The last thing anyone wants, is to spend their marketing money on a competition or giveaway and get nothing in return.
So how much does a competition even cost? How do you know how much you should spend… or how much is too much? We’ll cover all of these things – and more – in this rather epic post on competition budgeting.
How much does a competition cost?
Here are the main costs you will need to consider when planning your competition budget:
- The prize itself (including delivery or the cost of your time)
- Any competition apps you may need to run the competition
- Your marketing material (banners, social posts, blog posts, emails etc)
- Licences and permits
- Terms and Conditions
- Paid promotion or ads
- Third party help such as competition experts or web developers
These costs vary from competition to competition, business to business and you can always scale your giveaway to suit your budget.
For example, to avoid licence fees, you could run a game of skill instead of a game of chance or choose to run your competition on your website, negating the need for third party app costs.
So how much should you spend?
I’m going to duck as I say this, for fear you’ll throw things at me: it depends.
In all honesty, it does depend on a few things – your bank balance, your target audience and your timeframes to name just a couple.
You can get away with spending the bare minimum on a prize, the licences and the T&Cs and do everything else yourself to save money (but not necessarily time); or you might decide give away a solid gold, diamond-encrusted, unicorn-tear powered private jet every minute of your three-month long competition, paying every single advertising channel to simultaneously and continuously broadcast your ads 24 hours a day…
But let’s be sensible, where are we going to get unicorn tears from?
OK so I may have (slightly) over-exaggerated there, but you get the picture, it’s up to you how much you spend. You could spend as little as the cost of the prize or as much as your marketing budget allows.
Don’t worry, we’re not going to leave you to figure it out entirely on your own…
If this is your first competition rodeo:
If this is your first ever competition, we highly recommend doing as much as you can yourself to keep your spend to a minimum.
Your first competition is your chance to test the waters to find out:
- If your audience actually wants to and will enter your competition…
- … and if they do, what works and doesn’t work for your unique concoction of brand, products/services and target audience.
You want to work this out before you invest more time, money and brain space on running a huge all-singing, all-dancing, all-star competition.
TIP: if this is your first time running a competition, you might want to check out our competition in a box package that walks you through creating a competition, step by step, from ‘hmm, I should run a competition’ to ‘wow that was awesome, let’s do it again!’
Enjoying our competition budget guide?
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If you’ve run competitions before and you’re ready to invest:
If you’ve run competitions before, you know their awesome potential and you’re wanting to step up your game to get even better results; it’s time to scale your competition efforts and push more money into what works for your business.
With bigger budgets come more opportunities – to build on what you already know works, to get in front of more people and to experiment with paid advertising.
Take a good look at the results you’ve gained from previous competitions and see what patterns you notice – how many entrants became paid customers? Where did most of your entries come from, paid or organic? Which channels? Which posts got the most engagement? You get the idea.
Take what worked last time and scale it.
Google Analytics is a great place to learn more about your audience, their interests and behaviours so you can really tailor and target your competition to your ideal client and stand the best chance at turning them into paid clients.
Oh and if you want someone to help you scale your next competition – ahem – you know who to call.
5 tips to avoid overspending on your competition.
It’s easy to get caught up in the excitement of a promotion and before you know it, your competition spend is out of control.
Here are our five top tips to avoid overspending on your competition or giveaway:
- Set your budget in advance and stick to it. No ifs, ands or buts. That means keeping an eye on what you spend and where you spend it during your competition too.
- Don’t get tempted by Facebook (or any other platform)’s cleverly crafted notifications to get you to ‘boost’ your posts. Any paid promotion on social media should always be done through the ads manager platform so you can control the spend and clearly see the results.
- Test, test and test again! Want to know if more people would enter to win a case of champagne or a case of red wine? AB test it! Want to know if a short social post converts more entries than a long caption? Test it!
- You don’t have to spend up big on your first competition. You can always DIY for the first time, and when you get great results, then invest the dollars in what you know will work.
- Don’t think a more expensive prize is necessarily the best prize. The main focus is to give your audience what they want. If they love your boho jewellery, give them a bumper boho jewellery box packed full of your favourites or even old stock you can rebrand as ‘exclusive’ or ‘limited edition’ as it’s not available anymore. Regardless of dollar value, the perceived value of a prize is what counts.
You could easily throw $10k at a competition, but with no strategy or reasoning behind where and how you spend that budget, you’re not going to see a great return. At all. You don’t need a huge budget to make the most of your competition or giveaway – it’s about being strategic with what you do spend, whether it’s $50 or $50,000.
If you need a hand working out how to maximise your budget, book in a totally relaxed, no pressure chat with our competition nerd. Any excuse to talk about competitions, right?!