Pros And Cons Of A Giveaway Contest For Your Business

Consumers are suckers for freebies and social media contests. That is a well-known fact. Getting something for free, regardless of its value, triggers feelings of elation, satisfaction and pride in everyone. For this reason, a giveaway contest has been utilized as an effective marketing strategy to enhance online visibility, engage with target audiences and consequently, broaden your consumer base.

While this was an effective marketing ploy in the past, its effectiveness in attracting new customers is debatable during this digital age, and most especially during this pandemic.

To find out if a giveaway contest is still the way to go during these COVID-19 times, we will be discussing the pros and cons of this marketing strategy:


Promotion – Aside from giving customers that coveted feel-good moment, freebies and social media contests allow for person-to-person advertising at no expense to the company. It is also very easy to do. For instance, by making potential followers like and share a brand (or its product) as a requirement for entry, you create online following for it. 

Furthermore, capitalizing on the people’s nature to brag about or spread word about a ‘good tip’ or a freebie, businesses can actually make promoters out of their followers without incurring additional cost. This strategy is therefore used to generate web-business fans in social media platforms.

Market Research – From the research standpoint, online contests offer an opportunity for companies to ascertain the personal profiles of their target customers. If there are freebies/prizes, people are less likely to consider a business promotion as spurious and readily give personal information Gleaned from contact information given by people who sign in to participate in these activities, this data can be used for research purposes aimed at better promotion of products in the future.


Attracts freebie seekers – This is one downside of a giveaway contest. Freebie seekers ‘line up’ to get freebies without really having any intention of being actual customers. Unfortunately, freebie seekers usually constitute a sizeable portion of those who sign up.

Frequent promos tend to devalue your service/product – If online promotion is done frequently, prospective customers tend to lose interest and consider your promos (and products) as boring and ordinary. Worse, with all the promotional blitz, some people will be skeptical about the quality of your products and the legitimacy of your business.

Some will hold off purchasing ‘in case they win’ – This is another undesirable effect of frequent promotions. For chances (however slim) of getting a product for free, some people will delay purchasing it. Oftentimes they end up not buying the product at all.

Turn away true fans or loyal customers – Some potential buyers who really believe in your band can become alienated when barraged with constant adverts, promotional messages and emails.

So how do you it?

It all boils down to your motivation. Here are factors/suggestions to consider when running a giveaway contest for your business:

Create promotions for a good reason. It should be done to celebrate a milestone, introduce a new product or some other important reason.

Make sure your promotions reach a significant percentage of your target audience. When your engagement with your potential audience falls short of the target number, your promotional activities are not cost-effective and also a waste of time and effort.

Strive to promote brand equity. Your online engagements must be done in a way that product quality is underscored. Relying on gimmicks to lure a huge audience base may be counterproductive in the long term.

Aim for short term promotions. They have more impact. When promotional activities drag for a long time, they lose steam. Moreover, the audience becomes overwhelmed by the bombardment of messages and lose interest.

To recap, social media engagements like a giveaway contest must be carefully planned and executed judiciously. Only then can a business be assured of good quality and long-lasting engagement with its audience.

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