What Are Loop Giveaways and How Can You Use Them to Gain Millions of Followers? Brands and influencers are embracing the power of loop giveaways. Here's how they work.

By Torrey Tayenaka

Opinions expressed by Entrepreneur contributors are their own.

Frazer Harrison | Getty Images

While platforms like Instagram and Facebook originally provided space for regular people to share details of their daily lives, it is no secret that these outlets have become finely-tuned marketing machines for brands. Plenty of influencers and products have risen to prominence due to tweets and posts going viral. The latest trend in social media marketing is the loop giveaway. But why has it become so popular?

A loop giveaway is a marketing strategy that tries to attract millions of followers. Here's how it works: a brand makes an irresistible offer, such as winning $10,000. To enter, people have to follow the host brand and its associates. In the end, one lucky winner gets to put that cash in their pocket — it's as simple as that.

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Are loop giveaways effective?

Absolutely. Brands and influencers are gaining millions of followers almost overnight. Loop giveaways continue to evolve, recently spicing things up by inviting big-name influencers as the "face" of the campaign.

Last summer, Kylie Jenner promoted a $20,000 giveaway including nine luxury bags. The campaign was a huge hit, essentially paving the way for the loop giveaway. Brands gained over 230,000 new followers from that one giveaway and saw a dramatic increase in traffic. Celebrities of all niches are joining the trend with YouTubers and rising TikTok stars jumping at the opportunity for exposure.

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There is no question that these loop giveaways are becoming mainstream amongst the A List Celebrities, with practically everyone jumping on board. In 2020 alone we have seen these cash giveaways from artists and celebrities like Bella Thorne, Dababy, Lil Pump, Lil Ui Vert, Lil Pump, Cardi B, Blueface, Trippie Redd, and so many more.

Offering big rewards for little effort

The reason why loop giveaways are so incredibly effective as a social media growth strategy is that they offer a big reward for almost no effort at all. The tradeoff, however, is that they aren't cheap for participants.

If an influencer or a brand wants to host a giveaway, they'd need to shell out some serious bucks. The upside though is that the cost is shared by all of the participants. If four businesses want to grow their audience by the thousands, they can simply pitch in a couple thousand each, hire a big-name celebrity like Kevin Hart, or Kim Kardashian to promote the giveaway and give the rest away to their new followers.

The loop giveaway has become a tried and true method in recent years, and the trend continues to grow. While users will unfollow some of the participants after the cash reward is announced, there tends to be a 75% retention rate of followers which is well worth the investment.

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An Instagram giveaway has five essential factors that determine what the expense would be for the hosting brand. Those include the number of new Instagram followers, the cost of the giveaway item, the user engagement rates for the host, the number of brands participating, and any additional bonuses.

The goal of the loop giveaway is to drive quality, genuine followers to the participating brands. The method has been established as credible, and the inclusion of celebrities has only made the case for the loop giveaway stronger.

Wavy Line
Torrey Tayenaka

CEO of Sparkhouse

Torrey Tayenaka founded his first production startup in high school. Today, he is CEO of Sparkhouse, focusing on high-concept, branded video production.

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