How not to be a horror story

If you believe that any publicity is good publicity, do not read further.But if headlines such as 'Hoover Battles Marketing Fiasco' and '[Anheuser-Busch] Rushes to Polish Bud Summer Games After Ticket Fiasco' are not the kind of publicity your organization wants...

If you believe that any publicity is good publicity, do not read further.

But if headlines such as ‘Hoover Battles Marketing Fiasco’ and ‘[Anheuser-Busch] Rushes to Polish Bud Summer Games After Ticket Fiasco’ are not the kind of publicity your organization wants – read on.

File of horrors

The above are only a couple of examples (happily, not Canadian) from my little file of horrors.

Promotions and contests, just like traditional advertising, have to comply with the ground rules: they should not contain misleading or untrue representations, performance claims must be backed up by sufficient proof, applicable laws and industry codes of conduct must be complied with, and care must be taken in trademark presentation.

Additional factors

However, promotions and contests involve additional factors. Assume you have successfully overcome the preliminary hurdles – the advertising is not misleading, your competitors are not about to sue, trademarks are searched and protected, and it is quite clear to consumers what they have to do to participate in your promotion or contest.

But what if there is some glitch?

In a promotion in South America, a computer error resulted in announcing a ‘winning’ number which, to the advertiser’s horror, was on 500,000 units of product.

This can happen not just to small, inexperienced marketers but to major, sophisticated corporations, and the litany of name brand companies who have suffered marketing fiascos is lengthy.

Hoover in the u.k. ran a promotion in which customers who bought Hoover products worth more than £100 qualified for two free flights to Europe or the u.s.

It has been reported that 200,000 consumers came forward for the tickets and that the parent company will take a $30-million charge against after-tax profit to pay for the mess.

In Canada, Popsicle Industries ran into a similar problem with its Nintendo game promotion. Among other things, it ended up with a $200,000 fine when it did not keep up with a higher-than-expected redemption rate.

In the u.s., Anheuser-Busch ran into trouble with its ‘Bud Summer Games.’

A printing mistake relating to second and third prizes occurred on sweepstakes cards inserted into roughly seven million magazines.

Given the number of magazines involved, and the value of the prizes (the second prize was worth $4,000), even a small percentage error represented a substantial potential payout.

While there are no easy answers, there are some general principles.

What is expected

An important point is for each of the parties involved in putting together the promotion to understand what is expected of them by the advertiser.

Is the advertiser relying on the fact that a similar promotion has been done elsewhere, and, therefore, not really considering the fundamentals in this market?

This can be dangerous, especially if subtle changes have been made to the promotion, or if laws or enforcement policies vary.

Is legal counsel given all of the promotional material to review or just some of it? What is their mandate? Are they to check compliance with specific identified laws or to comment more comprehensively?

Sufficient time?

Do the various participants have sufficient time to carry out their function and a sufficient understanding of the big picture? These are fundamental questions, but often not well defined.

Retaining promotional advisors and partners who are not only creative but also careful and knowledgeable in execution of promotions is important.

Insurance of various kinds can be useful and should be considered in complex promotions, especially if over-redemption is of concern.

Even then, however, care must be taken that the insurance coverage is as comprehensive as the advertiser wants; for example, printing errors may be excluded.

Granted, time is a scarce commodity, but time spent assessing the promotion at the start can be invaluable later on.

Elizabeth McNaughton is a partner in the Toronto office of Blake Cassels & Graydon, Barristers and Solicitors where she practises marketing law.