Sales Promotion
Updated 20 May 2026 · 13 min read
Campaign budget sign-off is stressful enough on its own. What makes it worse is the possibility of an unexpected invoice arriving six weeks after launch because a receipt upload mechanic attracted twice the forecast entries, or a prize draw performed far better than anyone expected. Both outcomes look like campaign wins, right up until the final bill arrives. The fixed fee promotion model exists specifically to close that gap. This guide covers how it works, what goes into the fee, when it is and is not the right choice, and what you need to prepare to get your budget approved the first time you present it to finance.
The simplest way to explain a fixed fee promotion is this: the brand pays one agreed amount to run the campaign, regardless of how many consumers take part. That fee covers technology, prizes, fulfillment, and campaign management. Once the contract is signed, the cost does not move.
Under a variable, per-redemption model, the brand pays based on actual participation. If the per-entry cost is a set figure and entries run at double the forecast, the total bill doubles. Budget certainty simply does not exist in that structure.
The core difference is where the financial risk sits. In a fixed fee model, the agency or promotions partner absorbs the redemption risk. They forecast participation using historical data from comparable campaigns, category benchmarks, and media reach projections, then set a fee covering expected costs plus a margin for the scenario where redemption runs above forecast. The brand signs off on one number, and that number holds.
This structure has been standard practice among FMCG, utility, and insurance brands in Ireland and the UK for many years, but more brand managers are now requesting it by name from the outset of a brief rather than discovering variability risk mid-campaign.
Understanding what the fee actually contains is where most promotion budgets run into difficulty.
Every promotional campaign, regardless of mechanic or sector, involves four categories of spend. Most budget surprises come from underestimating one of them.
Technology. The platform that runs the campaign: entry management, receipt scanning and validation for upload mechanics, fraud detection, data capture, and reporting. Technology cost is fixed regardless of redemption volume.
Prizes. The total cost of what is being awarded across every qualifying entry. Under a variable model, prize cost scales directly with redemption. Under a fixed fee model, the agency absorbs variance above the forecast.
Fulfillment. Getting prizes to winners: procurement, dispatch, delivery tracking, and returns handling. Digital rewards (gift cards, voucher codes) are predictable. Physical prizes are more variable. In Ireland, An Post delivery timelines and costs are a specific consideration for physical reward campaigns.
Management. Agency fees, legal T&C review, compliance checks, consumer query handling, winner verification, and post-campaign reporting. This varies considerably with campaign complexity and entry volume.
In a fixed fee model, the agency wraps all four into one number. In a per-redemption model, only prize and fulfillment costs vary. Technology and management remain fixed in both. The financial exposure gap is largest when the prize fund is highest, which is where locking costs down from the outset changes the nature of the campaign conversation.
Redemption rate is the variable brands most consistently underestimate. When a promotion overperforms, because media coverage was stronger than expected, a retailer gave it unexpected in-store visibility, or a social post drove broader awareness, participation can run well above projections. Under a per-redemption model, that good news converts directly into a budget overrun.
Under a fixed fee model, the agency absorbs those excess costs. The client pays the agreed fee and nothing more, regardless of how far redemption exceeds the original forecast. The agency has built a margin into the fee specifically to cover this scenario, drawing on experience across comparable campaigns.
This protection matters most when individual prize values are high. A promotion offering cash prizes or high-value experiential rewards carries a much larger financial liability per redemption than one offering discount vouchers or branded merchandise. The higher the prize value, the more dangerous a variable model becomes when a campaign lands well.
Brandfire's sales promotions team works across FMCG, utility, insurance, and telecoms in Ireland, and the brands that run into mid-campaign budget pressure most often are those with high-value prize pools on a per-redemption basis.
Fixed fee is not the universal answer, though. Some campaign types suit it better than others, which is the next question to work through before you decide.
Fixed fee is the right structure for many high-volume consumer promotions with uncertain redemption, but not all of them.
Receipt upload promotions. Fixed fee works well. Redemption depends on consumer behavior across multiple retail channels and is genuinely difficult to forecast.
