When Santa didn’t deliver

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Let me take you back to last Christmas, December 2018, when the following radio ad was broadcast: “Dear Santa, I’ve been terribly good, so for Christmas I’d really like a £3 million, six-bedroom riverfront home on the edge of the New Forest, with an amazing kitchen, oh, and its own cinema. Obviously. Or I’d settle for an Aston Martin DB11. That’d be OK.

“With Win A Mega Home you could go into the draw to win this amazing house, with the runner-up winning an Aston Martin DB11. It’s £25 per ticket and you need to answer a question. Ticket sales close December 31st and all the details and Ts&Cs are on the website, so don’t wait for Santa, click winamegahome.co.uk today.”

Sounds amazing, doesn’t it, and presumably someone is now happily living it up in this fantastic house, while someone else is now swanking about in the Aston Martin. Well, as you won’t be taken aback to hear, actually no. Due to low ticket sales, neither of the prizes were awarded, but there was a winner – just the one, mind you, as no runners-up prize was present – who won a cash prize of £110,070.

According to the promotion’s terms and conditions, “In the event of less than the minimum number of entries [of] 170,000 being sold by the closing date, the prize shall be a cash prize equivalent to 75% of the amount received for entries into the competition net of promotion costs.”

Under the CAP Code, if cash prizes are offered instead of the advertised prize they should be more or less equivalent. Now £110,070 isn’t £3 million and 75% isn’t 100% (I’m not quite sure where the other 25% went), but I guess it doesn’t seem totally unreasonable to deduct some promotional expenses. In the event, though, the winner received a prize that was only 15% of the total amount generated by the competition.

Unsurprisingly there were complaints that the promotion had breached not just the CAP Code (some referred to a tweet and another radio ad), but the BCAP Code, which regulates broadcast advertising, as well. In fact, there were 18 complaints and, given that a single complaint is grounds for the ASA to investigate, that’s quite a lot. There were headlines in the tabloids and it even made the Guardian. People were angry and I don’t blame them.

There are a number of issues here and it’s quite detailed and complicated, so I won’t go into it in too much depth, but the ASA upheld the complaints, ruling that the ad was misleading, that the promotion had not been administered fairly and that it was likely to have caused participants unnecessary disappointment.

However, I have more to say on this case, because there are aspects of it which point to the fatal flaw in property raffles. Win A Mega Home’s marketing was actually pretty successful. In its response to the ASA it said the promotion received coverage on over 200 websites and 350 newspapers across the UK. The company reported it had seen exponential growth in ticket sales as a result of exposure on one national website alone and it expected that source to generate 100,000 sales.

In the lead up to Christmas and New Year 2018, shortly before the promotion’s closing date and with the objective of creating one final marketing boost, Win A Mega Home said that it sent national media outlets, including print, online and broadcast organisations, two items about the competition and it even invited broadcasters to visit the prize house.

None of this material was used, though, and no one took the opportunity to view the property. The marketing campaign fell short. Actual ticket sales raised just over £737,000, and by my calculations that means 29,480 tickets were actually sold, so the marketing campaign fell well short.

The ASA’s comment was, “We considered that any promoter that needed to generate sufficient revenue from the competition to fund the advertised prizes was likely to breach the [CAP] Code if they failed to sell the requisite number of tickets. Win A Mega Home had fallen significantly short of their sales target.”

The key phrase here is “to fund the advertised prizes.” I reckon it’s virtually impossible to sell enough tickets to fund the cost of a house people want to win and if the point of a promotion is to pay for the prize, rather than, say, promote a brand or reward loyal customers, then the model is problematic at the very least. This is by no means the first time I’ve written about the issues with property raffles and my suspicion is that it won’t be the last…

Sarah Burns is Prizeology’s Chief Prizeologist. 

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