Almost daily, friends and clients ask me, "Why are the likes on my IG posts going down?" And my answer continues to be: It's not you, it's them, and by them, I mean Instagram, NOT your followers. The truth is, only a fraction of your followers actually see your posts, and your engagement is probably higher than it was BEFORE the algorithm got steeper and steeper. This is increasingly becoming the case with your IG stories too.

More on the decline of organic reach here →

This problem has opened the door to Loop Giveaways. If you're wondering if Loop Giveaways work, in a nutshell, they are pretty thirsty, and the short answer is no. For bloggers, influencers, and small businesses, they are an attempt to grow your following and increase brand impressions. Sounds great and not thirsty, right?

A group of bloggers—usually between 5 and 35—post the same photo, sometimes at the same time, offering a giveaway to users. To enter, users must follow each account tagged in the giveaway until they're "looped" back to the original poster.

Image via Later

While this will increase your following in a short amount of time, after the giveaway ends, users tend to unfollow. Plus, you have to "buy-in" to be part of these giveaways, and the prices can be steep.

Much like my thoughts on influencers (above), ask yourself:

  • Why do I want these specific followers following my page?
  • What do these specific followers bring to my brand?

If the answer is only a # in your following and not conversions, then there isn't a reason you should be working on a Loop Giveaway as a sales strategy. It's all fluff, and no meat.

How to do a Giveaway on Instagram in 2021 that Works

From a birds-eye view, Loop Giveaways makes sense. Brands want to build relationships with the followers of their followers, but a closer look shows that the execution doesn't solve the problem brands are trying to solve. To properly strategize and figure out how to increase conversions/engagements on your social media marketing giveaways, it's important to look at two theoretical ideas:

  • What is the Tragedy of Commons, and how does it impact your participation?

  • How can you utilize the networks (of the social networks) of peers to apply pressure to increase conversions?

Note: Scroll to the bottom if you aren't interested in the background and want to dive directly into creating your giveaway.

The Tragedy of Commons

Tragedy of Commons is used most often in Environmental Marketing. To define it, here is an example involving pollution and solar panel use:

An individual chooses a level of action (e.g. consumption of electricity), which causes negative externalities (e.g. pollution). An external entity (e.g. municipal government) attempts to encourage the individual to reduce their action level through a direct reward scheme (e.g. subsidized solar panels). At the same time, the individual’s peers are able to exert negative pressure on the individual.

Now, think about this from an ecommerce perspective:

  • Define the issue that your product solves
  • Define the negative impact the issue has
  • Define the solution or giveaway

Note: If you're having trouble with the above bullet points, "Building a Story Brand" is a great book that will get you thinking more about your brand narrative.

The new scenario would be:

An individual chooses a level of action ([enter problem here]) which causes negative externalities ([enter negative impact here]). An external entity ([enter your business]) attempts to encourage the individual to reduce their action level through a direct reward scheme ([enter solution or giveaway]). At the same time, the individual’s peers are able to exert negative (or positive) pressure on the individual.

Tragedy of Commons Model + Peer Pressure Model in Ecommerce

  • The issue: The clothing a person owns doesn't give them the level of confidence they want.
  • The negative impact: The person is late for work after feeling "I have nothing to wear" or they lack confidence in their daily life.
  • The solution: A $500 clothing giveaway curated by a personal stylist.

An individual owns clothes that don't give him/her the proper level of confidence, which causes him/her to arrive late to work several times/week after staring at a closet, thinking, "I have nothing to wear." Our xy fashion brand is giving away a $500 credit and virtual personal styling session to help the user get where he/she wants: on time and with confidence.

How to Apply the Peer Pressure Models to Increase Engagement

Now that you have an idea of what you can provide, the next step is solutions.

A common solution to the Tragedy of Commons is the Pigouvian method. It is most often associated with taxing (e.g. an external entity taxes the noncompliant individual and uses the tax to offset the negative externalities).

However, new methods to combat the Tragedy of Commons introduce peer pressure, and in many instances, translate to higher engagement. In a recent study at MIT, researchers isolated three groups to understand how different types of peer pressure influence change:

  • The first group was self-monitoring: people who were rewarded based solely on their actions. This is most similar to the Pigouvian in that it focuses on the individual. It's a common giveaway structure.

  • The second group was peer-see: a group of three people where members are rewarded based on their own actions, but they can see the actions of their peers.

  • The third group was peer-reward: The reward was given based on the performance of the whole.

Pigouvian mechanism is user centric, meaning that you reward one user, isolated from peers. This is most similar to self-monitoring. Using a peer-pressure method, the highest converting group in the research was the peer-reward group.

The amplification increases with the strength of the relationships between the peers. For this reason, any Instagram giveaway strategy should target the user and his/her closest peer network to get the best results. Additionally, the cost of peer-pressure cannot be too low. Otherwise, the peer will not pressure. This is why presenting users with an issue and solution is more important than presenting a shiny new toy without context.

Click to read a case study using relationships in social media to increase app downloads →

How Does This Apply to Your Giveaway?

Here's what you've been waiting for, right? In order to create peer groups, you need to have people tag their friends. Let's follow the MIT model and go with 3 people. In this example, the brand is a database for online organizers, and the goal is to build a mailing list.

Note: In order to fill this out yourself, change the bolded items to fit your brand and make sure you properly define your giveaway goals.

  • Users on Instagram will be delivered an Ad on the platform. The prompt will ask the user to "tag three friends who love organization."
  • Once 3 friends sign up for the mailing list, the group will be entered to win the reward (all three friends—the peer-group—win).
  • If your friend tags 3 friends (i.e. measuring the performance of your peer group), you and your friend get double entries and a chance to win a free home organization that we will then feature on our social media with professional photography.
  • There is no limit on entries, so the more the peers keep it rolling, the better your chances are to win.

To increase your entries, the text needs to be very simple. In the peer pressure model research, the reward and entry need to be very simple or there isn't an incentive for people to use their peer pressure. You can also add influencers into this mix to increase social pressure.

One final note: Don't be afraid of using paid reach. It will give you a better ROI than a Loop Giveaway any day of the week.

Need help crafting an Instagram or Facebook giveaway? Shoot me an email or fill out the form below. I'm here to help!

Gabrielle Nickas