Instant Winner: Internet freebies are on the rise. What gives?

By Rachel Flynn and Corey Conley

Giveaways, real and fake, are proliferating across the web. Giant companies use them to entice customers to fill out web surveys, lesser known companies create contests to generate interest and awareness, and whole websites make money simply off aggregating these thousands of contests and freebies for an Internet audience that still holds fast to the belief something can be had for nothing.

With online sales spiking across the world (climbing by 15% last holiday season alone) the Internet is bustling with small businesses cropping up to catch that market share. With so many competing for the same consumers, sellers have to get a jump on their competition; they do this by spreading their names on websites and hosting giveaways, often of the product they are trying to sell.

Giveaways might seem like an easy way to lose money, but they actually help to gain a company exposure – a relative pittance worth of gift cards can generate awareness worth hundreds or thousands in conventional advertising. Small company owners have the chance to spread the word on social networking sites. Word gets out so much faster in today’s Internet savvy world, and giveaways make it easier for smart start-ups to make an impression (pun intended).

Big businesses also use this technique. With companies like Starbucks and Temperpedic spreading online giveaways, consumers have the chance to find deals within companies that they once thought too expensive. It is a bet that most companies are willing to make, and consumers aren’t complaining.

The giveaway trend among larger companies is even putting chances at discounts, freebies, and gift cards on their receipts, in exchange for filling out an online survey. Stores like Victoria’s Secret ask for surveys to be filled out in order to get a discount while Best Buy gives away money to random winners based on receipt numbers. Burger King gives away free Whoppers in exchange for a piece of your mind.

X prize logo giveaway Nvate

The 1996 X Prize and its 21st century imitators are perhaps the biggest example of the outsized influence of the almighty giveaway. Set up by entrepreneur Peter Diamandis and his X Prize Foundation, the $10 million dollar prize belonged to the first team to build and fly a three-passenger vehicle 100km into space twice within two weeks. Eventually claimed by Mojave Aerospace ventures the prize attracted $100 million in investment from 26 teams from around the world. Now companies, and even the U.S. Government, use similar prizes to improve everything from self-driving cars to better search results.

Of course, there are different reasons for each of these examples. Competition drives the X Prize and its ilk, while the discounts and freebies are simply a form of payment for market data; the small website giveaways are little more than cost-effective advertising. Still, there’s no question that, even in a world funded by easy-pay options, the siren song of the freebie has never been louder.

 

 

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