Twitter-Based Prize Promotions: Tweeting for Trouble

Twitter, the social networking site and service, has become a very powerful tool for marketers. Twitter allows marketers to reach consumers directly, bypassing spam filters and enabling both one-to-many and one-to-one interactions. Twitter is also international, as shown with the recent use of the service to publicize events in Iran even when cellphones and other media outlets were blocked. While Twitter does not lend itself to multimedia ad campaigns (it's limited to 140-character text messages only, which cannot include graphics or HTML tracking tools), its immediacy and push nature (Twitter messages, often called "tweets," are transmitted to users accessing the service via 3rd party software and via SMS alerts) can be very powerful.

The major element that makes Twitter a "social" network rather than simply a message service is the ability for users to easily "retweet," to re-send messages they've read and want to share to their own list of followers. It's like those classic Faberge television commercials, except instead of one's Twitter followers telling two friends, they may each be telling hundreds or thousands, who can then easily decide to follow the original user with a click if they find the retweeted message interesting. The trick, of course, is how to encourage users to retweet.

One answer that's growing in popularity is through a Twitter-based prize promotion such as a sweepstakes or contest. Generally, these work as follows: in order for a Twitter user to be eligible to win a prize, she may need to follow the account giving away the prize, and/or then either retweet about the promotion or otherwise incorporate it into her own tweets. Often, prize entries are tracked through the use of "hashtags," words preceded by a # sign, making it easy for the marketer to track the entries using Twitter's built-in search engine or the search functions built into popular Twitter software like TweetDeck. At a certain point, the marketer will end the promotion, and draw one or more winners from among the eligible tweets. If the prize is sufficiently attractive, the number of entries (and therefore the number of advertisements) can be tremendous. For example, Web host recently launched a promotion to give away 10 Apple Macbook Pro laptops to those who included the tag "#moonfruit" in their tweets, one site counted more than 408,000 tweets including the tag over seven days, with the most prolific user contributing almost 3,000 tweets (and therefore entries). (One blogger wrote a comprehensive analysis of the Moonfruit promotion, available here.)

The problem, though, is that few if any of these promotions is in compliance with relevant laws, and even when marketers do include rules (as did Moonfruit), they may not be complete or properly done, especially given the borderless nature of the Internet and related rules like COPPA (the Children's Online Privacy Protection Act). It's difficult enough to comply with the differing laws of the 50 states of the U.S.; given the international nature of Twitter, well-meaning marketers may find themselves facing, and violating, multiple countries' laws. (In my book Clicking Through: A Survival Guide for Bringing Your Company Online, I discussed a 1996 Sun Microsystems prize promotion which faced this issue, and for which Sun spent thousands of dollars ensuring compliance.) Further, by asking users to retweet in order to enter, marketers could be found to be running an illegal lottery rather than a sweepstakes, given that regulators may deem almost any required activity on the part of entrants to be equivalent to asking them to pay or give other consideration, the essence of a lottery. Nor will it be difficult for law enforcement officials to discover these illegal prize promotions-all they need to do is maintain an ongoing search likethis one to find many of the potential violators.

This does not mean that one may not use Twitter for marketing, or even for prize promotions. It is crucial, though, that marketers (particularly those that may be larger and more likely to attract legal attention) ensure that their Twitter-based campaigns and sweepstakes are in compliance with applicable law, just as they should for their other online and offline marketing efforts. Otherwise, they could find themselves tweeting their way into fines and lawsuits, rather than increased market share.

Our Promotions and Sweepstakes Marketing and Internet Law practices can be useful resources in these types of matters. You can also follow me on Twitter as @ProfJonathan.

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