Any promotion whereby the consumer is required to react in return for a reward i.e.
Promoters must ensure that there is not a cost associated with a winner claiming their prize, according to the recently implemented Consumer Protection from Unfair Trading Regulations.
Although this is primarily to combat premium rate scratchcard promotions, and other similar activity, it does mean that promoters should from the 26th May 2008 provide a freepost address for a winning promotional pack if it is required for validation, or a freephone number for telephone claims - or properly reimburse winning consumers.
According to the Unfair Commercial Practices Directive, which was integrated into UK law on the 26th May 2008, the word FREE should not be used for promotional purposes – however, the UK Department for Business Enterprise and Regulatory Reform's have objected to this.
Current European law forbids the use of the word FREE when a purchase is required to acquire or participate in the free offering.
Supermarkets may have to change to Two For The Price Of One offers(TFTPOO!?), which doesn't quite roll off the tongue like a BOGOF, and it will reduce the value of many other promotional mechanics when the challenge has always been to get the headline FREE on-pack.
Yes. Most mechanics can easily be replicated online or using SMS, and we have unrivalled experience dating back to the very first interactive promotions.
Our in house developers have the skills to produce online projects in their entirety, or work with your own specialists.
We also have excellent relations with SMS aggregators, programming automated response systems in house and hosting databases, ensuring Fixed Fee promotions meet stringent security measure required by insurers, at low costs – although we are happy to also work with your own preferred suppliers.
On 1st September 2007, most of the key areas in gambling law in Great Britain were replaced by a single, more comprehensive structure. On that date the Gambling Act 2005 repealed the Gaming Act 1968, the Lotteries and Amusements Act 1976 and the Betting, Gaming and Lotteries Act 1963.
The new Gambling Act defines and differentiates lotteries, betting (which can include certain prize competitions) and gaming (that is playing a game of chance for a prize). Skill competitions and free prize draws remain outside the Gambling Act – but it is important to structure such competitions and draws so that they do not inadvertently fall within the definition of a lottery, betting or gaming.
So, the change in legislation means that generally ‘no skill to win’ sales promotions (for example instant win and scratchcard mechanics) are now exempt from having to offer a no purchase necessary entry route to consumers, as long as the price of the product carrying the offer has not been increased to cover the costs of the promotion, that entry is free (whether this is to enter the competition, or to find out if you have won or to collect a prize), and that the promotion is on mainland UK (excludes Northern Ireland at this moment in time). Premium rate telephone and reverse billing SMS are considered paid entries, so no purchase necessary entry must still be offered on these promotions.
Paid for entries, for competitions where no product is purchased, and there is no skill, or the level of chance outweighs the skill required to win, then a no purchase necessary entry route must be available. If questions are too easy to deter a significant proportion of potential participants, or to eliminate a significant proportion of entrants, it will not satisfy the skill requirement, so unless a no purchase necessary entry route is available this could be deemed a lottery. It is a criminal offence to run a lottery unless either you have a lottery operating licence or the lottery is exempt from the licensing requirement because it is a private lottery.
We use a bespoke computer software solution to determine whether no purchase necessary entries are winners, giving the same probability as the consumer sending a premium SMS or similar paid for entry. This can be paper based, with entries posted to our PO Box, or web based, and we will advise on the best route depending on the mechanics of the promotion in general. The cost of this, and the additional prizes, is covered in our costs when we provide Fixed Fee or Opia pricing automatically.
In November 2007, the Gambling Commission made a further statement clarifying whether web entry can be regarded as a free entry route to a promotion, allowing it to be classified as a free draw and meeting no purchase necessary requirements.
They state that as long as potential applicants are given sufficient time, allowing for those who do not have home internet access, and that it is widely publicized, then it is acceptable.
You only pay for redemptions after they have taken place, so if the promotion has under redeemed your costs would have already been lower than your budget.
No, the maximum cost for the promotion is agreed before it starts, your budget is secure.
Before the promotion start date a contract is agreed between both parties, which clearly identifies everyone's responsibilities, including details of the cover we have acquired to protect the promotion in the event of over redemption. Only the management fee and physical stock cost is paid for in advance, and this remains the property of the promoter until the promotion close date. You pay for the handling and fulfilment costs during the promotional period, on a monthly basis, up to the maximum cost agreed before the promotion start date, where after Opia will take responsibility for the remainder up to 100% of the total possible applications. Your total budget is completely safe, and with no excessive advance payment you know your money is not supporting other promotions, so regardless of their outcome your project will not be affected.
We will work with our clients to develop a promotional mechanic that achieves their objectives, or simply calculate the response rate and costs to a concept that is presented to us. Opia can look at tailoring the mechanic so that the promotion fits the budget, and share experience of redemption rates. We have no minimum fee structure, so will always find a solution.
A majority of our work is with leading sales promotion agencies keen to protect their clients budgets, whilst still using innovative techniques to promote consumer interest in the product or service. We will work directly with brands who are not client's of the agencies we have a relationship with, offering full service agency facilities.
No. A promotion can even be run for no upfront costs whatsoever, with revenue generated from consumer applications, and this can be the only payment we receive – so you can run your promotion, managed by Opia, without paying us a penny!
An example being when entry is by SMS, and consumers pay 25p in addition to their normal network operator costs. If the volume of calls is large enough to generate enough income to cover the risk associated with redemption costs, then we would simply retain that to cover all our costs. Should the response exceed expectation, and revenue be higher, we can pay the difference back to our client.
If you have a question which is not answered here, please email us at info@opia.co.uk.