Going Global – a look at Spanish promotions

PromoVeritas and Marketing Week team up
12th December 2013

Sharon Birrane, Head of Operations at PromoVeritas examines the challenges in depth and advises on successful strategies of running promotions.

Spanish promotions: Increasingly brand owners are looking to generate efficiencies or leverage core brand properties by running cross border, or multi-country, consumer promotions. Unfortunately there is no standardised set of laws for the running of these types of promotions.

Even within Europe what is and isn’t permitted varies dramatically. Countries such as Sweden have a total prohibition on games of chance, i.e. prize draws whether linked to a purchase or not. Others such as Italy and Portugal allow games of chance but require all promotions to be authorised and insured, a process that takes time and can cost over £3,000. In France the use of the internet is considered to be a cost to enter and promoters must offer to refund people their internet usage costs upon request, while terms must be lodged with a legal official to prevent changes mid-promotion. In the United States of America the states are neither united nor harmonised in relation to promotions. What is legal in Colorado is banned in Rhode Island, and what can be run unconstrained in most states has to be authorised in Florida and New York.

Bearing all of this in mind, promoters should take great care when running international promotions. The strategy of running one promotion across all countries identically, i.e. sharing a prize fund and common rules, is frustratingly hard to achieve. However, often a core concept can be developed centrally and then run locally, allowing each country to adapt the concept to meet local legal needs. Alternatively, the promoter might choose to run a promotion across a cluster of countries that share a similar legal framework.

Language is another barrier stopping many brands running global promotions. As a rule of thumb, if you use more than one language you will probably require more than one set of terms and conditions, meaning an end to any hope of having a truly global promotion. While English may be the common language for business, most countries require terms and conditions or marketing materials to be written in the local language. There are some exceptions, such as in Scandinavia, where it is only recommended you use the local language and you can get away with English terms.

For those insistent on running a truly multi-country promotion with no regional variations that shares one prize fund, the only real option is to run the promotion in the Cloud, however the promoter must not conduct any communications IN countries with challenging legal frameworks. All marketing to those countries must be through the internet, and the promotion must ‘float’ over those countries rather than actively targeting their residents.

One country that will end your hopes of a global promotion if you run point of sale or a regular advertising campaign is Italy. Once you actively target Italian consumers then your promotion MUST comply with Italian law. This means, among other things, that all prizes offered must be awarded in Italy, killing any prospect of a multi country promotion with a shared prize fund. Fines for non-compliance are €80,000 making this an expensive law to ignore.

TOP TIPS FOR RUNNING OVERSEAS PROMOTIONS

  • Plan ahead – Due to the complexities of running promotions internationally, allow at least 8 weeks planning to ensure that you have time to manage all the language and legal issues relating to the promotion.
  • Exclude countries – Explore whether it makes sense to exclude certain countries from the promotion. Doing so can save both time and money as well as potentially enabling you, ironically, to run a promotion that is more international.
  • Budget for legal and other costs – Lawyers are expensive wherever they are based so don’t forget to budget for legal costs. In certain countries you will also need to budget for taxes and licences – e.g. for one client we gave away an Aston Martin. Because taxes on prizes in Holland are 20%, the client took out insurance that would pay the taxes if the winner happened to be from Holland. Just one less thing – and cost- for the client to worry about!
  • Consider clusters – Grouping countries with compatible legal frameworks might require you to split up your prize fund, but savings can be made by sharing costs such as administration and marketing production costs.
  • Use experts – Some countries are legal minefields. If you don’t feel confident that you know and understand the legislation then use experts like PromoVeritas. For example, did you know that in Italy any prizes not won have to be donated to a charity, while in Turkey you cannot give cash as a prize or two of the same item…
  • Be prepared to vary your mechanic – By tweaking your terms and conditions it may be possible to make your promotion international. For example, you can vary the entry mechanic by country. While prize draws are acceptable in most places, in Sweden you would need to introduce a skill based test. Fortunately it is possible to run a promotion with shared terms and conditions and prize fund using both mechanics.
  • Consider whether a local presence is necessary – Regulation in a number of countries only applies to physical marketing activity in that country e.g. experiential marketing, point of sale materials or advertising. This means that it may be possible to run a promotion via the Internet, though online adverts targeting users in that country may count as physical advertising.

Every set of terms needs a home, a place to anchor the activity in a legal sense, and the UK is ideally placed as a hub for running international marketing promotions. Not only do we have a very liberal approach to the regulation of sales promotions, we are able to liaise with the Americas, Asia, Europe and Africa in the same working day and we have a vibrant creative sector.

As a result the UK is widely regarded as a centre of creative excellence, pushing the promotional boundaries on all fronts from originality to data, from scale to measurements of success. While this freedom drives the sector’s success it is easy to forget that what works well in the UK may fall foul of the regulators elsewhere and we also need to be sensitive to social and cultural differences that may affect the success of a promotion to be run internationally.

At PromoVeritas, we pride ourselves both on our extensive knowledge of the legal regimes in most major countries and on our network of locally based promotional law specialists who can assist with the appropriate advice and gaining of permits etc. Below are some more recent and widespread campaigns that we have been working on:

  • Nissan: Country specific Pinterest promotions in 16 countries to support the launch of the new Micra
  • Microsoft: Xbox prize draw in 8 countries
  • Asus / Intel: Competition in 18 countries linked to Jason Mraz
  • American Express: Prize draw in Mexico
  • Hackett clothes: Cloud based promotion in 12 countries
  • MasterCard: Competition in 11 countries to win an European Championship VIP tickets and the change to be a mascot
  • HTC: Trade incentives which ran in 10 countries

To speak to Sharon or one of the team about your international or overseas promotion call 0203 301 7360 or email sharon@promoveritas.com

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