Cause & Effect
THEY DID MORE THAN RUIN their own names in the past two years. As greed and mismanagement sent the likes of Enron, Adelphia and other giants plummeting into bankruptcy, they also cast a shadow on all of corporate America, costing a huge loss in public trust. But with consumers still reeling from stockholder losses, businesses have laid the groundwork for a new movement embracing transparent accounting procedures and public practices that support their images as good corporate citizens. Cause marketing has moved high on their lists. The strategy, which shines a positive light on corporations when public scrutiny is high, is especially useful now. With the stock market in flux and revenues soft, companies have cut back on purely philanthropic giving. Cause marketing lets them support worthy causes while still pumping revenue to their bottom lines.
Corporations decreased their charitable giving in 2001 by 14.5 percent — a bigger percentage drop than donations from individuals or foundations, according to a survey by Giving USA; and two-thirds of companies surveyed by the Washington, DC-based Chronicle of Philanthropy said they planned to donate about the same or less in 2002 than they did in 2001. But cause-marketing budgets are up, says Kurt Aschermann, chief marketing officer of the Boys & Girls Clubs of America. “Corporations now realize that there is a way for them to spend philanthropic dollars that support a business plan.”
In fact, cause marketing has become so big that the Atlanta-based club last year created a Corporate Opportunities Group to work exclusively with partners’ brand managers. Aschermann’s 20-member team has secured a $6 million deal with Coca-Cola, among other big wins.
The trick, of course, is for corporations to make cause marketing genuine and to reassure increasingly skeptical consumers. The 2002 Cone Corporate Citizen Study: The Role of Cause Branding showed that 78 percent of Americans think that companies have a responsibility to support social issues (compared to 79% in October 2001 and 65% in March 2001). Recent corporate scandals only intensified this vibe. Eighty-nine percent of Americans say that because of these incidents, it is more important for companies to act socially responsible. “Cause-related marketing is just one element of corporate citizenship,” says Anne Leslie, senior account executive at Boston-based consulting firm Cone. “Companies can’t think that is all they need to do.” They should treat employees fairly; offer quality, reasonably priced products and services; and adhere to environmentally safe practices, she says.
Cone’s research also showed that consumers want to learn about cause-related marketing through a third-party source — not through bloated press releases or other self-serving literature. Fifty-one percent of Americans would like to hear about companies’ good deeds through a news article or editorial, compared to 16 percent from a corporate social responsibility report, according to Cone.
Packaging may be the best way to link a brand with a cause. General Mills ties its causes directly to its product with Boxtops for Education (consumers raise money for local schools by clipping the logo) and Save Lids to Save Lives (pink Yoplait yogurt seals generate 10 cents for the Susan G. Komen Breast Cancer Foundation). “The consumer is exposed to it constantly and there’s no need to put out a monthly press release,” says Joe Marconi, a marketing consultant in Western Springs, IL.
Gilded by association?
While most sponsorship and cause-marketing tie-ins do reflect positively on the corporate partner, the boom in cause marketing has created a backlash with some consumers. Studies show that public confidence in major charities faltered over the disbursement of more than $2 billion collected after Sept. 11. (Forty-two percent of Americans said they had less confidence in charities now than they did before the terrorist attacks, while 19 percent said they had more confidence, according to a poll by The Chronicle of Philanthropy and Harris Interactive.) A study from the Brookings Institution’s Center for Public Service showed that the number of Americans who said they had no confidence at all in charitable organizations doubled from eight percent in July 2001 to 17 percent in May 2002.
Consumers want to follow the money — whether it’s a for-profit or nonprofit organization. “People will look for transparency in every organization,” says Mark Feldman, VP at Cone.
If you listen to some advertisers, wearing a lipstick, eating a yogurt and driving a car can cure breast cancer. Others beg to differ. The grassroots advocacy group Breast Cancer Action launched a Think Before You Pink advertising and p.r. campaign in October (Breast Cancer Industry Month, they call it) asking whether buying products helps the goal of eradicating the disease. “There is increasing concern about [cause-related marketing],” says Barbara Brenner, executive director of San Francisco-based Breast Cancer Action (BCA). Some marketers agree. “We try to stay away from it (cause-related marketing),” says Chrystie Heimert, of Ben & Jerry’s. “We sometimes fall into that mode — it’s a lot easier, but it doesn’t feel like marketing, to lead with a cause.” Instead, the Burlington, VT-based ice cream company supports environmental and social justice causes through awareness campaigns on products, with no monetary exchange.
