Three Ways Promotional Risk Coverage Can Improve Your Promotion

Promotional risk coverage can save your bacon and improve your promotional campaign. It allows you to offer people a chance at winning big ticket items, but doesn't mean you have to have a big ticket budget.

Here are three ways promotional risk coverage can help marketers offer huge prizes without having to flee the country if they ever paid out.

1. Because Someone Will Eventually Win
While the odds of being struck by lightning are only slightly better than winning the lottery (or worse, depending on your outlook on life), the odds of winning a small contest at a local event are much, much better.

For example, an annual golf fundraiser includes a new car if someone hits a hole-in-one on the 9th hole. While it may seem like a good idea to save money by not actually paying for the car first, keep in mind that the United States Golf Register says that the odds of a hole-in-one are anywhere from 1 in 20,000 to 1 in 33,000: much lower than the risk of being hit by lightning.

So what happens if a golfer hits that 1-in-33,000 shot? While every marketer loves the attention that the contest brings, none of them want to think about what will happen if someone makes the shot, and they did not have the car covered.

Promotional risk coverage will cover the possibility of someone hitting the winning shot. In this case, the risk is placed with an insurance company, and the marketer pays a small fixed fee. If a contestant wins the prize, the promotional risk coverage kicks in, and the insurance company covers the difference.

Rather than risking the cost of the car in a contest, for a fraction of the prize value, the promotional risk policy gives peace of mind to the organizers and prize providers.

2. Because You Need to Make a Big Splash
In cases where a campaign needs a high-value prize, but there is no room in the budget, promotional risk coverage makes it possible.

For example, in some fast food contests, the restaurant will offer several million dollars in prizes, but they are counting on the fact that not every prize will be redeemed, and the total prize value will not be reached. However, there is a careful balance between gambling that not all the prize money will be claimed, and having enough in the budget to cover it.

If a marketer wants to offer $500,000 in possible prizes, but believes that only $300,000 will be collected, a promotional risk policy could cover the difference if contestants actually collect on all the prizes. This allows the marketer to make a bigger splash with the contest, entice more customers to play, and still cover all costs should the unexpected occur.

3. Because You May Get More People to Enter
A similar promotional risk strategy is necessary for coupon programs, rebate offers, and even free music downloads.

For example, a marketer wants to launch a free music download program, and has budgeted for 50,000 redemptions of the song. However, the campaign is a wild success, and there are nearly 90,000 redemptions of the music. This means the marketer must come up with the licensing fees for the additional 40,000 songs.

Of course, if she had purchased promotional risk coverage, for a set fee, she could cover any possible overages, without incurring any anger and wrath from customers for canceling the promotion unexpectedly, or risk losing her job because she did not plan accordingly. In this case, promotional risk coverage removes the risk of a larger-than-expected redemption rate, and helps keep costs under control.

These three promotional risk strategies can help marketers keep marketing costs under control, allow for small campaigns to become big ones without risk of staggering losses, and even cover an unexpected success. For more information and to implement this type of campaign, it is important to speak to a promotional risk coverage specialist.

Digital Media Promotions Are Reaching Baby Boomers

Your digital media promotions efforts should not just be aimed at Generation Y. Sure, they outnumber the Baby Boomers right now, 81 million to 78 million, but that does not mean you should count them out.

In fact, Baby Boomers are not the technology Luddites everyone assumes them to be. Last year, Jeremiah Owyang and Forrester Research released a report that said 60% of Baby Boomers were using social media of some sort or another, and that number is only going up. In 2007, the younger Boomers (ages 43 - 52, as of 2009) were consuming social media at a rate of 46%, while older boomers (ages 53 - 63) were using it at a rate of 39%. But by 2008, those numbers had increased to 67% and 62%, respectively.

Whether it is Facebook and Twitter, watching videos on YouTube, or listening to their iPods, Boomers are some of digital media's biggest users. So a digital media promotions campaign needs to focus on the boomers.

Owyang said in his report that marketers need to focus their digital media promotions campaigns on sites like AARP Online and social networks like Classmates, Facebook, and LinkedIn. "The fact that boomers are increasingly using these tools is a clear indication that it is just not a fad," Owyang said in a February 2009 New York Times article.

The trick, said Owyang, is to engage boomers with a digital media promotions campaign that does not require a lot of effort. He said that Boomers are less likely to participate in contests that require them to write long submissions, or create and upload videos or photos. According to the Forrester report, Boomers prefer digital media promotions like taking polls, rating and voting on items, ranking favorites, or providing user feedback of services or news stories.

This means a Boomer-focused digital media promotions campaign needs to focus on the issues that interest them, not what "young people" think is cool. That does not mean avoiding a digital media promotions campaign that gives free digital music downloads, for example. But rather than tying it into creating special online content, tie it into something the Boomers already enjoy doing. Maybe they are traveling more, or they still work out and participate in sports, or they love music and go to concerts, or they are classic car enthusiasts and visit different shows and rallies.

Boomers are also joining social networks in droves, growing from 15% in 2007 to 25% in 2009. And recent figures from Facebook shows that women, ages 50 - 60, are their fastest growing demographic. This means that not only is Facebook a viable digital media promotions and advertising channel, but company-sponsored social networks are as well.

For example, a social network geared toward older travelers, athletes, or music lovers could be a great long-term strategy for digital media promotions. Consider sponsoring a travel-based social network and being visible while members are discussing different travel destinations and sharing memories.

Forrester and Owyang even recommend using digital media promotions to target Boomers with a social application: according to the report, the number of older Boomers responding to online content doubled from 2007 to 2008, 15% to 34%. For example, a music label could consider launching a mobile app that focuses on a specific music genre geared toward concert venues and bands. Then, users could follow the progress of their favorite bands, see where they are going to play, or check the schedule of their favorite nightclub or concert hall to see who is coming to town. Then share their findings with friends, chat online with other fans, and even arrange meetups at concerts.

Digital media promotions should not be limited to just Generation Y. As Owyang and Forrester Research have shown, the Baby Boomer market is a fertile playground for marketers looking to easily reach an engaged audience. A specially targeted digital media promotions campaign can be just as effective in targeting Gen Y's parents and grandparents.

Digital Media Promotions Cover Promotional Risk, Within a Powerful Promotional Platform

The powerful digital media promotions platform to rapidly launch your promotion, turns content into advertising. The leading digital promotions company that brings high-end promotional technology and programs to link brands with their consumer markets, Hip Digital Media acquired Promotional Currency. Headquartered in Dallas, Texas, Promotional Currency is a promotions and promotional risk coverage company that merges digital technology in the form of digital music, ringtones, skins and more with turnkey, fixed-cost solutions for the promotional marketplace. Additionally, Promotional Currency protects companies from over-redemption liability with its in-depth promotional risk coverage and underwriting capabilities, enabling large-scale programs that increase brand awareness and user experience. Visit www.promotionalcurrency.com to learn more.

Hip Digital Media holds MP3 licenses from all 4 major labels in the U.S., United Kingdom and Canada, Hip Digital enables innovative customer experiences with digital entertainment campaigns for Fortune 500 brands and online media companies. Additionally, Hip Digital protects companies from over-redemption liability with its in-depth promotional risk coverage and underwriting capabilities, enabling large-scale programs that increase brand awareness and user experience. Experience Hip Digital’s suite of services at HipDigitalMedia.com