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In today’s day and age, it should come as no surprise that effective digital marketing initiatives deliver excellent value back to businesses. A strong online presence is an investment that can impact an organization in a variety of ways.

As a branding tool, few other mediums offer the flexibility and responsiveness of the web, which can be refreshed instantaneously to reflect new promotions and embrace user-generated contributions. The phrase “your brand consists of your customers” has never been truer.

Beyond brand equity, effective digital marketing translates to tangible business impacts in the form of sales growth. Social media and email integration allow companies to penetrate a customer’s online repertoire, and a well built website facilitates and encourages online purchases.

The web has also allowed companies to improve the customer service experience. The public nature of company updates and responses on social networks allows companies to show a responsive and caring attitude toward customer questions and qualms. This results in more resolved complaints and a cut in support costs, as online help desks free up bandwidth and expenses previously dedicated to telephone customer service.

A strong digital strategy also permits businesses to reallocate their marketing budgets to more efficient channels, resulting in more effective media buys. The metrics available to tie business performance back to specific digital initiatives result in a more transparent and true assessment of marketing impact.

Lastly, a web presence that inspires and gives people a place to express themselves can result in a breadth of consumer insights. This amounts to a truer form of market research, as opposed to traditional survey research, as analysis is based on organic user contributions.

See the chart above for stats collected by the Boston Consulting group, which recently surveyed marketing executives at over 30 corporations across Europe, Asia, Latin America and the US, researching the benefits of effective digital marketing across the areas of (1) Brand Equity (2) Sales (3) Customer Service (4) Media Buys and (5) Consumer insights.

Sources: Forrester Research, BCG Interviews, BCG Case Work, BCG Analysis

Promotion advertisers now have the ability to reach consumers based on their requested choice of page. Promotions and advertisements can now be served and targeted either by the profile of a consumer or the content requested from a site.

For example a company that manufacturer’s high quality golf balls can now target promotions to an individual searching for golf related products or tee times. These types of tactics are the polar opposite of traditional promotions which depended on mass media reach to connect with potential customers. Instead they focus on relevance and timing to consumers who are considering a purchase of a specific product.

The next few years will see a wave of digital natives and other tech-savvy folk leaving their office and home PCs and stepping out into a world swarming with internet-connected devices and context-specific information services LeSourd (2011). LeSourd coined this trend SoLoMo (Social, Location, Mobile) meaning the convergence of people, information, services, things, and places on modern mobile platforms. Futhermore he suggested that the effects of these changes would impact retailers on the high street, because high touch points rule brand loyalty

Shapiro (2011) defines the marketing world as two camps: the “one-to-many” camp representing the marketing model of the last 25 years (e.g. one brand markets to many people), and the “many-to-many” camp, where we reframe social media as a lead performer (but not the solo performer) in a bigger, newly emerging community-centered marketing system. Her construct gives an excellent contrast of traditional mass media versus social media.

For those of you unfamiliar with the term Lurkers, think of Lurkers as spectators who consume content but do not contribute. The skeptic may go as far as calling them digital parasites, while the visionary sees a new untapped market.

In Internet culture, a lurker is a person who reads discussions on a message board, newsgroup, chatroom, file sharing or other interactive system, but rarely or never participates actively. Research indicates that “lurkers make up over 90% of online groups”

In most online communities, 90% of users are lurkers who never contribute, 9% of users contribute a little, and 1% of users account for almost all the action.

While traditional marketing continues to emphasize branding and creative as the most important features of a campaign, digital promotions are evaluated almost entirely on performance results which are captured and measured digitally. Justifiably marketing budgets are rapidly migrating to new media channels, because traditional perceived success factors, such as emotional stimuli created by the warm and fuzzy feeling of a traditional campaign can no longer compete with actual facts and figures.

Edelman (2011) contends that up to 90% of spend goes to advertising and retail promotions. Yet the single most powerful impetus to buy is often someone else’s advocacy. For this reason numerous new models and performance measures have emerged in the sales promotion industry. A recent UGC video contest we built had 132 entrants and 636,774 video views, meaning 98% of the participants were viewers.

Reach is a vital element of any promotion, however traditional methods continue to produce diminishing returns. Therefore promotions need original engaging content, mainly produced from its own customers.

