Preparing a Safety Net
The Web provides a Wide World of promotional opportunity – but also a new window of peril.
It is wonderfully ironic that the once-insignificant dot is now the root of one of the most sweeping developments in human history.
To marketers, “dot-com” has almost become a universal quest, an uncharted, boundless, and highly efficient avenue for targeting existing and potential customers.
But the Internet is a medium whose promotional message still needs some decoding – especially when it comes to finding ways to attract consumers. Currently, the most popular methods are discounts, product or service giveaways, sweepstakes, games, or contests, and other tactics that let visitors feel like they’ve earned something by being cyber-savvy. Such promotions can be the raison d’etre of a gaming site, a splashy banner or cookie on an e-tailer’s home page, or a virtual component of a brand’s integrated marketing campaign.
“The Internet is an excellent communications tool for your everyday, garden-variety promotions, to the extent that they can be advertised by e-mail, banner ads, hot links, or on the sponsor’s home page,” says Bob Hamman, founder and chairman of Dallas-based SCA Promotions, which offers prize coverage and risk management services.
The sheer volume of responses that can be generated – traffic tracker PC Data Online, Reston, VA, estimates that two out of every five Web users visited a sweepstakes site in September 2000 – and the relative inexpensive back-end costs make the Internet ideal for marketing, which is why packaged goods companies are increasingly using their corporate Web sites – or ad hoc URLs – as the primary method of entry for their offline promotions.
Full Disclosure Web-based games and contests generally are used to entice someone to place an order online or to gather valuable marketing information by requiring entrants to fill out registration forms. Legally, there remains a lot of gray area as to how such data can be used.
“Consumers may understand the medium, but they’re not always aware of the nuances of the technology,” states Martin Cohen, founder of Cohen & Silverman, a New York City law firm specializing in promotion law. “For instance, a computer can have a cookie placed on it that will, in effect, report on all of the activities of its owner whenever he goes online. Many people don’t understand that concept.” If and when they find out, there is a chance they might object to such an invasion of privacy.
While it’s not (at least yet) required by law, conscientious Web sites will post privacy policies stating the intended use of any personal information collected. They often provide a way for visitors to accept or refuse future communication from the site’s host or other parties, typically with a box to check or uncheck. Many times, though, the box is automatically checked “yes,” putting the burden – many say improperly – on the consumer.
“It’s always our recommendation that if you’re going to send some future communications, let visitors to the site know that and give them the opportunity to opt out,” says Cohen.
Child’s Play One issue that’s no longer gray is the privacy of children 12 and younger. After several high-profile cases involving pornography and other lascivious behavior, the Federal Trade Commission stepped in and secured passage of the Children’s Online Privacy Protection Act.
“The law sets guidelines for dealing with children with respect to the collection and use of any data from them,” Cohen explains.
Naive as to how it may be used, kids are all too willing to provide information about themselves and their families in order to gain access to certain sites, enter contests, or receive other benefits.
The law now stipulates that marketers can make one contact with children to say hello and tell them about a particular program – and that’s about it. Any future contact must first be approved by a parent or guardian, who will then serve as a go-between. (Marketers can e-mail kids a second time to advise them to have an adult respond. Adults can be contacted by e-mail, phone, regular mail, or other traditional means.
“It’s a little bit difficult on those who want to collect data,” because the onus of contacting a parent or guardian falls on the sponsor or the collector of the information, says Cohen.
As in the offline world, online sweeps, games, and contests must provide official rules including, when applicable, alternate means of entry that don’t require a purchase or other consideration, eligibility, prize structure, and odds of winning.
Hacker Proofing The security issue has different levels. The first involves making visitors feel safe about supplying information, (which relates to the privacy discussion above). The second is making a promotion safe from nefarious visitors.
For instance, security risks can arise when a promotion allows individuals to submit more than one entry. “If a program does not limit the number of entries that may be submitted, you will find individuals skilled at computer technology [who] may create a robotic program that simply floods your entry process,” says Cohen. “That would probably break your program down.”
Instant-win games can be fodder for abuse as well. “If you have a game where there is some equation that has to be followed, the computer hacker may be able to develop a program or hack his way into your computer to solve the equation and thereby disrupt your program,” warns Cohen.
To combat such misdeeds, promotion planners should explicitly limit the number of entries, and make sure the folks over in Web development have the firewall software necessary to keep hackers at bay.
On the financial side, there’s the standard risk of paying out huge prizes, because the Internet has helped raise the bar on reward levels.
In what is believed to be the richest prize ever offered – $1 billion – SCA Promotions worked last fall with a new contest site called Grab.com. Visitors went to the site, filled out a form, and picked seven numbers out of 77. Players had the option of choosing the numbers themselves or letting a computer do it. The seven winning numbers were chosen on December 28, with the winner – if there was one – scheduled to be paid in annual installments over 40 years. The price of admission for entrants, not surprisingly, was accepting a succession of follow-up communications.
SCA’s role was to guarantee the prize, which was insured with a policy underwritten by National Indemnity Company. “No one has ever dared to offer this large a prize before, but this is the type of innovative program we like to be involved in,” says Hamman.
A prize so extraordinary has a commensurately high risk quotient, which demanded a masterful sell by Hamman to the underwriter. One reassurance, claims Hamman, was that a proprietary security system was developed to thwart the cyber riff-raff almost certain to view such a massive payoff as rife with opportunity.
Despite the risks, Internet sweepstakes, game, and contest sites continue to proliferate. And traditional companies are utilizing the Net as a major component of their promotional strategies. The smart ones are being very careful.
“Things are happening so fast on the Internet that the risk of not thinking through a Web promotion from the very beginning is much higher,” says Shelly Rowan, partner at Cohen & Silverman’s Boulder, CO, office. “You don’t have a lead time of months, but of hours.”
That doesn’t leave a lot of time to connect the dots.
