#Trouble: Beware When Running Social Media Contests and Sweepstakes

Social media is a great platform to spread the word about your amazing products, connect with consumers, bring beer lovers together to discuss favorite brews and—best of all—it’s free. Many new craft producers turn to social media (particularly, Facebook, Instagram and Twitter) to run contests and sweepstakes to help spread brand awareness and create a solid customer base. However, while social media costs nothing (in many cases) to use and take advantage of, running contests and sweepstakes without observing the rules of the platform and the rules of the government can end up being a costly endeavor, indeed. But, with the proper foresight and planning, a social media contest or sweeps can help take your brewery to the next level.

Here are five basic aspects of contests and sweepstakes that every company owner should know, if they are considering running one in the future:

#1: There’s a difference between a contest and a sweepstakes—the terms are not interchangeable. A contest requires some skill, so an entrant could be required to take an artistic photograph, write a creative answer to a prompt question, come up with a slogan, etc. But a sweepstakes doesn’t require skill—just some way to enter that tells the sweepstakes administrator who they are, that they’ve entered and how to contact them if they’ve won.

Easy enough, right? Well, state alcohol laws distinguish between the two and sometimes have different rules that apply to one or the other, so it’s important to figure out what sort of promotion you’re running before you do anything else.

#2: Each social media platform has its own rules and regulations. Facebook has certain requirements, as does Twitter, Instagram and Pinterest. Be sure to read each platform’s requirements as far as disclosures, actions you can ask of entrants (repost, retweet, hashtag, etc.) and other rules when you are crafting your competition to avoid any headaches later.

#3: Determine who’s eligible—as in, 21+ year old residents of what states? Did you know that each state’s alcohol beverage laws control whether or not the state gets to approve your contest or sweepstakes before you run it? This means that you need to seek prior approval from certain states before you open a contest or sweepstakes to its residents. Also, make sure that the rules state who can enter! If your contest isn’t valid in Wyoming, but everyone and their mother in Wyoming is entering and it doesn’t say so in the rules, that’s not a good thing.

A beverage alcohol attorney can advise you and assist you with obtaining prior approvals where necessary and help draft your official rules, but think about what your market is and which states you can live without—especially if you’re on a tight timeline.

#4: How much is your prize worth? Some states also will require that you register the prize with them, based on the total retail value of the prize. What if you’re going to give some branded swag, or a gift card or a dinner at a restaurant? Then the gifting laws could come into play. Again, an attorney can help you figure out what kinds of prizes you can and cannot award in order to avoid these pitfalls.

#5: To #Hashtag or Not to Hashtag? The FTC issued a warning last year (April 2014) to Cole Haan regarding a contest that the retail giant was running on Pinterest, where an entrant had to create a special board and use a special hashtag (#WanderingSole, in case you’re wondering) in order to enter. Hashtags are great for searching various platforms and have other useful qualities like trending and building awareness. But, the FTC took issue with Cole Haan’s contest hashtag because it did not indicate that the folks who were using it were doing so to enter a contest—it was too ambiguous, and didn’t establish a “material connection” between the entrant (the endorser) and the company running the contest (the marketer). The solution? The FTC warned that a hashtag, if used, would need to convey to the average audience that the person was using it because they were trying to enter a contest or promotion—creating that “material connection.” So, while #YourBeerIsOnFleek sounds like a cool hashtag (okay, maybe not), it maybe wouldn’t tell anyone that the person using it is trying to enter Creator of Your Beer’s contest.

There are other things to consider when running a social media contest or sweepstakes, but the above should get you started thinking about it and hopefully help put you on the right track to building more brand recognition, gaining new and repeat customers and getting your message out there.

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Jackie Sudano