The 'cause marketing' conundrum

Mustafa Khalifa asks whether it is fair for businesses to use charities to reach customers?

Those who tuned in to watch America's biggest sporting showpiece may have noticed an absentee at Super Bowl XLIV. On February 7, 2010, Pepsi did not have a Super Bowl commercial for the first time in 23 years. Instead, Pepsi is donating its $20 million Super Bowl budget to "good causes" and allowing the public the opportunity to choose which charities they wish to see the money go to.

In a new campaign called "Refresh Everything", Pepsi are making the funds available to various projects, listed in six categories: health, arts & culture, food & shelter, the planet, neighbourhoods and education. Pepsi will hold contests every month until November, allowing charities to compete for donations. The public can suggest charities and vote for their favourites on the campaign's website (which can also be reached through Facebook and Twitter). Since the campaign was announced, the soft drink manufacturer has received a huge buzz online. It has also generated a lot of press. Forbes, The Economist and Time Magazine have all written about it. Pepsi are embracing a form of advertising known as "cause marketing".

Pepsi are not the first US company to explore this area. The investment bank J.P. Morgan Chase set up a competition via Facebook called "Chase Community Giving", in which small charities competed to win $5 million in donations. Other recent examples include the "Shine A Light" competition by NBC Universal and American Express, which awarded a $100,000 grant to a small business chosen through its website.

But perhaps the best known example of cause marketing is that of Project (RED) which raises money for The Global Fund to Fight AIDS, Tuberculosis and Malaria. The brand is licensed to partner companies such as Apple, The Gap, Microsoft, Starbucks and Motorola, with U2 front man Bono as an active spokesperson. Each of the partner companies creates and sells a product with the Product (RED) logo and a percentage of the profits go towards the Global Fund. Consumers are more willing to spend their money on products connected to a worthy cause. This type of marketing has even been adopted by sole traders on eBay where sellers use the strategy to build up a healthy online reputation.

The rise of cause marketing coincides with the emergence of what trendwatching.com calls 'Generation G' (G for generosity, not greed). The website claims that consumers, particularly the younger age bracket, are increasingly trying to add value to their purchases by ensuring some good comes out of it. They want to buy brands associated with charities and are willing to switch to those supporting a worthwhile cause. The members of Generation G are often proponents of "slacktivism". A slacktivist is an individual who supports a social cause with minimal effort by, for example, wearing wristbands with messages on them or signing internet petitions.

Cause marketing taps into these trends by enabling consumers to engage with the brand and feel better about themselves at the same time. Many companies realise that their products are not inherently "ethical" (unlike, for example Fair Trade goods) so they must use other means to enhance their moral credentials.

But is it entirely moral? The question is whether multinationals such as Pepsi actually care about the charities they are donating to, or are they just using them to get closer to their customers? Project (RED), for example, has faced criticism over a lack of transparency over the amount of money going to the Global Fund as a percentage of every purchase. Many argue consumers should avoid buying the premium-priced products and donate the money directly to charity.

Another issue is that online competitions, such as Refresh Everything, are, in effect, popularity contests between charities - battles which worthy causes may not always win. Non-profits are no strangers to clamoring for the attention of the public. Competition is always fierce and, in order to the grab the public's attention, charities must tug at their heartstrings (and wallets). When the stakes get high and there is a potential to win donations in competitions, charities will be doing everything they can to make sure they are in with a fighting chance. Problems can occur when certain ethical boundaries are crossed in promotion. As advertising campaigns become more intense, the messages and images communicated can cross the threshold of indecency. Last year, an unauthorised advert which showed hundreds of planes aimed at Manhattan under the tagline: "The tsunami killed 100 times more people than 9/11" was released into the public domain. It had been created by an advertising agency but rejected by the World Wildlife Fund. Nevertheless, it graphically illustrated the potential of charities to cross the line. If the current craze for cause advertising is not properly controlled, it's not too difficult to imagine America's Next Top Cause and Britain's Got Charities on TV screens in the future.

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