…and a happy New Year! See you in 2012.

We don’t have to tell you because you see them everywhere; social media contests are red. hot. and everyone seems to be doing them.

Some are doing them well, while others miss the mark. The ones that do them well have one thing in common; they’re clear on WHY they are doing a contest. So in case you are on the fence about having a comtest as part of your marketing mix, and you’re still looking for your reasons, here are 7 to choose from:

1. A social media contest gives you something to talk about

The preparation for, execution of, and follow-up after a social contest are all opportunities to engage with your community and grow it. Instead of watching your Facebok Page collect dust, host several campaigns a year; a schedule that you can deliver consistently and experience growth from.

For example, if you have even just four prize giveaway campaigns a year, that means 4 months of steady activity during the actual campaigns themselves, and the rest of the year to plan, promote and discuss those campaigns with your community. Each subsequent campaign builds on the success of the last, ensuring consistent growth in community size and activity. Yes, this means it is time to make contests a fixed line item in your marketing budget, and consider growing your investment each quarter and each year.

2. Social media contests can make you money

As we have said before, execute a complete plan with your social media campaign, and you can turn it into a profit center rather than an expense. Read our previous post on the topic for inspiration and ideas on how to do this.

3. Social media contests are great for mining data

When you do a contest right, your prize incentive will ensure that people are happy to exchange their contact info with you in exchange for a chance to win. Bu the best contest tools will let you ask for even more. What is it that you want to know about your community? Add some key survey questions (and ask for permission to stay in touch) at the point of entry, and you can extract some useful data from participants.

For example, ask “How did you hear about us?” to test the effectiveness of marketing channels. Or ask “When do you plan to buy your next tv?” if such a thing matters to your campaign goals.

CAUTION: Make sure your prize incentive in relative in value to what you are asking of participants. By this we mean: don’t ask for too much, in exchange for too little a prize. If you do, expect your results to suffer, as each additonal field on a contest represents more barriers to entry, and reduced participation. Have a juicy enough prize though, and you can ask for much more.

4. Social media contests can be a great source of content

This is a touchy subject, and one that has to be handled with a great deal of transparency and “legalese.” People want you to be clear about how you will use their content, their “art,” so you must be clear and fair, and protect yourself.*

But a properly executed photo or video contest can yield excellent content that, one could argue, you can’t “buy” elsewhere. To best illustrate this, we’ll give two examples:

Eg. 1. Popular beverage company “Beverage X” hosts a video contest that asks the question, “How do you like to enjoy Beverage X?” The resulting entries are a series of passionate testimonials about the popular beverage, prepared by their ideal target market, for their ideal target market.

Eg. 2. A cruise ship company that is accustomed to snapping party photos on their cruises adds a contest element to the mix: Enter your fun cruise photos in the cruise companies’ Facebook photo contest and share with your friends on Facebook, and you’ll be entered to wn your next cruise for free. Do you see what we’ve done there? By implementing a Facebook app and a simple “opt-in” process to a service they were already providing, they are getting happy cruise-goers to knowingly promote the fun of cruises to their Friends. I don’t need to tell you, this is better than any advertising that money can buy.

*Standard practice with UGC contests (user generated content) is to keep ownership of the content in the hands of the creator/entrant, but to grant a usage license to the contest administrator/brand, to protect their right to reuse it if they wish. This is the kind of thing you let us worry about for you, as our vendors and policies have already accounted for it.

5. Social media contests do the marketing for you

A truly successful contest campaign will have some sharing element; some way of incentivizing people to share with friends. The best way to so this is by adding a popular vote. The most enthusiastic entrants will rally their friends for votes, spreading the message of your campaign far and wide.

Bonus voting contest pro tip: Stick to a one-vote-per-person format. Asking people to vote more than once is asking too much, and makes you look greedy for traffic. Just don’t do it, seriously.  By keeping it to one vote per person, your overall traffic numbers might be lower in the end, but the metric that matters the most (new visitors) will be way up. The most competitive contestants will be forced to find new audiences for you in order to win. Also, this prevents a compounding effect (where the most popular entries compound their leads in a “one-vote-per-day” or “vote-as-often-as-you-like” format, because of their larger network)., keeping the  vote race closer and more exciting.

6. Social media contests are still newsworthy

Here’s your chance to test our creative abilities. The right contest theme for your company could generate not only community growth and cashflow, but also some excellent PR, if you’re the first at something. The space is stil new enough  that the early movers can take credit like champions in their respective trade publications and business articles.

Some examples: Why not be the first chain restaurant to host an internal competition to select your company’s social media ambassadors from among your existing staff?

Or what if you’re a portrait photographer, and you ask contestants to enter their best self portrait for a chance to win a portrait session with you? It is pretty easy to turn the attention on your community instead of you, and in the process, create a real shake-up in your industry.

One more, for fun: You’re a large corporation who makes charitable donations each year. You ask your community to nominate charities to receive your donations, and dole out your contributions to the most deserving charities as chosen by your community’s votes. This is the stuff headlines are made of, and how philanthropy awards are won.

7. Social media contests are fun

Some brands get too few opportunities to have fun. And it can be easy to use that as an excuse for not engaging with their community. But that’s precisely why they ought to give a contest a shot. Think about what your community likes and responds to, and build a campaign that will get them excited. What do they care about? What will get them to react and participate in contest? Even if you’re selling insurance, there is fun to be had if you’re willing to let your hair down a little. Ask us how!

Depending on your goals, the execution of your campaign can take many forms. We’re here to help you navigate through your options and build a campaign that will yield the results that are important to you. Drop us a line and we’ll tell more abut how we can help make contests a part of your marketing mix. For more inspiration, read “10 Ways to Make Your Social Media Contest Promotion Kick Ass.”

And as always, you can add your comments or questions in the handy Facebook comments form below.

If you want to take advantage of social media tools, and see some measurable returns on your investment of money and time, then you just need to plan.

A campaign that features some incentives (prize draw, coupon offer) is the fastest way to generate social media activity, and it really isn’t hard to make a social media contest a profit center.

@WildfireApp‘s Maya Grinberg recently wrote a post over at HuffPo about this very thing, giving five examples of customers that have used the Wildfire platform as a money-maker. I like the Duck Tape example, in #5: Use a sweepstakes to drive people to your coupon (it works in reverse, too).

Or, consider example #3, in which Zappos offered a chance to win a $500 gift certificate to anyone who filled out a “wish list” of what they would buy if they won. I don’t need to tell you- this stuff works. Some of those gift registries convert to real sales.

Still the best example of this that I have seen is Crate & Barrel who, working with their agency Phenomenon and using a customized contest site built on the Strutta platform, host the Ultimate Wedding Contest. To date, the multi-year promotion (photo, story and required gift registry of $2K of more) has yielded $10s of millions in Gift registrations. Even at conservative conversion estimates, their returns are in the millions. And all because they had a plan. (Kudos, Phenomenon)

Insert your insanely compelling offer here.

Ideas like these can work at any scale, and your options for execution are many. Just tap into what your community really wants, and what they’ll respond to. Earlier this year, the gang from Pinpoint Social ran a campaign with Putting Edge, an indoor mini golf company with 20 locations. They quickly doubled the size of their Facebook community, got a 50% redemption rate on their coupon offer and drove in an extra $15,000 in business in February; traditionally one of their slowest months.

Stop thinking about marketing as an expense, and start taking a look at what you can do to turn it into a revenue generator. If you struggle, drop us a line and we’ll be happy to give you a hand.