Transcript Causemarketing

Cause Marketing
What’s in a non-profit’s name?
What is “cause marketing”?
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Licensing agreement between commercial
product marketer and leading nonprofit
organization
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“Passion branding”
“Social issues marketing”
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Nonprofit assigns right to use name and logo
in promotion of commercial products
Sponsor pays substantial sums of money for
use of nonprofit’s name and logo in
advertising
The rise of cause marketing
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relatively recent phenomenon
earliest use (1983) involved promotion by
American Express
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for each purchase made with card one penny
contributed to renovation of Statue of Liberty
raised $1.7 million
generated 28% increase in card usage
More recent examples
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Visa committed to donate, based on card
usage, at least $1 million to children’s literacy
organization
Johnson & Johnson contributed portion of
sales from children’s toiletries to World
Wildlife Fund
MCI donated portion of business billings to
Nature Conservancy and Audubon Society
Is it a significant form of marketing?
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fastest growing segment of advertising in ‘90s
estimated expenditures of $1 billion on cause
related marketing campaigns in 1993
estimated expenditures on sponsorship
activities would be $6.8 billion in 1998
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1994--$340 million paid to various charitable
organizations in North America
1996--$485 million
2002--$835 million
second largest sponsorship category
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exceeds spending on tours, arts, festivals, fairs
dwarfed by $7.21 billion advertisers spent on
sports sponsorships
What are the benefits to nonprofits?
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Further the organization’s mission
Leverage the marketing budgets of
corporations by obtaining access to mass
media resources it could not otherwise afford
Increase public awareness
Gain an increasingly significant source of
revenue
What are the benefits to the commercial
sponsors?
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Generate increased sales
Enhance image as good corporate citizen
Develop long term customer relations
Build brand loyalty
Differentiate themselves and their products
from other sellers and products in competitive
marketplace
Most prevalent form of cause marketing
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Nonprofits--often health charities--entering
licensing agreements with commercial
sponsors--often pharmaceutical companies
nonprofit sells use of its name and logo for
use in national advertising campaigns
promoting the corporation’s commercial
products--often prescription or OTC drugs
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Consumers bombarded with advertisements
touting various products--particularly health
products--in which large, familiar and trusted
nonprofits’ names and logos are prominently
featured
Examples
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prescription cholesterol drug Pravachol prominently
displays name and logo of American Heart
Association
logo of American Cancer Society prominently
featured in advertisements promoting Florida orange
juice--in return for $1 million a year,
American Cancer Society sold exclusive rights to
use name and logo in promoting NicoDerm CQ and
Nicorette--in return for annual payments of $1 million
American Lung Association sold Johnson & Johnson
its name to promote Nicotrol--in return for $2.5
million annually
What’s wrong with these practices?
a. Consumers place a high level of trust in
nonprofit organizations…
1995 survey of 1,011 adults conducted for the
American Cancer Society (ACS):
 96% recognized the ACS
 ACS received highest ratings for overall
reputation and as organization people can
turn to for accurate information about cancer
1997 National Health Council study:
 Organizations such as American Cancer
Society and American Diabetes Association
found to be “somewhat” or “completely
believable” by 93% of consumers surveyed
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same percentage as doctors
slightly higher than nurses and pharmacists
…but do not place the same level of trust
in advertisements
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same report found 31% of consumers felt
advertisements for medications were either
“not too” or “not at all believable”
b. Consumers prefer products marketed in
association with a nonprofit corporation
1997 Cone/Roper survey
 when price and quality are equal among
competing brands, 76% of consumers would
be likely to switch from current product brand
to one associated with good cause
1991 study published in Journal of Consumer
Marketing
 45.6% of consumers were “somewhat likely”
or “very likely” to switch brands to support
manufacturer that donates to charitable
causes
1994 focus study commissioned by American Cancer
Society
 74% of consumers would be more likely to buy
consumer products or services associated with
charity such as ACS
 70.5% stated that ACS message and name would
increase loyalty to their most preferred cereal
 40.1% would switch to second most preferred cereal
brand if ACS logo and message printed on package
c. Consumers believe that products
marketed in association with nonprofit are
endorsed by nonprofit
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Focus groups and interviews with consumers reveal
that
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“consumers trust the ACS and feel that products which
carry the ACS logo would have been tested by the ACS”
Study designed to determine public reaction to
ACS’s involvement with commercial sponsors
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57% of respondents felt there was an implied endorsement
of products using ACS name
Survey commissioned by the American Heart
Association (AHA)
 60% would change brands in order to buy
product “approved” by AHA, assuming price
the same
 61% assumed organization giving approval
guarantees quality of product
 88% believed product had been tested by
organization
d. Consumers believe products marketed
in association with nonprofits are superior
to competing products
1994 study commissioned by the American Cancer
Society
 44.5% agreed or agreed strongly with the statement
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“I believe this brand of cereal promoted with the ACS is
