outcome (e.g. via a draw, instant win, etc.) are known as “trade promotion lotteries” and require a permit number.
Permit requirements vary depending on state, promotion mechanics and total prize pools.

Permit fees vary depending on state, promotion mechanics and total prize pools. Permit fees are worked out on the total value of the prize pool.

Blanket Permits are a great option if you plan to run several trade promotions in a defined period (1 year). This is how the radio stations are able to constantly have competitions on air. They still require permits, but we can apply for a blanket permit and then update the Terms and Conditions for every promotion

CONSEQUENCES – what can go wrong?

Terms and Conditions play an important role in protecting all parties involved in the promotion. They create a fair playing field for all and leave no room for misinterpretation. The promoter and agency are able to use these as a reference and fall back when speaking with entrants and winners.

The Terms and Conditions are a contract and when finalised cannot be changed or altered once the promotion has started. Permit changes can be made prior to launch or publication but new permits need to be applied for and this can take additional time. Permit numbers MUST appear on all promotional material along with other legal mandatories such as open/close dates, draw dates, onerous conditions, etc.

Simple mistakes can happen and a great example is calling a winner who doesn’t answer, leaving a message and then calling the next person on the list. Trust me, this happened and it cost an agency $15,000 to rectify.

Every competition needs some type of conditions of entry. Without these guidelines, the promoter (your client), your agency, and in some cases YOU can find yourselves in breach of the Competition and Consumer Act 2010. Breaches can attract big fines, especially when things like privacy come into play.

Terms and Conditions are often considered an afterthought that nobody reads. In fact, they are more widely read than you would think. Sadly, in many cases consumers are looking for ways to get around the rules or to see if there is some type of loophole overlooked when devising the promotion. Remember, you don’t want the negative PR story on ACA from a jilted winner.

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Promotional campaigns have many purposes and can achieve strong results for your brand, but there is a science behind getting them right.
Research shows us that around one in every eight promotions fail. While this is a significant number, it only takes a few small things to make them successful, so if you are thinking of running a sales promotion as part of your overall marketing or brand activation strategy, before you leap in, consider the following tips:

#1 – PROMOTION OBJECTIVES:
Why are you doing it, be clear so you can assess the outcome. A promotion without objectives and clear measurable KPI’s is a waste of time and money. Promotions done correctly can help you gain brand awareness, trial and/or loyalty. How you run your promotion will depend on the outcome you wish to achieve.
#2 – KNOW YOUR AUDIENCE:
How they enter promotions; online, SMS, paper entry form, etc. What they want to win, how they want to win it. If you get the prize right and match the prize to the target market, you will have a better rate of participation. Make sure the prize is popular and useful to your key audience, as it will make people want to enter.
#3 – THERE IS A SCIENCE BEHIND PRIZING:
Consumers want to have a good perceived chance of winning to make it worth their while entering the competition. With this in mind, three prizes are better than one, but more than three adds to cost, not the predisposition to participate*. Consumers have a significant preference for instant over delayed gratification by around five to one*. Research shows us that drawing prizes throughout the promotion is much better than a major prize at the end.
#4 – LEGAL REQUIREMENTS:
Know the difference between a game of skill and a game of chance and when you do and do not need a permit.
A game of skill is a judged competition; a game of chance is when someone has a random chance of winning. Asking a few questions does not constitute a game of skill, as you are likely to have more than one winner.
A game of chance requires a permit and the rules are different in each state. Permits are payable on the total value of the prize pool. It is best to speak to a promotional marketing lawyer or a specialist promotional marketing agency for all the most up-to-date information.
Promotions need Terms and Conditions. They protect both the promoter and the agency. The Terms and Conditions are a contract and once finalised cannot be changed or altered without alerting the relevant permit authorities.
#5 – MAKE IT EASY:
Easy to enter, easy to find, easy to understand. The more complicated the mechanic the more likely consumers will not be bothered to enter. Many of us will have experienced entering a competition through answering a number of questions only to find the final entry detail is to provide a submission in 25 words or less. Research shows that about 60 per cent of the people who would have entered will give up*. If you make a consumer work too hard for you they give up really quickly.
#6 – MANAGE WINNERS EXPECTATIONS:
Although many prize-winners will be elated to have won, some winners may be impossible to please. This is where the Terms and Conditions can help. Terms and Conditions should include a clause that refers to any changes to the prize not being permitted unless the promoter gives consent and it is in writing and agreed by both parties. Remember, not transferable or exchangeable for cash means exactly that.
#7 – PROMOTE THE PROMOTION:
The best promotion in the world won’t get any entries if people don’t know about it. If it is not on pack and there is no communication in-store, think about other opportunities to promote, such as consumer magazines – the supermarket ones are good – and online publications, but be specific about which ones you are targeting. Also use social media channels to help generate word of mouth and drive people in-store.
And the last word.
#8 – PROMOTIONS ON SOCIAL MEDIA:
Promotions on Facebook are governed by very strict Facebook rules. Make sure you are familiar with them before running your promotion. You also need to make sure that you include promotional mandatories (open and close dates, draw dates, permits, etc.) on your materials.
Check your comments regularly. I have recently seen some unsavoury comments relating to voting and ‘Like Me’ competitions on some client sites. Be sure to monitor traffic. I can’t stress this enough, especially due to laws that have come in this year relating to corporate Facebook pages, and have a strategy to deal with anything that arises.
Promotions can be very successful if conducted with all the right elements. There are specialised agencies that work in this field and it is best to engage them early in the process so they can assist you in the strategy, planning and implementation stages. This, along with following the key steps covered, will ensure that you reap the benefits that successful consumer promotions can bring.

*IMI Consumertrack 2011
IMI International specialises in researching what consumers want in this area.

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We say it on our website; we try and live and breathe it with our clients, and embody it in our lives. Sometimes it can be a challenge to remember to do it, but delivering and consistently so is what sets us apart as an agency and as people.
It can be as simple as doing what you say you are going to do, or doing that little bit of ‘unexpected extra’ for a client. It can also be about sending a personal note, taking care to ask how someone is, sending a relevant article, celebrating successes, servicing a client exceptionally and being acknowledged for it.
But it is also about how we manage ourselves when things don’t always go as planned, or when we are struck by the unexpected. I recently lost my father after a long battle with Dementia. I was amazed how many people where there for me in so many other ways other than just offering a shoulder to cry on.
Everyone I was able to call on to help our family delivered more than I could ever have imagined and I am proud to say that it is a result of the way I live my life. I am not just talking about friends and family, I am talking about strangers and colleagues that were called upon to assist in the preparation and planning.
Yes it was an exceptional circumstance, but it was so gratifying to see passionate people delivering and exceeding expectations to make this transition time just a little bit easier for us.
So I take heart in the fact that living and breathing a delivering mentality; one that strives to deliver great work, great service, great gratitude and great leadership, great training, great friendships and importantly great love is the way that I want to live.

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