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Ecommerce, Instagram, Marketing

Should You Run an Instagram Loop Giveaway? Here’s What You Need to Know

Have you noticed a spike in Instagram loop giveaways recently?

Instagram loop giveaways are contests that offer a big prize, but require you to follow an excessive amount of Instagram accounts in order to enter.

Once a growth hack used by brands and influencers to get thousands of followers overnight, Instagram loop giveaways have recently exploded into our Instagram feeds thanks to… the Kardashians!

Now, loop giveaways are on the rise with other big-name influencers, like Jake Paul and his Team 10 Youtube family, and brands like Architectural Digest, NastyGal, and PrettyLittleThing jumping in on the trend.

But do loop giveaways actually work as a long-term growth strategy to get more followers? And if so, how much do Instagram loop giveaways cost?

Keep reading to find out:

instagram loop giveaway

What is an Instagram Loop Giveaway?

An Instagram loop giveaway is essentially a giveaway that involves multiple accounts (usually brands or influencers) looking to reach new audiences and grow their following.

To enter a loop giveaway, users must follow all of the participating accounts.

The number of accounts involved can vary — but the higher the number of accounts, the stronger the incentive has to be for users to take part.

Generally, loop giveaways have people follow 40-70 accounts in order to enter (which is a LOT).

By pooling together in this way, participants can reach a much bigger audience and offer expensive prizes. This can include designer clothing or handbags, white goods, laptops, iPhones, and large sums of cash.

In the early days of Instagram, loop giveaways were seen as a black hat way to grow your following and boost your numbers.

But now, thanks to the social media prowess of Kris Jenner’s clan, Instagram loop giveaways are making a major comeback.

The Rise of Influencer and Celebrity Giveaways on Instagram

In May 2019, Kylie Jenner endorsed a giveaway for 9 luxury bags and $20,000 in an Instagram post (now deleted) — introducing a whole new wave of celebrity-fronted loop giveaway posts!

The requirements to enter included following every account that Scott Disick was following on Instagram, which was a total of 70 brand accounts.

The company behind this sponsored post, Curated Businesses, states that participating brands gained “230,000 new followers,” a “dramatic increase in web traffic,” and a “spike in online sales.”

Alongside the Jenner-Disick loop giveaway, Curated Businesses have also managed campaigns featuring Kourtney Kardashian, Kris Jenner, Khloe Kardashian, Nadia Bartlet & Rebecca Judd, and Emily Skye — and claim to have yielded big results for participating brands.

All of the celebrities and influencers involved in these Instagram loop giveaways have since deleted the posts or changed the associated Instagram caption.

View this post on Instagram

Busy day.

A post shared by Kourtney Kardashian (@kourtneykardash) on

But it’s not only the Kardashians cashing in on this trend: Jake Paul and his Youtube family Team 10 recently hosted an Instagram loop giveaway with prizes worth $100,000!

Kyle Richards of the Real Housewives of Beverly Hills recently jumped on the bandwagon too, running an Instagram loop giveaway with Big Crowd Media, which manages similar campaigns with other influencers. (Her original post has since been deleted).

How Much Do Instagram Loop Giveaways Cost?

There’s no industry standard when it comes to the cost of taking part in a pre-organized loop giveaway, but there are several factors that play into the amount third-party companies will charge.

This includes the campaign fee of the celebrities involved (Jenner is rumored to charge up to $1M for a single Instagram post), the number of brands participating, the cost of the giveaway prize, and the agency fee.

Popular Chips Dailies speculates that brands and influencers could have paid as much as $19,000 USD to participate in Jenner and Disick’s loop giveaway campaign, on the presumption that Curated Businesses took a 20% agency fee.

What’s interesting is that the Kardashian giveaways not only have the most followers, but they are actually one of the cheaper buy-ins for brands.

Instagram loop giveaway costs really are the wild west, and there doesn’t seem to be any baseline cost for participation.

While Kim and Kylie’s buy in may cost $15-20k, they have a whopping ~145 million followers each.

Compare that to Team10’s giveaway, which cost each brand a supposed $40,000 to participate. On the smaller scale, Kyle Richards’ was a rumored $1,800 buy in, with Richards having 2.7 million Instagram followers.

But it’s not just celebrities hosting Instagram loop giveaways, other businesses like Luxury Giveaways provide cheaper options aimed at brands and influencers who are just starting out.

For example, you can pay $223 USD for an expected 7,000 Instagram followers, at a cost of just $0.03 per follower.

But…should you?

 

Could an Instagram Loop Giveaway Harm Your Brand? 

The ultimate goal of Instagram loop giveaways is to attract genuine, engaged followers who will go on to become a customer of your brand.

But as with all “get rich quick” schemes, there are potential pitfalls.

