Prize co-promotions – the importance of working together

A few months ago I wrote a blog post about some of the problems and pitfalls with online prize promotions. This post follows on from that and relates to another aspect of prize promotions; where two parties collaborate as co-promoters.

It happens quite a lot where, for example, a website publisher will run a co-promotion with a brand. Usually, no money changes hands between the two parties but both benefit (hopefully) from the exposure of the promotion.

The CAP Code doesn’t impose any specific obligations in respect of co-promotions. In fact it doesn’t refer to co-promoters at all. There is a brief reference to co-promotions buried in the general section on sales promotions in CAP’s AdviceOnline database which states the following:

“Some promotions, those in which more than one party benefits (for example, in terms of branding, promotion or revenue) are joint promotions or co-promotions. In joint promotions or co-promotions all parties are considered responsible and will be named by the ASA in the event of a complaint…”

Notwithstanding that both the co-promoters will be deemed responsible, contracts are rarely put in place to set out the terms on which the parties will collaborate. This is probably because, as no money changes hands, the activity can fly under the radar, or because it’s put together very quickly by execs with little or no chance for input from the legal team (assuming there is even a legal team).

However, without putting a contract in place, responsibilities can fall through the gaps and risks can be left unmanaged. A co-promotion agreement should divide up the obligations of the parties so it’s clear who’s doing what. For example, whilst both parties may agree to promote the prize draw/competition, usually only one party will be responsible for hosting the entry page and providing the T&Cs.

The agreement should also address which party is going to deal with entrants’ enquiries and complaints. If Party A is going to do this, then there should be an obligation on Party B to direct any enquiries/complaints it receives to Party A using the contact details in the promotion T&Cs.

One of the parties may want to retain control of how the promotion is publicised, in which case it should prohibit the other party from disclosing the name(s) of the winner(s) and ensure that the contract clarifies that all announcements and publicity associated with the promotion will be undertaken solely by it and not the other party.

So often prize promotions go wrong because of issues with the prize itself. The more detail the contract can contain about prize provision the better.

The party responsible for providing the prize should be under an obligation to use all reasonable care in its provision of the prize and ensure that the prize adheres to the description in the promotion’s T&Cs (which should be annexed to the agreement).

If the prize becomes unavailable for any reason, the prize provider should be under an obligation to promptly notify the winner and arrange an alternative prize of the same or higher value.

Where the prize involves participating in a physical activity, the prize provider should ensure that all necessary precautions have been taken to prevent injury, such as ensuring that any provider of the activity uses fully-trained and appropriately qualified professionals, has proper health and safety procedures in place, and provides all necessary safety equipment.

If Party A is providing the prize and Party B has particularly strong bargaining power then Party B could insist on an indemnity from Party A in respect of claims by the winner in relation to the prize.

The other thing that prize promotions have now become about is data. Who gets the data-set? What normally happens is that one party will manage the entry process and will be responsible for ensuring there are separate consent mechanisms in respect of marketing for it and the other party. It will then pass the opted-in data to the other party. This arrangement would be classed as a data sharing arrangement where both parties are acting as data controllers. Therefore, you wouldn’t expect to see the standard controller-processor clauses in the contract as you would with a standard service provision arrangement. However, both parties should still be under an obligation to comply with applicable data protection/privacy laws, regulations and codes of practice etc. The recipient of the opted-in data should request a warranty from the other party that the appropriate consents for marketing have been obtained, and the provider of the data should request a warranty from the recipient that it will only market to the data-set within the scope of the consents given.

Putting an agreement in place which covers, at the very least, the issues above should hopefully reduce the risk of anything going wrong with the promotion. The whole point of prize promotions is to generate goodwill / build reputation. If they are managed badly and lead to consumers complaining then that purpose will have been defeated.