The digitization and networking of information has forever changed the way marketers and consumers connect. So be prepared to change or risk extinction

Facebook has decided to shut down Facebook Deals after only a four month trial.

“After testing Deals for four months, we’ve decided to end our Deals product in the coming weeks,” Facebook told Reuters.
The product, which launched in late April, was an attempt to bring the popular daily deals phenomenon to Facebook’s 750+ million users. It launched in San Francisco, Austin, Dallas, Atlanta and San Diego, but quickly rolled out to other cities.

The idea was for Deals to serve as an incentive for Facebook users to integrate the also now defunct Facebook Places (a poor copy of Foursquare) in their daily lives — and they were also an incentive for marketers and major brands to put more money into the Facebook platform.

However, the Facebook Deals were less like a Foursquare coupon awarded to the user after a checkin and more like a Groupon voucher, meaning the user had to buy a certificate for a certain good or service at a steep discount, typically half off its retail price, then redeem it later.

Examples of the new breed of Facebook Deals from brands include “unlimited bowling with six friends for an evening for $60 (75% off)” and “luxury winery tour and 25% off all wine purchases for $50.”

The market for daily deals has become more competitive in recent months, however, and many are questioning the entire business model in light of Groupon’s questionable financials.

It’s no secret that a brand’s success on Facebook is largely contingent on Facebook-only discounts and content, but Facebook’s Deals had been – in the words of Vinvius Vacanti, co-founder of Yipit.com – “an underwhelming product and experience”.

This does not necessarily mean that daily deals are ineffectual. Vacanti said it best: “I don’t believe this means daily deals are not a viable business. It more suggests that large media and tech companies can’t just ‘turn on’ daily deals and expect them to work. It has to be more thoughtfully integrated into their existing product”.

In other words, customization is still king. And, consumer engagement needs to be customized to the space, the way people interact within that space and the content and brands they care about. AdAge conducted a study about the deals space revealing that 52% of people feeling overwhelmed by the amount of emails they receive and 60% feel the deals market is just too crowded.

With this much competition, the quality of the deals can dwindle to the point of becoming SPAM instead of exclusive content customized to the consumer’s interest.

As Christopher Au tweeted, “Nobody needs more laser hair removal daily deals in their inbox anyway.”

Approximately 42.5 million people enter online sweepstakes every year and millions more participate in SMS and social media contests. In fact, contests and games are the most popular brand tactic used to grow followers and fans in the social media space. Twenty-four percent of the U.S. online audience play branded social games at least once a month with 68.7 million U.S. consumers expected to regularly play branded games of chance by 2012. (ComScore)
Contests, games, and sweepstakes are a key component of the social media marketing movement because they target specific demographic segments, cross diverse brand categories easily, and — most importantly — provide a measurable return on investment while creating meaningful engagement with consumers.

Here are the top five tips for success in online promotions.
#1 CLEAR OBJECTIVES
When developing an online promotion make sure your promotional objectives are clear. A promotion designed to generate trial of a new product, for instance, is not necessarily the right promotion for long-term loyalty, while a program to drive opt-in email registrations may require a different set of parameters. Baseline metrics should be established at the outset so that the right type of promotion is employed and performance can be quantified.

#2 ENGAGING EXPERIENCE THAT IS PRIZE APPROPRIATE
Online promotions should engage participants with immersive branded experiences that resonate and should be more than just a blatant prize pitch. While prizes are an important component of any online promotion, they should support the overarching brand objective while appealing to the target demographic and involving visitors. Whether it is user generated content, an interactive game mechanic, or even just the ability to select from among available prizes, always make visitors part of the experience when structuring your program.
You also want to make sure the prize fits both your target audience and your brand. You may want to consider multiple prizes and even discounts, giving participants the feeling they have a real chance of winning something. For instance, Woman Within – a leading online retailer- recently launched a “Tee Time” advergame on Facebook http://www.facebook.com/womanwithin?v=app_4949752878 that utilized an escalating discount feature. The higher your score, the greater your discount for Woman Within apparel. Simple, yet effective.

Don’t forget to make it fun! Don’t just put out a sweepstakes, give-a-way or contest. Consider your target audience. What do they like. How do they behave online? What would they be likely to participate in? This is true for the type of promotion as well as the prizes.

