Saturday, 5 January 2013

Of Gambling and Reward

Watching TV these days has turned into boring and annoying affair. Every station is flooded with mind-numbing commercials which run after every 10 minutes of normal programming. The trick has changed such that split screening has been introduced in this respect.

That aside; some companies conspire with media houses to cash in from never ending promotions, promising that you stand a chance of winning a set out prize. What these companies don’t tell us is who the true beneficiary of these promotions is.

The scheme of rewarding the so called customers or viewers is questionable. Why require me to send an SMS at premium rates for me to win? Why put loads of conditions, the ultimate one being, “the more SMS you send the higher your chances of winning”?

Let’s do some simple arithmetic here to find out my chances of winning in any competition. The number of mobile subscribers in Kenya is said to be approximately 25 million. Assuming company X run a promotion for a month, then give away one million shillings daily and five million grand draw.

What if five hundred thousand out of the 25 million subscribers send SMSes daily, my chances of winning will be one out of 500,000. In another scenario, assuming Company X does not let a participant win more than once, the likelihood of me winning rises to 30 out of 500,000. The probabilities of winning also increases with a decrease in number of SMSes received and decreases with an increase in the number of SMSes received. 

At the end of the promotion, what will company X get? Let us compute the amount before paying for publicity, taxes and charges by mobile companies among others. Using the numerical above, Company X will make 5 million and 12.5 million shillings per day on promotions run on radio and TV respectively.

Allow me to put this into perspective. A former employee of a leading radio station in Kenya revealed that the station made at least two million shillings per day from a promotion it ran. However, the station gave away five thousand shillings in each of its five show segments per day and five hundred thousand in the grand draw. The SMS were charged at Ksh.15 per SMS and the promotion run for 30 days. That was three years ago. What of now?

In that case, before participating in any promotions, do the math. Have a mathematical year. 

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