Giveaways are a strange kind of promotion. The ultimate goal is to try and recruit potential readers to your side by enticing them with free stuff that they may not even get. Of course, the winners will be happy and may purchase your future stuff. But the people who lost may be bitter and want nothing to do with you. It's a risk, but one that can be mitigated depending on not only how the giveaway is structured but also what happens after it's over.
There are two major ways to approach giveaways. The first is to try and lure entrants with things that they already like. For instance, creating a bundle from a popular franchise that may align with your type of work. If you create stories about magic, maybe a Harry Potter gift set is a nice prize. If you write about werewolves, a nice werewolf bundle of items is a great treat. The problem with these kinds of giveaways is that although you may get a lot of entries, these aren't people that are necessarily interested in you. They just want the stuff. This can create a difficult task of trying to convert them to your side once it's all over.
The other approach, and the one I took for my most recent giveaway, is to try and give away your own items. Because you may not be as popular or as enticing as other properties, you will most likely get far less entrants. But by promoting yourself as part of the giveaway, those who enter are already familiar with you and will be more receptive to your pitches afterwards.
You may be surprised to learn how difficult it is to give stuff away for free. The human mind is weird. People don't often assign value to things that are free. So an immediate reaction is that if you're hosting a giveaway then the prizes might not be worthwhile. So you have to work extra hard in order to get eyeballs and attention.
Another problem is that you're trying to reach new readers, people that aren't already aware of you. So your typical network and social media reach is kind of moot. These are already people who are aware of you, so you need to find ways to get outside of the boundaries of what you can reach. Paid advertising helps with this, but it's another expense that may or may not pay off in the end depending on where your money is spent. It has to be a calculated move based on where that advertising is going and who they are trying to attract.
All in all, I felt my giveaway was a modest success. It's not that hard to calculate. You simply need to add up all of your expenses and divide by the number of new people you have reached. Then you can figure out your cost per lead and whether or not it measures up to past promotional efforts.
In the end, my main expense was the advertising. I used a free service to host the giveaway and drew prizes from books I already had in stock. Also, even if people didn't enter the giveaway, just being involved in the conversation and having a presence online helps build out a brand. It’s these kinds of incalculable benefits that also go a long way.
But the giveaway itself isn't the end of the story. As mentioned earlier, it's what happens afterwards that matters. Giveaways are typically run to add emails to your mailing list. But simply taking those emails and throwing them on the list may turn off people who still aren't familiar with you and just wanted to win free stuff. In which case, a welcome email along with a consolation prize is a way to soften the introduction.
Giveaways may not be the end all be all of marketing and promotion. They are simply another tool in the toolbox. The key is using the right tool for the right job and having realistic expectations about the outcome based on your choices.