#3 TIMING AND BUZZ-BUILDING
Your contest or sweepstakes should have a clear beginning and end. The internet is the land of instant gratification so making the promotional event too long could have diminishing returns and lessen buzz around the promotion. On the other hand, you want to allow enough time to effectively promote the contest or sweepstakes and allow for others to share and respond.
Regarding buzz, you can make your interactive promotion viral by leveraging the power of the internet to exponentially grow the reach of your promotion. Tell-a-friend components, plug-ins such as Facebook Connect, integrated Twitter feeds, and more turn online promotions into natural lead generators.
Don’t forget to leverage the PR opportunities! Once winner affidavits of eligibility and liability releases secured, award prizes publicly and turn it into an event. This will not only continue the buzz around the promotion, but people want to know who won, what they won and why they won. Depending on the prize, you may be able to leverage the winner’s enthusiasm in social media sites by encouraging them to talk about their experience and win. This also reassures participants that prizes were awarded. Dairy Queen, for example, recently wrapped up a video contest in which six lucky winners won a MINI Cooper http://www.dairyqueen.com/us-en/mini/ . Instead of just giving the cars away, the vehicles will be awarded to the winners at local restaurants to engage local media and leverage the promotional “after-effect”.

# 4 KNOW THE TYPES OF PROMOTIONS AND SELECT WISELY
There are very subtle and very important differences between online “sweepstakes,” “games” and “contests.” Brands must ensure they choose the best option to fit their marketing goals, audience behaviors, desired engagement, and that their online promotion is structured to comply with the various laws surrounding games of chance.
Online Sweepstakes generally have two principal components: (1) a registration component and (2) a drawing element for prizes (daily, weekly, monthly or at the end of the program). Interactive elements can be incorporated into the Sweepstakes to create rich user experiences with branded elements but no skill is required by the entrant.
Online Games are generally a variation of a sweepstakes; however, they require a perceived element of skill to engage participants at a deeper level. Share-it features are often integrated to spread the reach of the promotion. They are sometimes referred to as “Instant Win Games”.
Online Contests are not generally games of chance. Unlike a Sweepstakes or a Game, they require entrants to exhibit a degree of skill (make a video, submit a photo, write an essay, etc.) that must be graded by a panel of judges using an established criteria set forth in the Official Rules. Contests typically require the deepest level of brand engagement.

#5 LEGAL, LIABILITY AND LOGISTICS/PLATFORMS
Pay close attention to the development to official rules, privacy policies, prize sourcing/fulfillment, consumer affairs, winner handling/notification, and more because there are a host of issues that must be carefully managed. There are also a number of legal considerations to consider so it’s best to engage a professional firm with proven experience in online games, contests, and sweepstakes to help you structure an online promotion that is in compliance with federal and state regulations.
In fact, on March 8, 2011, the FTC released its list of Top Consumer Complaints areas for 2010. The category of “Prizes, Sweepstakes, and Lotteries” had 64,085 complaints, accounting for five percent of all complaints the FTC received, most having to do with brands not following or understanding their outlined rules and regulations. Some areas to be mindful of include:
• Laws surrounding Games of Chance
• State requirements for bonding and registration of Games of Chance
• Judging criteria for contests
• Children’s Online Privacy Protection (COPPA) -for Under 13’s
• Intellectual property rights and patents
• Regulated industries
• International laws for programs that cross national borders

Brand promotions are increasingly consumed on-the-go, so you want to consider the most relevant platforms for your core audience. Designing and building promotional campaigns that are three-screen friendly and are ideally platform agnostic will deliver the widest audience. In terms of mobile, for example, programs should provide a full experience regardless of the underlying operating system to increase reach and drive conversions.

In summary, here are several key points about interactive and online promotions to keep in mind as you move forward:

• Online promotions are flexible. They can exist as stand alone programs or as bolt-on features to wider integrated campaigns.
• They accomplish a wide variety of marketing objectives.
• When compared to other marketing solutions, they are cost effective, can typically be launched at a fraction of other programs, and are natural lead generators.
• Make sure your promotional objectives are clear when considering an online promotion and that metrics for measuring the success of a program are considered prior to execution.
• Engage a promotion firm with proven experience developing online games, contests, and sweepstakes to ensure that all technical, logistical, and legal considerations are addressed.