TylerCruz.com: An Internet Entrepreneur's JourneyThe journal of a web entrepreneur on his journey to wealth.

What’s with all the Crappy Prizes?

• What’s with all the Crappy Prizes?
• Sitepoint: 20 Months Later Thread
• New Feedburner Record

What’s with all the Crappy Prizes?

It is part of today’s culture that we are bombarded by a plethora of advertisements. Don’t worry, I won’t be talking about the abundance of advertising today. Instead, I’d like to discuss why advertisers, both large and small, more often that not give out sheer crap for prizes.

Let me continue by providing a few examples:

1. On the Discovery Channel’s popular television show Daily Planet, they hold an ongoing contest where viewers must answer various questions asked near the end of the show. Each time, the hosts explain how the contest works and show off the prizes. The prizes? The big, showcase prize is a Daily Planet backpack! Oh, and it’s stuffed with all sorts of goodies they say (my guess is a couple t-shirts and a hat)! If you’re not lucky enough to win that, you get a Daily Planet mug! Oh, snap!

2. On the radio station here, the CBC (Canadian Broadcasting Corporation) they have various talk shows and I enjoy them very much. Some of them give out prizes for contests, as you might expect. Listeners must call in, answering correct answers to various questions. If they get it right, they are entered into a draw! The prizes usually range from a CD, T-shirt, or book.

3. Take a random newspaper ad. It advertises it’s restaurant and holds a contest for whomever write the best short story revolved around their particular restaurant. It’s mega-palooza prize? A $50 gift certificate! Catch me, I’ve going to faint! I’ve fallen and I can’t get up!

Okay, so you get my point. You can probably understand perfectly well what I’m talking about. You are probably exposed to at least one such contest per day in fact. My question therefore is: What the hell?

Why are these people giving away such crap for prizes? I don’t understand. Have these companies done a lot of research in their thinktank bunkers and concluded that it’s more beneficial to spend nothing on prizes as not a lot more people enter their contest if their prize is greater?

Let me focus on the small local advertiser first.

The Small Local Advertiser

Okay, I can understand that the small local advertiser (SLA) may not have a massive advertising budget. But even so, if they are holding a contest, why bother holding one if they aren’t giving out anything worthy of entering? Most local contests I see, at least in the newspaper, usually give out prizes in the $10-$100 range.

Now, consider how much they spend on the advertising of that contest. This is pure guesswork on my part, but assuming that the SLA advertises solely in the newspaper, they’re probably spending anywhere from $1000-$2500 for their ad, depending on it’s location and size in the newspaper.

If they’re spending $2000 and only giving out $100 in cash, that means they’re giving out 5% in prize money compared to their budget, which revolves solutely around their contest in the first place!

Now, some people may argue that it’s not just the contest that they’re paying for, but also the branding and basic awareness of their company/product. Sure, I don’t discount that, but if you’re going to hold a contest, give something more meaningful. I can only see it as being beneficial.

For one, more people will enter and be more engaged with that company. Secondly, word will spread about the contest better. People are more likely to mention the contest to their friends if the company is giving away $1000 in prizes as opposed to $100.
Awarding more in prizes also builds a stronger image of the company. Which company would you think is more reputable or more trustworthy? A company who was giving away $5,000 in prize money or one who was giving away $200 in prize money?

The thing, too, is that it’s such a minor difference to the advertiser. Again, they’re already spending most of their money on the advertisement itself. Why not put more money into the prize as well and gain the benefit of word of mouth advertising as well?

The Big Advertisers

Deep pocket advertisers and companies who give out crappy prizes really confuse me. I can understand some cases which are fine, such as The Late Show with David Letterman, who has fun with the little audience games and gives out free dinners to local New York restaurants. While the prize there may be small in comparison to the popularity of the shot, it still works for me as it’s all part of the show anyhow and is mainly for laughs. And even so, a nice dinner at a nice New York restaurant is nothing to scoff at. It’s actually a pretty classy prize even though it may only be worth $150.

But what about my Daily Planet example? There are countless tv shows that do this. They’ll award a t-shirt, worth about $8, as a prize to a contest! Whaaaat? I just don’t understand. They could easily afford to give out $5,000 or $10,000… that’s nothing to them. But instead they give out a shirt. Is this because they believe the contest won’t bring in any new viewers, but are just awarding something cheap to existing viewers? Even if that was the case, why not be a bit more classy and give out something of at least value. Something worth at least $100 bucks…

The Conclusion

Unless I’m missing some complex angle that advertisers are doing, such as having worked out the cost-benefit scenarios of various priced and valued contests, or are doing it not as a promotional tool but more for connectiveness and community reasons, then I’m going to have to say that these companies are just cheap.

I also may be forgetting that there are a lot of prize-hungry contest people out there who love to receive anything for free. But even if that is the case, wouldn’t it therefore be more beneficial to the advertiser to give out better prizes to wet more people’s appetities?

Personally, I almost never enter contests. Not because I don’t think I’ll win, but because even if I did win, I wouldn’t even want the prize. I’d literally throw it in the garbage.

It’s a strange sight: here you have multi-billion dollar corporations and companies giving out t-shirts and backpacks as prizes, and then you have teenages and 20-somethings online giving out thousands of dollars in cold hard cash online.

Take my PublisherForums.com contest for example. I’m currently holding an $800 contest, and when that ends in a couple weeks, I’ll immediately be holding another one with $1000 in cash as prizes. And I’m not a multi-billion dollar company.

Hmm.. maybe that’s why I’m not a multi-billion dollar company. Maybe I’ll give away a TylerCruz t-shirt for my next contest instead…

Sitepoint: 20 Months Later Thread

A week ago I created a new thread on Sitepoint titled 20 Months Later. Here is an excerpt:

A little over a year and a half ago on May 9, 2005, I had created a thread announcing my situation of living at home with my parents and my decided departure to move out on my own and attempt to do this ‘web thing’ for a living.

Five months later I posted a follow-up thread as I had a number of people ask for an update. The resulting thread was titled “Five Months Later” and turned out to be even more popular than the first with 483 replies and over 32,000 views.

You can view the full thread here.

New Feedburner Record

Just a small little milestone here – the other day my RSS readership grew to 202 subscribers, taking me over the 200 mark for the first time:

The RSS readership number changes about once a day and can vary by around -/+ 20 or 30 but has stayed around the 170-180 range for quite a while. My goal is to beat my record and try to hit 300. Maybe one day I should take the time and actually submit my blog to blog places and communites…

That’s all for now…

Good luck and good earnings!