On-pack unique code promotions. Fixed fee also works well. Redemption is hard to predict because it depends on shelf placement, consumer awareness, and how much effort the mechanic requires. Agencies with strong historical data on comparable campaigns can price these accurately.
Prize draws with free entry. Fixed fee is less efficient here. Because entry is free, volume can be high, but the prize liability is capped regardless of how many people enter. A platform and management fee is usually more appropriate.
Cashback promotions. Fixed fee is possible but requires more upfront data. Payout per customer is proportional to purchase value, so the agency needs detailed assumptions about average transaction size.
B2B trade incentive programs. Variable pricing is often more appropriate. Participation is smaller in volume, typically more predictable, and individual deal values are higher. The uncertainty protection that justifies fixed fee in consumer promotions is less relevant here.
Fixed fee makes the most commercial sense when a 2x redemption scenario would be genuinely uncomfortable for the campaign budget.
For campaigns where neither model fits neatly, there is a third option worth understanding.
Promotional risk insurance, also called prize indemnity insurance, is a separate mechanism from the fixed fee model, though the two are sometimes confused in the same conversation.
Prize indemnity insurance is taken out to cover the cost of a specific prize that is only awarded if a low-probability outcome occurs. A "match the jackpot number" promotion, a hole-in-one competition offering a car, or a direct mail campaign with a single embedded winning code are typical examples. The prize is high-value, the odds of paying it out are long, and insuring against the payout is more efficient than building the full prize value into a fixed fee.
Premiums are calculated on prize value, probability of a win, and the nature of the promotion. According to prize indemnity providers including Hole In One Insurance and Worldwide Special Risks, premiums typically range from 3% to 15% of the total prize value.
For most standard promotional campaigns in Ireland, the fixed fee model achieves budget protection more cleanly. Promotional risk insurance suits the edge cases: campaigns with large single prizes, low-probability mechanics, or prize structures that would be commercially difficult to wrap into a fixed fee. If your campaign has a headline prize contingent on an unlikely specific outcome, raise the prize indemnity question with your promotions partner before the brief is finalized.
The quality of any quote, fixed fee or otherwise, depends entirely on the quality of the brief behind it.
A fixed fee quote is only as accurate as the brief behind it. Agencies model redemption risk to set the fee, and incomplete information forces them to price for the worst case. These inputs make a material difference to what you receive.
Campaign mechanic. Receipt upload, on-pack code, prize draw, cashback, or collect-and-win each has a different redemption profile and cost structure. The mechanic is the most important input.
Prize structure. What is being awarded, what is the total prize fund, and how many prizes are on offer? Ten prizes of 500 euros and 500 prizes of 10 euros have very different cost structures despite sharing the same total prize fund.
Campaign duration. A four-week promotion has a different redemption profile to a 12-week one.
Media spend. How much you are investing to drive campaign awareness is one of the strongest predictors of entry volume. An agency pricing a campaign with significant media behind it will quote very differently to one where the campaign runs below-the-line only.
Geographic scope. Republic of Ireland only, all-island, or wider? Geography affects fulfillment costs and legal compliance requirements.
Historical redemption data. If you have run comparable campaigns before, share the data. It reduces the uncertainty the agency must price for, and typically reduces the fee itself.
The more complete the brief, the tighter the fee. A brief tight enough to get an accurate fixed fee quote is also tight enough to survive a finance review.
To make the cost difference concrete, consider this scenario. A 12-week receipt upload promotion runs across grocery, forecourt, and convenience channels in the Republic of Ireland. The total prize fund is 30,000 euros and the forecast entry volume is 15,000.
Under a per-redemption model, technology and management are fixed. Prize and fulfillment costs vary with entries. If participation runs at 30,000 (twice the forecast), prize and fulfillment spend doubles, and the total campaign cost lands well above the signed-off budget.
