Editorial: Moving Forward

If the last year wasn’t enough of a wake-up call for sweepstakes marketers, these last few days certainly did it. American Family Enterprises filed for Chapter 11 bankruptcy protection for one, and, two, the U.S. House passed the Honesty in Sweepstakes Act. The bill is basically just waiting for President Clinton’s signature. Also, add in the fact that 19 of the 40 most recent cases brought before the Direct Marketing Association’s Ethical Business Practice committee involved sweepstakes promotions.

It’s clear that marketers have to change their tactics. It wasn’t enough for AFE to tout its American Family Promise, saying, among other things, that all entries have an equal chance of winning and that subscriptions can be canceled at any time. Funny, but the only concern among consumers at the dejanews.com sweepstakes discussion group was whether AFE still will pay out its prizes. The answer is yes, and, actually, the company is having even more million-dollar giveaways next year.

AFE announced that it wants to diversify into new and different distribution channels to sell magazines and merchandise – i.e., the Internet. It seems that the Reader’s Digest Association has already gotten the hint – the company said two months ago that it had reduced its reliance on sweeps promotions 75 percent this year. Not that sweepstakes promotions are a dead business, but maybe this is the opportunity AFE needs to make a clean break with its past and move ahead.

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