The advertising world has come a long way since the days of  Mad Men.  While some basic tactics may remain the same, the Donald Drapers of the 21st century barely resemble their 1960‘s counterparts. Technology exists today opening doors that even the best of Sterling Cooper wouldn’t have dreamed of.  As technology has become more commonplace and a central part of our lives, industry practices have shifted from TV jingles and magazine spots, to sophisticated advertisements aimed at certain demographics over numerous spectrums.

Last week the New York Times detailed yet another new strategy for marketing and advertising.^[1] A website called Loffles, a portmanteau of the words “lottery” and “raffles,” invites users to view advertisements of interest to them, and then correctly answer two questions for a chance to win prizes.  Requiring consumers to take the first step and actively seek out an advertisement is pretty radical compared to the strategies of the 1950’s, 1960’s, or even the 1990’s or early 2000’s.  Who chooses to watch a commercial? Unless its the Super Bowl, people generally go through the added effort to avoid pop-up internet ads or commercials that automatically begin playing when you initially open a website.  Not to view more.

Could this be a permanent, new form of advertising? Can advertisers put their ads online and attract people to watch them with the incentive of winning a prize? Why not? On its face, Loffles appears to have developed a strategy that targets advertisements at certain people with a real interest in that specific subject matter of the ad.  This of course, contracts with the very real possibility that a company’s advertisement gets lost in the fog of advertisements that consumers automatically tune out on a daily basis.

Loffles initially asks new users what they’re interested in or about certain values.  In doing so, Loffles matches up users with relevant advertisements and prizes.  Once registered, users watch a 20-30 second commercial and must answer two questions.  Typically the questions will focus on the slogan or important elements contained in the commercial.  Sometimes, they’ll be as simple as asking who sponsored the commercial.  If the user correctly answers the questions, he or she is awarded a certain number of loffles, thereby increasing their chances of winning the prize.

Despite the first portion of its name, Loffles is not (or rather, can not be) a lottery.  Loffles must then be a classic contest or sweepstakes.  A contest, especially one administered over the Internet, is a test of skill and a sweepstakes is a true drawing of chance.  Since lotteries, unless state or government sanctioned, are generally illegal, it is important to understand the difference.

In general, lotteries are comprised of three primary elements: chance, prize, and consideration.  Sweepstakes and contests typically lack one of the three elements, and most commonly the missing element is consideration.  There is a lot of debate over what actually constitutes consideration though, and typically consideration is manifested in the transfer of money or something of value.  Loffles does not require a payment of any type, but does require the consumer to create an account, log in, and correctly answer questions.  While courts have stretched the definition of consideration to include an analysis of the effort one must go through to enter, in general they have said that simple questions or forms do not constitute consideration, allowing sites like Loffles to be classified as legal sweepstakes or contests.

It is not immediately known whether similar sites will begin to pop up, or if Loffles itself will succeed.  Currently, Loffles does not charge advertisers to display ads on their site.  One would imagine though, that in order for Loffles to turn a profit, its future business model would necessarily include some form of revenue.  According to the Times article, only three companies themselves have seen a profit from advertising on Loffles.  In addition to the three profit generating companies, Loffles plays hosts to a number of not for profit organizations such as the American Cancer Society, Big Brothers Big Sisters, and the American Red Cross.

What makes Loffles truly amazing, and what surely would impress (or frighten?) anyone from the Mad Men era, is that it removes the initial hurdle of catching the consumer’s attention.  Rather than come up with an advertisement that draws someone in and makes them realize they need that product, Loffles creates a venue where people seek out advertisements in order to become eligible to win a prize.  In doing so consumers subject themselves voluntarily to numerous ads.

Sites like Loffles may hold a lot of promise for the future of advertising, though.  Realistically, Loffles-like sites will not dramatically alter the practice of advertising.  But, sites like Loffles, which allow consumers to win prizes for very little effort on their own, will probably continue to grow, especially during challenging economic times.  These sites provide advertisers with the unique ability to target very specific demographics and focus the consumer to products that are individually relevant to their lives.  As advertisers realize the value of placing ads on websites that allow large returns for a much smaller investment, websites like Loffles will undoubtedly flourish.  Technology has forced the evolution of marketing and advertising, and sites like Loffles may just be the next step and another vehicle bringing advertisements to consumers.