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Online Sweepstakes Pay Off for Stations

Nov 10, 2003  •  Post A Comment

As TV stations continue to mine the Internet as a potential outlet for nontraditional revenue, a number of local broadcasters are looking to online contests to bring in extra change.
In an economic climate that’s putting budget squeezes on TV stations, every incoming penny counts. Some stations have earned as much as $150,000 a year through sponsorships of sweepstakes on their Web sites, said Ed Estes, president and CEO of DigitalBang, which designs and manages online contests.
DigitalBang currently offers 20 different contests to about 27 TV stations to generate nontraditional revenue, Mr. Estes said. The contests include “Football Frenzy” for college and professional football, “Who Will Survive Weekly Reality Show?” and in March and April during the NCAA college basketball tournament, “Hoops Frenzy.”
DigitalBang manages and runs the contests, and the TV stations sell sponsorships for them. The station doesn’t buy a contest until it has sold a sponsorship for it, eliminating risk on the station’s part, Mr. Estes said.
Raycom Media-owned Fox station WXIX-TV in Cincinnati offers eight to 10 contests each year through DigitalBang and brings in between $75,000 to $100,000 yearly in additional ad revenue from them, News Director Pat Casey said,
“I see it as found money. In this day and age TV stations have to think outside the box and create new mousetraps, and it’s one of a host of things that wasn’t available years ago,” he said.
Contest sponsors have included a sports bar, supermarket chains, pizza places and consumer electronics stores.
WXIX has worked with DigitalBang for more than three years, and its “Hoops Frenzy” contest alone generates $20,000 to $25,000 annually in sponsorship dollars while attracting as many as 10,000 users online to the contest, Mr. Casey said.
Gray Television-owned CBS affiliate WKYT-TV in Lexington, Ky., said it generates about $5,000 a month in ad sales from its contests. The station began working with DigitalBang during March Madness last year and attracted nearly 6,000 users for the contest. The sponsor, a local satellite dealer, gave away a television set. WKYT pays $600 a month in license fees to DigitalBang.
“We can promote our Web site, and it’s a way to get additional exposure for people already advertising on our Web site,” said the station’s multimedia manager, Tim Coles. A contest gives a viewer a reason to visit the Web site, Mr. Coles said. WKYT is currently running “Football Frenzy,” which allows users to pick game winners during the NFL season. Each week’s winner receives a 6-foot submarine sandwich from Subway, and the season winner takes home a 42-inch TV.
“From a TV standpoint, I like keeping our viewers involved with our Web site. It keeps them coming back,” he said. “It’s good for the station in that sense. It does generate some revenue and it’s a way to keep connected with our viewers.”
The WKYT Web site attracts about 90,000 unique visitors and generates about 800,000 page views each month.
According to a 2003 Jupiter Research report, contests and sweepstakes are the sixth most popular online activity, with 52 percent of online adults regularly participating. That comes after e-mail, search engines, product research, local information and daily news.