A small tie-in should be treated as such and not blown out of proportion. “A cause is a part of the bigger picture of a company’s brand,” Feldman says. Heimert concurs. “[Consumers] are skeptical when it feels like a one-off and that the cause isn’t near and dear [to the company].”
BCA takes issue with companies profiting from charitable affiliations and alleges they spend more money on advertising the efforts than they make in donations. “We say just make a gift, write a check and take out an ad saying you did it,” Brenner says. “Don’t tie it to product and exploit purchase decisions.” This fall, BCA bought a full-page ad in The New York Times calling attention to campaigns such as American Express’ Charge for a Cure, which gives one cent for every transaction made by cardholders in October to the Susan G. Komen Foundation. “The [AmEx] ads say in big, bold letters that every dollar counts, but if you read the fine print you realize that you’d have to use your card 100 times to generate a dollar,” Brenner says. “We’re asking people to think about these issues and to ask questions,” she continues.
The Komen Foundation distinguishes between corporate giving and cause marketing. “It’s not philanthropy,” says Cindy Schneible, VP-cause-related marketing and sponsorship at the Dallas-based foundation. “These are marketing and advertising programs. We’d much rather companies do this than create a sweepstakes.”
Discernment and discretion are needed, not the abolishment of marketing that can be a vital source of funding to worthy causes, say marketers. “All cause marketing is not good cause marketing and it’s important to have a dialogue about this,” Feldman says. “If the desire is to close down cause marketing, then that may not be the best outcome for society. But if it is to raise questions and help people think about how they can act on a social issue, then that’s different.”
“To do something is better than to do nothing and to take someone to task for that is not fair,” adds Marconi.
Taking a stand
Some companies have built an identity with a certain movement. For example, Avon’s Breast Cancer Crusade has raised $250 million for care and research over the past 10 years. While New York City-based Avon Products, Inc. bills itself as “the company for women,” the Crusade itself resonates with consumers. Avon was ranked No. 21 in a Brand Experience Scorecard by Wunderman, New York City, which polled 10,000 consumers on their experience with nearly 2,000 brands (December 2002 PROMO). Avon also came in at No. 10 in Business Ethics’ 2002 Corporate Citizen Study (climbing up from No. 64 two years ago).
“If your core customer is female, you better make sure that you have women on your management team and that they are not just secretaries,” says Susan Arnot Heaney, director of the Avon Breast Cancer Crusade. “Our Crusade is an inherent part of who we are.”
More corporations are striving toward long-term commitments and links with charities, as opposed to single cause-related events, says Debra E. Blum, a writer for the Chronicle of Philanthropy. Levi Strauss, for example, has embraced HIV/AIDS awareness for two decades through the Levi Strauss Foundation. “We were one of the first corporate foundations to address the issue in the workplace and in the community, when other corporations — let alone individuals — wouldn’t go near the disease,” says Kevin Carroll, senior manager of worldwide community affairs at the Levi Strauss Foundation.
Sticking with one or a few issues also makes sense economically, Carroll says. “We’re a global company so if we focus on a particular issue or cause, we can make a difference long-term, instead of over a one-month period.”
“The idea of doing well by doing good has really caught on,” says David Hessekiel, founder and president of Rye, NY-based Cause Marketing Forum, a new organization that serves as a resource for marketers. Skepticism may be part of American culture, but consumers have shown they want to do business with socially responsible corporations.
Star power
A little celebrity endorsement never hurt a charity — and it’s especially helpful for causes still lingering on the fringes of public acceptance, such as AIDS. Three-year old nonprofit YouthAIDS relies heavily on PSAs starring hip actors and musicians to relay its message. “Corporations are afraid to get involved with cause-related marketing associated with AIDS because it’s icky,” says Kate Roberts, director of YouthAIDS and cause-related marketing for parent company Population Services International. The Washington, DC-based organization this fall partnered with MTV Networks and the Levi Strauss Foundation for a Staying Alive World AIDS Day concert that included Alicia Keys, Dave Matthews Band, and Missy Elliot. Levi’s rounded out the program with an auction on eBay; fans bid for jackets signed by celebrities, with all proceeds going to YouthAIDS.
Meanwhile, pop singer Macy Gray appeared in a PSA promoting a Hello Kitty/YouthAIDS T-shirt that was sold at youthaids.org, along with other products from partners like Kiehl’s and Sketchers. Hello Kitty creator Sanrio and YouthAIDS want a retailer to sell the shirts, but according to Roberts, none are interested in selling the $15 T-shirt without a hefty profit for themselves. “They want to give just a $1 to us and that’s not acceptable,” Roberts says. “We make sure we understand a company’s objectives and that they’re not in it for a free promotion.”