For example, if you lose all of your new followers as soon as the giveaway ends, or they do not engage with your content, a giveaway can actually do more harm than good for your brand.

Full-time blogger Maria, of The Chic Pursuit, paid $500 to take part in a loop giveaway in 2017 alongside fellow fashion and beauty bloggers. The giveaway included a Macbook Pro, a pair of Louboutin shoes, and a cash prize.

Despite an initial engagement spike, Maria said that her engagement levels after the giveaway dropped significantly.

“During the giveaway, my engagement was the best it had ever been. However, as the giveaway ended, so did the engagement. And not only that, it dropped lower than what it had been before.”

“Before the loop giveaway, my engagement rate was at around 3%. Afterwards, it hovered around 1.8%. ” Maria said.

And the followers?

“At first, my account grew almost 10k in a matter of days — to 58k followers. Afterwards, the followers started dropping off slowly. 2 years later, my account is now at 45k.”

The rapid growth and loss of followers had another negative consequence for Maria, who often receives campaigns through influencer platforms.

“Influencer platforms have access to all your data, so when an account goes up by over 10k followers in one day, it’s instantly suspicious,” explains Maria.

“Perhaps worst of all, I was disqualified from a sponsorship platform due to the suspicious growth on my platform, and I lost out on hundreds of dollars in potential partnerships.

I wouldn’t advise anyone to take part in an Instagram loop giveaway if they’re serious about growing a viable Instagram account. Not only are they expensive, but they only bring short term success,” she said.

Is an Instagram Loop Giveaway Worth the Cost or Risk? 

Despite the apparent risks, some brands have seen positive results from Instagram loop giveaways.

These brands usually have effective targeting for the giveaway, and have carefully considered their content plan to support their involvement.

First, let’s break down the costs: if you paid $19,000 for the Kylie Jenner giveaway and received 230,000 of her followers, then your cost to acquire a new follower was ~$0.08 per follower.

This brings up an interesting thought — what is the lifetime value of an Instagram follower? For example, let’s say that on average, 10% of your followers will convert to making a purchase, with an LTV of $20 per customer.

If you acquire 200,000 new followers with a 10% conversion rate and LTV of $20, then you stand to make $380,000 in revenue ($400,000 – minus the initial $20,000 fee).

So in theory, these Instagram loop giveaways could be a good investment to make — if you’re acquiring the right customer.

So if you’re a travel brand participating in a loop giveaway with travel influencers and gaining a couple thousand followers, it might be targeted and niche enough to work for you.

But when you’re acquiring huge sums of followers from one of the most-followed people on Instagram, it’s likely that a lot of your new followers won’t fit the mould of your target customer.

There are some exceptions, though: NastyGal took part in a Kardashian-fronted loop giveaway right before dropping their NastyGal x Em Rata clothing line.

It’s easy to piece together that the type of person who follows Khloe Kardashian would likely also be interested in Emily Ratajkowski (23 million followers). So in this case, the loop giveaway actually makes a lot of sense.

Khloe Kardashian promoted an Instagram loop giveaway which ran from June 17-19th:

instagram loop giveaway

And one of the brands that participated in the giveaway hosted by Scott Disick was NastyGal:

On June 19th, the last day of the giveaway, NastyGal dropped their NastyGal x Em Rata clothing line.

The brand was strategically using the ~$10,000 fee as a way to promote the new line and acquire potential customers — instead of just trying to bolster their Instagram following.

When you think about Instagram loop giveaways as a form of paid acquisition for a specific campaign, instead of paying for Instagram followers, then the high price tag starts to make a lot more sense.

This targeting worked as followers of the Kardashians are likely to engage with content featuring Emily Ratajkowski — compounding the effect of the giveaway.

So what’s the verdict? While some accounts have seen success with Instagram loop giveaways, in most cases it’s much more effective to resist temptation and focus on growing your Instagram account organically.

Instagram users are smart, and they can easily notice when a brand has grown only from giveaways: a few hundred likes on a photo doesn’t match up to a brand with hundreds of thousands of followers.

Although an inflated following may look impressive, genuine engagement is a much more powerful metric when it comes to turning followers into lifelong customers.

And while everyone wants to attract more followers, it’s important that you are laser-focused on attracting the right followers: people who fit your target demographic and are likely to become real, paying customers one day.

Want to learn more about Instagram trends and what’s ahead for 2020? Subscribe to the Later newsletter:

 

Additional reporting for this article was provided by Natalie Martin and Taylor Loren.

Written By

Jillian Warren

Jillian is a content marketer at Later based in the UK. She is an aficionado of London brunch spots and an avid listener of true crime podcasts. You can connect with her on Instagram @jillwrren.