Best Holiday PromotionsThere is little doubt that 2012 will see the biggest holiday season on record for online retail. With that, more and more marketers are planning digital rewards promotions for the coming rush.

Why? Digital rewards offer a compelling way to make offers stand out against the backdrop of extreme discounting. On top of that, campaign flexibility is unparalleled, and consumer response is enthusiastic.

Savvy marketers can run promotions offering customers a range of digital goods –- including iTunes, Amazon, Skype, Facebook, and so on — as incentives to purchase, to increase loyalty, for email and SMS sign-ups, referrals, and other valuable consumer actions.

As with other marketing tactics, a well-planned holiday campaign makes all the difference. If you’re ready to run a digital rewards campaign this holiday season – and skip the discount wars – ask yourself the following questions:

1. Where do I want to go?

Define your campaign objectives: Do you wish to improve customer acquisition? Increase average order size? Garner customer referrals? Rescue abandoned shopping carts? Once you’ve settled on objectives, dig into key performance indicators you wish to use to define success. Only then should you proceed with planning.

2. Is my digital promotion aligned with my brand?

Every ad, offer, and email is another touch-point in your relationship with customers, and a digital rewards promotion is no different. Each element of the campaign, from the creative ads to the choice in digital rewards, will be a part of your customer’s experience. As you choose what brand of reward to align with, select the promotion type (such as contest, gift with purchase, customer acquisition or user contributed content), and work out the themes, keep your own brand in mind. Make sure every piece of the promotion expresses your brand and advances the relationship with your customers.

3. What’s my traffic plan?

Just because you’ve built a strong rewards promotion doesn’t mean your target audience will show up on their own. That’s why it’s important to support campaigns with traffic flows such as paid media advertising and email campaigns.

Besides, since you’re running a digital rewards offer already, it would be a shame to miss out on the advertising performance opportunity. In our experience, ad campaigns that include a digital reward offer can generate up to two or three times higher clickthrough rates compared to ads with a cash discount offer of equivalent value. Pairing the right advertising approach with your reward promotion – for example running iAds with an iTunes gift with purchase promotion – can yield outstanding performance. From Sponsored Stories to search engine marketing and in-game advertising, there are exciting opportunities to fuel your digital goods promotion with targeted traffic flows.

Every promotional campaign is unique, however a rule of thumb that we see with the most successful promotional campaigns is to allocate 80% of the campaign budget to ads and 20% to the cost of digital rewards.

4. Is my promotion viral?

A benefit of marketing via social media is the virality made possible by enabling friends to share a great offer. Lucky for you, creating a rewards promotion that will generate viral traffic is a much more reliable process than attempting to create a viral video. Check that you have:

  • A compelling and desirable offer. There’s a digital reward perfect for every consumer, so choose well. Once you’ve zoomed in on the perfect digital goods and the right denomination of value to make a compelling offer, use creative and copy to make the offer irresistible. Don’t forget to use the brand assets for the rewards you’ve selected to maximize love-at-first-sight recognition.
  • Instant gratification to boost excitement. The best rewards to drive the viral channel are delivered digitally in an instant. One of the “secrets” behind the extremely high Share rate on campaigns we run is that the consumer gets their hands on the reward right away. They aren’t waiting weeks to receive a gift card in the mail; the magic happens immediately. 
  • Share buttons built into the success page. Make sharing via social networks easy and natural. If your customers and fans have to think about it or hunt for links, share rates will suffer.

5. How can we optimize?

Campaign launch is not the end of your process – it is simply another beginning. Even if your campaign is performing well, there is always room to optimize. Dig into your analytics, read and understand campaign reports, and leverage the consumer insights your promotion is delivering – such as redemption rates – to make things even better.

We all get excited about new marketing tools, and sometimes rush into a program. And the power of digital goods is often strong enough to make up for any weaknesses in campaign design. However as the holidays approach, we’d love for every marketer to carefully consider these five keys to making digital rewards work, and then experience their strongest holiday season ever.

Planning can take time. Let the process for designing successful holiday promotions with digital rewards begin now.