more healthy for me and/or my family than any other
cereal”
60.4% agreed or agreed strongly with the statement
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“I believe eating this cereal will reduce my/my family’s risk
for cancer”
Study related to aspirin products,
 44% indicated belief that brand of aspirin
promoted with ACS would reduce risk of
cancer more than another aspirin
Study related to pork & beans
 40.6% agreed or totally agreed with
statement
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“I believe this brand of pork & beans, promoted
with the ACS, is more healthy for me and/or my
family than any other brand of pork & beans”
e. Consumers do not expect marketing
relationships between commercial entities
and nonprofits to be exclusive
Survey to test how people feel about the ACS
exclusive partnership with two smoking
cessation aids
 8% were aware relationship was exclusive
1. Public policy concerns
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Public trust is at heart of nonprofit community
Consumers view nonprofit organizations-particularly voluntary health agencies whose
central missions are disease prevention and
cure--to be independent, unbiased, neutral
sources of expertise, information and
services
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In order to maintain public’s trust, nonprofits
need to preserve their independence and
maintain practices and policies anchored in
that public trust foundation
Commercial/nonprofit alliances as they are
developing appear to raise questions about
ability of nonprofits to maintain their integrity
and independence--in both actual fact and
public perception
2. Legal issues
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Key issue: whether use of nonprofit’s name in
association with product implies nonprofit
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has tested product
approves of product
endorses product
FTC Action
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1995 FTC settled case against Eskimo Pie
Corporation for advertisements for frozen
dessert products
Ads used ADA name and logo and stated:
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“Now Eskimo Pie and the ADA are partners in
providing the pure pleasure of frozen novelties to
everyone!”
FTC took position that ads implied ADA had
approved or endorsed the product; it had not
Yoplait charitable promotion
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1999 Yoplait Yogurt containers stated that $.50
would be donated to Breast Cancer Research
Foundation for each lid returned
Television campaign with same promise
9.4 million lids returned nationwide
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$4.7 million should have been donated
On underside of lid--visible only after purchase-indicated that maximum contribution was $100,000
regardless of number of lids returned
“pink washing”--using support of breast cancer
research to promote products
1999 16 Attorneys General issued
following five recommendations:
1. Endorsements
 Advertisements for commercial products
should not misrepresent that nonprofit
organization has endorsed the advertised
product
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If advertisement uses nonprofit organization’s
name or logo, and nonprofit has not endorsed
product, advertisement should clearly and
conspicuously disclose that nonprofit
organization has not endorsed product
2. Superiority claims/disclosure
 Advertisements for commercial products
using name or logo of nonprofit should avoid
making express or implied claims that
advertised product is superior to others in
same product category, unless claim is true
and substantiated
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If nonprofit has not determined advertised product
to be superior, advertisement should clearly and
conspicuously disclose that fact
3. Paid sponsorship
 Advertisements for commercial products
using name or logo of nonprofit should
disclose clearly and conspicuously that
corporate sponsor has paid for use of
nonprofit’s name or logo, when that is the
case
4. Deception/confusion
 Product advertisements arising from
commercial/nonprofit relationship should not
mislead, deceive or confuse public about
effect of consumer’s purchase on charitable
contributions by commercial sponsor
5. Exclusivity
 Advertising partnerships between commercial
and nonprofit entities should avoid exclusive
product sponsorships
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where exclusive relationship exists, product
advertisements using name or logo of nonprofit
should clearly and conspicuously disclose that
fact
American Heart Association
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Criticized for taking corporate contributions in
return for use of name and logo
Criticized for use of Food Certification Program
heart-check mark
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Criteria don’t include low sugar content
Insufficient scientific evidence of sugar as risk factor
for heart disease
AHA has endorsed Cocoa Puffs Cereal
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Cookie Crisp cereal
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120 calories (per cup)
14 grams of sugar (40% of calories)
No fiber
120 calories
13 grams of sugar
Jane Brody: “Hardly a nourishing start to the day,
even if they are low in fat.”
9/11 Tie-Ins
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In six months following 9/11 >$2 billion raised for
related charitable causes
Marketers saw opportunity to partner with nonprofits
United Way received 1,540 offers
To avoid appearance of profiteering and protect its
name, UW accepted only offers in which
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It had final say over promotions
100% of profits went to UW
Most companies only offered a share of profits
UW concluded ~ dozen deals on that basis
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In year following 9/11 GAO reported
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78 cases of charity fraud against nonprofit
organizations in New York
8 cases in other states
Also some problems from tie-ins with
products
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company promoting a sneaker “The Bravest”
portion of profits to go to families of New York City’s
343 deceased firefighters by way of nonprofit
organization
35,000 pairs sold at $49.95 each
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profit of $515,783
at time of sale no contract specifying how much of
profits went to nonprofit
four months later parties agreed to 10% of profits