The trouble with buying for a cause

Red was supposed to help both business and charity. But does it?

ANNE KINGSTON March 26 2007

The trouble with buying for a cause

Red was supposed to help both business and charity. But does it?

ANNE KINGSTON March 26 2007

The trouble with buying for a cause

Red was supposed to help both business and charity. But does it?

BY ANNE KINGSTON When Bono unveiled the global brand Red at the World Economic Forum at Davos in January 2006, it was heralded as a bold new model in cause-related marketing, a win-win-win scenario destined for case study in the Harvard Business Review: launch partners the Gap, Apple, Motorola, Giorgio Armani, Converse and American Express would donate a percentage of profits to the Geneva-based Global Fund to Fight AIDS, Tuberculosis and Malaria; shoppers could snap up stylish Red iPod nanos, Red MOTORAZR V3 phones, Red mud-cloth Converse sneakers and Red Gap Empowe(red) T-shirts, buoyed by the knowledge they were fighting AIDS in Africa; the Global Fund would receive publicity and funds from a new donor base without spending a penny. Bono framed Red as a “commercial imperative” that would create a “sustainable” income stream for the fund. “Philanthropy is like hippie music, holding hands,” the U2 frontman said. “Red is more like punk rock, hip hop; this should feel like hard commerce.” A soft launch in March was followed by a splashy, celebrity-riddled rollout in October. Oprah championed Red, Chris Rock proclaimed “Use Red, nobody’s dead” for Motorola, Steven Spielberg donned a Red Gap leather jacket, his first-ever commercial endorsement. Now, a mere five months later, Red is mired in censure amid speculation that its partner companies are bleeding its signature colour, while doing comparatively little for charity. “Bono & Co. spend up to $ 100 mil on marketing” blazed a headline in last week’s Advertising Age above a story that claimed the companies associated with Red had forked out a fortune to market the brand while the Global Fund received just US$18 million. This week, the magazine ran a rebuttal by Bobby Shriver, Red’s CEO and driving force, claiming the brand had netted US$25 million on total profits in excess of US$60 million, five times the amount the Global Fund had received from the private sector since its inception in 2001. He said the US$100 million marketing figure is “wrong, by more than 50 per cent,” and noted Red generated traffic for its vendors as well as awareness of AIDS in Africa. In an editor’s note, Advertis-

ing Age said it stood by its story.

The dust-up highlights the vagaries surrounding ever-ubiquitous cause-related marketing. Shopping for a better world is built in to the consumer ethic: buying a pink KitchenAid mixer promises a cure for breast cancer; a bottle of Starbucks’ Ethos water will deliver clean water to “children of the world,” Ben & Jerry’s new flavour “Stephen Colbert Americone Dream” donates more vaguely to “various charities.” Samantha King,

CRITICS SAY THE RED CAMPAIGN IS MORE ABOUT MARKETING THAN FIGHTING HIV/AIDS IN AFRICA

a Queen’s University professor and author of Pink Ribbons, Inc.: Breast Cancer and the Politics of Philanthropy, a critical look at the commercialization of breast cancer, says that within the non-profit sector a marketing outlay of $3 for every $1 brought in is the norm. Raising money isn’t always the primary objective of cause-marketing, says Jocelyn Daw, vice-president of marketing and social engage-

ment at Imagine Canada, and author of Cause Marketing for Non-profits. “It can be an effective way to partner with a company, piggyback on their marketing and benefit from their brand and their reach to a range of consumers,” she says. King’s concern is that those consumers can fall prey to an I-gave-at-theGap passivity that reduces charity to the cause du jour. Whatever happened to the rain forest? As a cause, it has been upstaged by AIDS in Africa which, too, is destined to meet with consumer ennui. King also notes corporations’ need to sell product dictates that the messages surrounding the cause tend to be pretty safe:“They want to comfort rather than get people thinking.”

Such skepticism underlies the Red backlash. It can be traced to the website buylesscrap.org,

which floated the US$ 100-

million Red marketing figure and sparked the AdAge story.

Set up by a group of San Francisco designers and art-

ists, the site condemns “the ti(red) notion that shopping is a reasonable response to human suffering,” and offers direct links to charities, including the Global Fund. Cofounder Ben Davis, who faults Red for lack of transparency, admits the US$100-million marketing figure was a guesstimate. Davis has coined the term “causumer” to describe the shopper navigating another level of con-

fusion in the consumer decision-making process. Being a “causumer” can be a positive market force, he says, provided information exists. “It’s not enough to say ‘Save lives buy this shirt.’ It’s not enough to say ‘50 per cent of gross profits go to the cause,’ because that’s not a real number to anyone. That could be nothing.” Red vendors, who have five-year contracts, donate some 40 per cent of undefined “profits” directly to the Global Fund. Individual company donations are not released. What each product generates for the fund varies: Apple donates $10 from the sale of every Red iPod nano, for example, and Gap offers “50 per cent of profits” from Red merchandise.

Speaking from his Los Angeles office, Shriver says Red isn’t targeted at “causumers.” “Shoppers don’t perceive buying a T-shirt as a charitable act,” he says. “They’re buying a cool T-shirt.” He presents the Red brand as infiltrating the commercial transaction. Money donated is essentially found, just as marketing money was earmarked. “The idea was, ‘you’re going to buy a cellphone anyway, so why not buy a Red one,’ ” he says. “Buy that and the fund gets $20.” Red is only a “winwin-win,” he notes, if it drives higher sales for the store or manufacturer. “The premise is, you will sell more with this logo. If you sell the same amount it won’t work. They’re not in business to give away a piece of their margin. They’re in business to give away that residual piece of their margin that comes from Red.”

His goal is to build a brand, he says, not create an efficient way to give to AIDS in Africa. (That said, Red has earmarked funds be spent on “women and children” because programs devoted to treatment and education of girls and women deliver the greatest return on investment.) “My job is to make Red a well-known-enough brand so that 10 years from now people will think of it like the Nike swoosh. I want to create a brand marketers feel they must have or they will lose business.” Given that each vendor handles its own design, maintaining brand integrity is a challenge; all products and marketing imagery are vetted through Red. Shriver calls the Advertising Age’s story “criminally negligent.” He’s in talks with prospective Red vendors. If they pass, he won’t know whether or not the fallout was a factor. Red has donated more money to AIDS in Africa than Ireland, Saudi Arabia, even China, Shriver notes. “Instead of slamming Bono, Ad Age should slam China.” As for donating directly, he’s for it. “I think it’s thrilling if it would happen in the real world.” he says. “But I wonder if any of those guys who set up the website had ever donated to the Global Fund or even heard of it prior to Red.” M