When it comes to audience-building tactics in social media, one of the most commonly used strategies is to hold a contest. A few years ago, an iPad or other high-end prize could generate an absolutely amazing amount of interaction online, but people seem to have become a bit jaded since then.

Is a contest still a useful marketing tactic on social media channels? Most people will answer “it depends on your goals,” but in a very broad sense, the goal of any contest on social media is to increase audience size and interaction.

We recently ran a contest on our social media channels. There were two prizes – a Fitbit Charge HR and a S’well water bottle.

meemim prizes

For the most part, we are satisfied with the results – it’s a challenge to grab people’s attention in a busy world while simultaneously advancing your own marketing efforts. However, there are also important lessons that we took away.

Our contest objectives

Before you hold a contest for your company, it’s very important to define the goals. You might be looking to increase brand awareness and site traffic, gain social following, or simply make conversions. Knowing what your goals are allows you to refine your contest communications strategy.

Our primary goal was to send traffic to our website, and our secondary goals were to increase follower numbers and build general awareness about our company.

Investment

In order to calculate the return on investment for the contest, we first need to calculate the investment.

The first item is the cost of the two prizes: the Fitbit cost $169 and the S’well water bottle cost $45.

Next is the investment in time. As a business, you get to set the rules for the contest. This means you can structure it to accommodate as much (or as little) effort as you’re looking to spend. We set up a very simple contest and this made it easy for people to enter (a low threshold of entry), as well as making it easy for us to administrate.

Between everyone involved, the staff time for the contest added up to about 15 hours. For the sake of cost calculation, let’s say that time cost us $40/hour.

Here’s how our time broke down for contest administration:

  • Brainstorming (0.5 hour)
  • Research (1.5 hours)
  • Pre-launch preparations (4 hours)
  • Launching and promoting the contest (6 hours)
  • Post-contest promo and activities (3 hours)

When you add that to the cost of the prizes, our total cost came to $814 ($600 for labor and $214 for prizes).

Return

Overall number of entries:

  • Facebook: 66
  • Twitter: 79
  • Instagram: 114

Increase in quality followers:

  • Facebook: 18
  • Twitter: 283
  • Instagram: 28

Overall number of interactions:

  • Facebook: 145
  • Twitter: 2,590
  • Instagram: 327

So, our cost per new follower was $2.47, and our cost per interaction was $0.27. While these social media gains appear modest, they don’t show our most impressive results – traffic. Over the lifespan of the contest (including followup articles), we received over 3,000 visitors and 15 signups attributed to the contest.

Also, the social media engagement rate during the contest was 3.8 percent, up from the average 1.5 percent outside of the contest window.

If we were to run Google Adwords to generate site traffic, the price for a click in our space is about $1.70. This means that the cost for achieving this traffic via Google Adwords would have been about $6,800. If we use this as a benchmark, our contest drove almost $6,000 in value for the company, and we achieved social media outcomes in the form of followers and interactions that we would not have accomplished with a basic Google Adwords campaign.

While we consider the contest a success on the basis of increased traffic (see the spike in website visits during the contest towards the end of the graph), we felt that it could have done even better.

Meemim - giveaway contest

Lessons learned

Contests can occasionally take on a life of their own, where they will be shared through social channels without any effort on your part. While you can encourage this result by having people share the contest for additional entries, there is never any guarantee that the contest will become viral.

We achieved strong results in our contest, including a reasonable conversion rate overall. However, when we looked closely at how the contest messages had spread across social networks, we realized that our efforts could have benefited from increased promotion.

In our case, a better strategy for promoting the contest would have undoubtedly led to more impressive outcomes. Furthermore, we determined that a different preparation strategy would have magnified our results across all metrics at least three-fold. Those are the lessons we’re keeping in mind for our next contest. And yes, based on our results, we’re definitely doing another one.

Looking at our preparation and promotion strategy

What we did right:

  • We researched our target audience and determined their prize preference.
  • We built an engagement strategy for each platform that took into account hashtags, images, and messages that would resonate with our target audience.
  • We developed a social media calendar that scheduled updates and notifications to help promote the ongoing contest.

 What we could improve:

  • We neglected influencer engagement. We should have identified influencers and begun engaging with them at least a month prior to the contest. During the contest postmortem, we were able to identify three influencers in our space who could have increased our reach from 6,000 to over 28,000 people.
  • We didn’t fully study best practices and strategies for running a contest before designing it. The “build it and they will come” approach doesn’t work. Investing the time in advance to perfect the small details would have gotten us the best results.
  • We failed to fully develop distribution channels that would maximize our reach.

Looking at how we ran the contest

What we did right:

  • We were consistent, sticking to our strategy and only making minor adjustments as needed.

What we could improve:

  • We spent too much time shouting into emptiness. Better message distribution channels would have reached a much larger number of potential contest participants.

Conclusions

For startups and small-to-medium businesses, building awareness in the marketplace can be a huge challenge. Even the most brilliant business ideas fail if they don’t find a market. Contests can be an excellent tactic to grab an audience’s attention, and they don’t need to be expensive to work. As you can see from our numbers, our contest did work for us.

Our next step will be to take what we have learned from our first attempt and put together another one that does an even better job of supporting our goals. The three lessons we’re taking to heart for our next contest are:

  • Influencers: approach influencers and get them engaged in the contest well in advance so that they can help announce the giveaway and promote it to the world.
  • Planning and research: spend more time researching the most appropriate contest distribution strategy – learn from the experience of others.
  • Contestants: communicate with the contestants more frequently to help them feel more personally engaged and motivated. Their conversations and engagement help promote the contest as well.

[A version of this story originally appeared on Meemim’s blog.]

Alec Pestov is founder and CEO of collaborative software startup Meemim.

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