Under a fixed fee model, the agency forecasts participation, builds in an upside margin, and sets one fee covering all four cost components. If entries run at 30,000, the cost does not change. The brand has full budget certainty from contract signature.
The trade-off: if entries come in well below forecast, fixed fee costs more than per-redemption would have. The brand pays for certainty, not just for what it uses. For any campaign with a material prize fund, that certainty is almost always worth it, and easier to defend at sign-off.
Understanding that trade-off changes how you approach the approval conversation.
Finance and procurement teams ask consistent questions about promotional campaign budgets. Having these confirmed before you present for sign-off avoids multiple rounds of revision.
When these are confirmed before the meeting, the conversation is about campaign strategy rather than financial process.
Experienced teams regularly overlook cost items in the initial promotional budget. These are the ones that appear most often as unwelcome additions after sign-off.
Winner verification. For high-value prizes, verifying winner identity and eligibility takes time. If proof beyond the uploaded receipt is required, such as original packaging or account confirmation, this adds to management cost.
Unclaimed prize handling. When prizes go unclaimed before expiry, notifications, extensions, and redraws all need to be managed. This process is rarely included in the initial budget.
Data management and reporting. Data captured during a promotion must be stored, processed, and eventually deleted under GDPR. The Data Protection Commission's guidance on electronic direct marketing requires that consent records are maintained and deletion processes are in place. This is an operational cost that regularly fails to appear in initial promotional budgets.
Consumer queries. High-volume promotions generate queries. Whether your agency or your own team handles them, the resource needs to be in the budget.
VAT on prize value. Depending on how prizes are structured, VAT may be applicable. Confirm this with your finance team before the campaign launches, not after.
Building these into the budget from the start produces a number finance can trust, and a campaign that runs without mid-flight surprises.
The fixed fee promotion model solves one specific problem: the risk of not knowing what a campaign will actually cost until after it has run. By wrapping technology, prizes, fulfillment, and management into a single pre-agreed number, it gives brand managers and their finance teams the confidence to run ambitious campaigns without carrying open-ended financial liability.
The model rewards preparation. A tight brief, a clear prize structure, a defined media plan, and historical redemption data all produce a tighter fee and a faster approval.
If you are planning a promotional campaign in Ireland, the Brandfire team works with FMCG, utility, telecoms, and insurance brands to deliver campaigns where the budget agreed at the start is the budget you pay at the end.
Is fixed fee promotion pricing always more expensive than per-redemption?
Not always. If a campaign overperforms, fixed fee will be cheaper than per-redemption would have been. If it underperforms, per-redemption might have cost less. For most campaigns with a material prize fund, the budget certainty is worth the predictability premium.
What happens if I need to extend a fixed fee promotion mid-run?
Extensions are negotiated as an amendment to the original agreement. The agency re-models redemption for the extended period and quotes an additional fixed fee for that window. Agreeing the extension early produces a tighter quote, because more campaign data is available.
Do I need promotional risk insurance if I am using a fixed fee model?
In most cases, no. The fixed fee model already absorbs the redemption risk that prize indemnity insurance covers. Promotional risk insurance is more appropriate for low-probability, very high-value prize structures, such as a jackpot mechanic, where structuring a fixed fee would be commercially inefficient.
What legal requirements apply to prize promotions in Ireland?
Under the Gaming and Lotteries (Amendment) Act 2019, a promotional lottery linked to a product purchase offering total prizes up to 2,500 euros is exempt from permit requirements. Promotions with total prizes between 2,500 and 5,000 euros require a Garda Superintendent permit applied for at least 60 days before launch. Larger prize pools require a District Court licence. Compliant terms and conditions are required for all prize promotions, regardless of prize value.
When does fixed fee pricing make commercial sense over per-redemption?
Fixed fee makes the strongest case when the prize fund is large enough that a doubling of redemption would create serious budget pressure. The larger the individual prize value and the more uncertain the entry volume, the stronger the case. For smaller promotions with predictable, low-volume participation, per-redemption may cost less. The decision comes down to how much budget certainty is worth to the brand.
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