What is a Contra Deal? How does it Apply to Prize Promotions?

What is a Contra Deal? How does it Apply to Prize Promotions?

Contra deals can be fantastic ways of not only multiplying the marketing pay-off your campaign is able to achieve, but may also be ways of securing prizes with no expenditure.  First, let’s establish exactly what a “contra deal” is.

What does “Contra Deal” mean?

A contra deal is an arrangement where two or more parties exchange goods or services with no money changing hands.

In a marketing context

These sorts of deals may take the form of joint ventures, where both parties volunteer goods or services on broadly equal terms and equal reward, or one party may “host” a campaign and solicit an arrangement with one or more parties for complimentary goods or services where the partners’ pay-off is more incidental.

How this relates to prizes

Promoters can procure prizes for their contest by offering PR exposure, opt-ins, or other marketing benefits in exchange for a prize(s) that the promoter can give away.  On the reverse side, brands looking to promote certain products, can offer them to promoters running competitions in expectation of the above benefits.

If both parties are actively “pushing” the campaign, the added benefit of a multiplier effect can be observed.

Things to consider:

  • There are no hard and fast rules, everything with a contra deal is negotiable;
  • Do set out all parties’ obligations and responsibilities explicitly and don’t leave anything to chance.  Disappointment that one or other of the parties is not “pulling their weight” is otherwise common;
  • Find complimentary partners to do this with.  It might feel like a partner shares the same market vertical and target audience, make sure they aren’t too close to you or you’ll be partnering with a competitor;
  • And chose partners that will not only improve results/make savings, but also improve your brand’s credibility or goodwill

Be careful not to pass off a campaign that looks like a contra deal when it is not

If you’re running a promotion and are suggesting that it is in “partnership with”, “association with”, or “sponsored by” another brand, and it is not, this can cause problems.  Brands will have guidelines on how you can use their likeness, terms, or products.  Some brands and types of product (tickets are an example) will have restrictions on their use for the purposes of giving away as a prize in competitions.  This is often for reasons of “brand integrity” or pre-existing commitments that they have with other partnerships (which may be exclusive).  Don’t fake a relationship you don’t have!