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Working out return on investment (or ROI) for any marketing campaign is an essential step to evaluating which marketing tactics work best for your business – and potentially identifying which marketing strategies are costing your business more than they’re contributing to it…

Don’t flush your marketing dollars down the dunny, like fran hogan on Unsplash.

Competitions are an incredibly effective way to smash your marketing goals; but how do they fare when it comes to paying you back the time, money and attention you invest in a giveaway or contest? In this blog post we’ll delve into why you should care about calculating your competition’s ROI, how to calculate ROI from your competition and what kinds of return on investment you can expect from your competition.

Why you should care about calculating competition ROI.

Calculating your competition’s ROI is useful for assessing whether a competition is a worthwhile investment or marketing tactic for your business.

For example – if you invest $3,000 in a prize and $2,000 in advertising your competition, you want to make sure your competition was worth that $5,000 invested, right?

Similarly, if you have $10,000 to invest in promoting your business, you’re going to want to know whether that money is best spent on a competition or giveaway to boost your business, or whether putting that money straight into Facebook Ads, Google Adwords, an incentive scheme, local radio ads or flyer drop, to name just a few alternatives, is going to be more effective.

The only way you can know where best to invest your marketing dollars is by calculating the return on your investment from your marketing activities.

How to calculate ROI from your competition.

Although there are several ways to calculate monetary ROI, a common, if over-simplified way is:

(profit – investment) / investment = ROI

Or in other words, what you made minus what you invested divided by what you initially invested in the competition.

For example, if you spend $4,000 on a competition campaign and as a direct result of the competition, you make 3 new sales at $5,000 each, netting $1,500 gross profit a piece, you’ve spent $4,000 on marketing to make $4,500 profit:

($4,500 – $4,000) / $4,000 = 0.125 (or 12.5%)

This is, of course, an extremely over-simplified example with a pretty generous profit margin to make the maths clear, but the idea is the profit return is higher than the initial outlay.


Whilst profit is a clear motivator and easily measurable aspect of marketing campaigns, there are less tangible ‘returns’, such as brand awareness, leads generated, registered interest or attendance at an event for example. ROI essentially comes back to your goal. If your return (or goal achievement) is worth the amount of money you invested in the competition, competitions can still be considered a good return on investment.

Your competition’s return on investment could be measured in sales generated, cost per lead acquired, cost per email address or or cost per conversion to your desired action – these metrics could then be used to compare performance against other marketing tactics.

At OrigamiGlobe we keep an extremely close eye on the key stats and analytics that matter to our client’s business, to help them understand how competitions stack up against other marketing activities they’re engaged in.

Here’s what we do to ensure we can easily calculate ROI from our competitions:

  • Early on in the competition we set a budget – and stick to it.
  • Before, during and after the competition, we benchmark the client’s key metrics to ensure we’re focussing on what matters to them and not letting vanity metrics get in the way.
  • After the competition is closed, we provide a comprehensive ROI debrief document that explains exactly what stats we tracked and why, what those stats mean for their business and how they can use them in future marketing campaigns and – in terms of ROI – we summarise the key returns on their investment both monetary and otherwise.

What kind of ROI can I expect from my competition?

Let me just fetch my magic 8 ball…

Magic 8 ball image by Wilson Blanco from Pixabay.

“Reply hazy, try again.”

OK, sarcasm aside, I can tell you that the more effort you put into promoting your competition, the more entries you’ll receive… and if you’ve chosen an appropriate entry method for your competition to help you achieve your business and marketing goals, then more entries should mean more chance of creating a solid return on your investment in competitions.

If you feel wholly unsatisfied with that answer, I don’t blame you. I’m a numbers nerd and love a quantifiable way to measure something too… But unfortunately there is no quick and dirty formula that will tell you exactly what ROI you can expect from running a competition.

That said, I’ve been doing this a very long time, so you’ll find some solid tips on how to maximise your ROI and keep your costs down in this blog here.

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A note on running a competition to ‘get rich quick’…

Competitions are not a get rich quick scheme.

Contests, giveaways and competitions are designed to be part of a larger marketing strategy that will create steady, reliable return on investment and loyal, engaged customers that spend money with you again and again.

We often receive requests from people to help them set up a raffle site, whereby they sell tickets and from the proceeds purchase the prize and pocket the rest as profit. We’ve already gone into detail about how we can’t help set up a raffle site, so I’ll just summarise the key message: you cannot run a competition just for profit. You cannot even run a raffle in most states and territories unless you’re a registered charity or club.

So let me repeat: competitions are not a get rich quick scheme.

Calculating the return on investment from your competition is incredibly important to track how well competitions work for your business and how effectively they can help you reach your business goals. Commonly, we track ROI in terms of dollars spent versus dollars earned as a result of the competition, but there are other metrics that can help you assess the impact a competition has on your business. As long as you keep an eye on how much you’ve spent and what results you’ve gained by running a competition, you should easily be able to calculate your competition’s ROI.

If marketing acronyms aren’t your bag, why not trust our team of competition experts to design and run the perfect competition that will smash your marketing goals out of the park? We have a range of done for you services, or you can get in touch with our team to discuss your specific business and competition idea.