Monday, May 17, 2010

Contests & Giveaways--Good Idea or Legal Problem?

Everybody likes to win stuff, right? Brands must think so because a cornerstone of social media marketing seems to be the contest: blog giveaways and Facebook contests, in particular. Especially in mom blogging, giveaways seem to be a great idea: brands get the magical juju that being mentioned by a bonifide mom blogger brings--for free--and bloggers get to trade a prize for page views, followers and retweets. Everyone wins, right?

Actually, wrong. Because while bloggers benignly offer "extra entries" if you retweet or subscribe or in some other way promote their blog, they're actually breaking the law. A lottery is defined as having "all three of the following elements: chance, a prize and consideration." Consideration is defined as "anything that requires a participant to expend a monetary amount or significant effort to participate"; however, in the eyes of some states, "any benefit to the promoter is consideration." Certainly an argument could be made that retweets, followers and/or subscribers are beneficial to bloggers, since those are what their value to brands are made of.

How about those Facebook contests big brands like Toyota are spending big bucks on? Bet they don't realize they're also breaking the law by requiring entrants to "like" Toyota Sienna to enter. Funny, they don't disclose that in the official rules, but there it is on the entry page: "Only users who "Like" Toyota Sienna are eligible to enter"

I think a case could be made that requiring an entrant to "like" your brand in order to enter falls under the category of consideration. After all, hasn't the case been made that a Facebook Fan (now "liker") has a cash value?

All I know is that lawyers cost a lot--does the potential ROI of that contest or giveaway take into account possible legal actions against you or your brand for conducting an illegal lottery? (And if anyone decides to sue Toyota for this contest, I want in on your winnings!)

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