Do Sponsored Instagram Contests Really Work? A Case Study

Do you want more followers on Instagram? Wondering if a sponsored Instagram giveaway contest will work for you?

In this article, you'll find key insights from a case study to help you understand the pros and cons of sponsored giveaways on Instagram.

What Are Sponsored Instagram Giveaway Contests?

If you're interested in running an Instagram giveaway to attract new followers, you can either host it on your own account or through an influencer's account. The latter option is referred to as a sponsored giveaway and it's gaining in popularity.

With a sponsored giveaway, a sponsor or group of sponsors finance the contest prize and an influencer promotes the contest to their followers. To enter, contestants must follow all of the sponsors' accounts on Instagram so all of those accounts will see a significant increase in followers.

But the key questions are, “Will they be the right type of followers?” and “Will they stick around after the contest ends?”

To find out, I monitored six giveaways launched by two influential accounts (Curated Businesses and Lux Life Now). I observed the giveaway sponsors' accounts (which included a client) over the course of 1 year (2019–2020). I tracked the number of followers and the engagement rate at the beginning and end of the giveaway as well as 2 weeks and 4 weeks after the giveaway ended.

Sponsorship fees for giveaways organized by Curated Businesses range from $3,000–$10,000. They offer the potential to grow an Instagram account by an average of 45,000 new followers and reach a vast audience of potential clients for an estimated price of $0.06–$0.09 per person. Neither search engine ads nor social media ads can compete in this price range.

Key Findings About the Effectiveness of Sponsored Instagram Giveaway Contests

Let's look at Instagram sponsored giveaway contests from a marketing perspective and what opportunities they might provide. We'll also analyze the findings from the case study mentioned above.

Will You Attract Your Target Audience?

Instagram sponsored giveaways will attract new followers to your account, but they won't all be interested in your products or services. Rather, many of those followers will be attracted by the prospect of winning a prize. These followers are unlikely to be your target audience.

If you're a local business, selecting a giveaway host from your city or state won't allow you to narrow your reach to people who are living near your business location. A significant part of the audience you gain from a giveaway may be professional “bounty hunters”—social media users who constantly search for giveaway opportunities and migrate from one sponsor account to another in hopes of winning.

It's safe to say, the giveaway audience probably won't bring you a significant increase in sales.

Will Your New Followers Stick Around?

One of the key questions about an Instagram sponsored giveaway is whether your newly attained followers will stay with you after the giveaway is over. The chance to win a prize will attract an audience that's not genuinely interested in your content so the majority of your new followers most likely will unsubscribe on the day the giveaway results are announced.

In the case study, I observed 52 Instagram business accounts belonging to doctors, surgeons, and injectors to create a study sample of similar content. On average, 61% of giveaway participants unfollowed sponsors' accounts within 2 weeks of the giveaway result announcement. I estimate a 71% probability that more than 50% of new followers an account gains during a giveaway will abandon it within 2 weeks.

Using this post-giveaway unfollow rate, I adjusted the earlier price per follower estimate ($0.06-$0.09 per person) to an average price of $0.16–$0.23 per follower.

Does This Affect Organic Reach?

To understand what can go wrong with your account after an Instagram sponsored giveaway, you have to understand how the Instagram algorithm works.

The algorithm analyzes a user's preferences and activity to only show potentially interesting and engaging content (which they'll probably like, share, and comment on). To do this, it tracks the user's previous relationship with a particular account, as well as how followers generally interact with that account. If the user engages frequently with the account, it will be ranked higher in the feed. However, if the account has inactive followers or is experiencing significant unfollow spikes, the algorithm will interpret that as a signal of poor-quality content and rank it lower in the feed.

Because Instagram sponsored giveaways attract people who may not be your target audience and are often not genuinely interested in your content and offerings, your new followers might only interact with your posts during the giveaway, thinking it might increase their chances of winning the prize. Once the giveaway ends, though, they'll either unfollow your account or turn into so-called “ghost followers” who don't engage with your content and eventually stop seeing it in their feed.

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Instagram's algorithm will interpret this behavior as a decline in the quality of your content and begin to reduce the organic reach of your account by showing your content to fewer of your followers.

The image below charts the engagement rate of the accounts in the case study, starting before the giveaway and 2 weeks after it ended. It reveals that the giveaway allowed the accounts to increase their vanity metrics (like follower count), but as a consequence, their organic reach dropped and significantly reduced the probability of long-term success.

Instagram's video view metric (which represents a video view of at least 3 seconds) is the closest estimation of account reach I can observe without accessing insider account insights. For this analysis, I assumed video views as a measure of account reach and compared the average reach of accounts participating in giveaways to the industry average.

As you can see below, only 4 out of 33 observed accounts measured up to the industry average organic reach.

The bottom line is that Instagram sponsored giveaways will significantly impact the organic reach of your account, and with every giveaway, fewer of your followers will see your content in their feed. It's also possible that previously active followers will lose touch with your account.

Many giveaway sponsors will attempt to counteract this drop in reach by investing in Instagram ads. If they're unable to reach their target audience, they'll often move to the next giveaway, and in a sense, become giveaway-dependent. Of the accounts that I observed, 35% participated in two or more giveaways within the year, investing in followers who aren't genuinely interested in their business offerings, bringing their Instagram ranking lower and lower.

Tips to Retain New Followers From a Sponsored Instagram Giveaway

If you still want to run a sponsored Instagram giveaway after weighing the pros and cons, here are a few tips to improve your chances of retaining new followers.

Offer a gift that directly relates to your target audience. If you manage a spa, offer your services. If you're a fitness blogger, offer your most popular workout. Don't choose products or services from other businesses such as a Chanel bag or an iPhone. Those prizes are more likely to attract people who won't be interested in purchasing from you.

Repost top-performing Instagram content. Before the giveaway starts, repost 3–4 of your most successful Instagram posts so they'll be at the top of your feed when new followers join your account.

Post organic content during the contest. You might be tempted to flood your Instagram feed with business offers during the giveaway to catch the attention of your new followers before they unfollow you. This tactic won't make them stay. Instead, try to interest them in the knowledge you can share and establish a connection. If you succeed and they stay with you, you'll have plenty of time to sell to them down the line.

Proactively engage with your followers. Respond to any comments or questions in your posts and try to start a conversation. Also take advantage of interactive features in Instagram Stories such as polls and questions.

Introduce yourself to new followers. They followed you to enter the giveaway so they probably don't know anything about you. Use this opportunity to tell them about your business and what they should expect to see on your account.

Establish social proof. Show your new Instagram followers that other people enjoy your products or services. This might help convince them to stay with you after the giveaway ends.

Build on your momentum with a self-hosted giveaway. On the day the influencer announces your giveaway winners, launch a small giveaway on your own account to reduce the number of unfollows.

Conclusion

When choosing a host for an Instagram sponsored giveaway, make sure the influencer has active and engaged followers who are in your target audience. Verify their audience's age, location, and gender to be sure.

If your account is still small, don't overshoot and damage your account growth by participating in giveaways with celebrities and high-profile influencers. Instead, start with giveaways hosted by small- and medium-sized influencers, maintain stable engagement and reach during and after these giveaways, and then move on to larger influencers.

What do you think? Are you surprised by the results of this case study? Have you considered running an Instagram sponsored giveaway for your business? Share your thoughts in the comments.

More articles on Instagram marketing:

• Discover three tips to convert more Instagram traffic.
• Find four ways to reach a wider audience on Instagram.
• Learn how to use Instagram as an organic sales funnel.

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