Cause-related marketing has exploded in recent years even though it is a relatively young concept. It began, on a national scale, in the early 1980s when American Express joined with the nonprofit group that was raising funds to restore the Statue of Liberty.
American Express gave a portion of every purchase through their credit card to the endeavor and an additional amount for every new application that resulted in a new credit card customer. The company also launched a $4 million advertising campaign.
The results are now legendary: the Restoration Fund raised over $1.7 million and American Express card use rose 27%. New card applications increased 45% over the previous year. All this was accomplished with a three-month campaign.
Everyone involved was a winner...the nonprofit cause received needed funds, American Express increased sales of its product and achieved a reputation for social responsibility. American Express even trademarked the term "cause-related marketing."
Now companies have fully embraced what is called "doing well while doing good." Cause-related marketing may become the primary way that businesses express their social responsibility. The growth of cause marketing has exploded, from a $120 million industry in 1990 to $1.62 billion in 2010. Plus consumers seem to really like it. Research has suggested that more than 89% of consumers would switch brands to buy a cause-related product if price and quality were similar.
There are now many versions of cause-related marketing, but basically it is an agreement between a business and a nonprofit to raise money for a particular cause. The business expects to profit by this arrangement by selling more products and by enjoying the "halo" affect of being associated with a respected nonprofit or cause.
Corporate sponsorship is a bit closer to cause marketing since the corporation gives the nonprofit money to hold an event, run an art exhibit, or other time-limited activity. The funds may come from the community relations budget of the corporation or the marketing budget and the corporation expects a certain amount of publicity in the way of signage, PSAs, promotional materials etc.
A cause-related marketing program is not an anonymous or low-key donation to a nonprofit but one that lets the public know that this corporation is socially responsible and interested in the same causes that its consumers are. The nonprofit benefits both financially and through a higher public profile as a result of its partner's marketing efforts.
There are advantages for both nonprofit and business. For business, cause-related marketing proves that it is socially responsible and provides great public awareness of its values and willingness to support good causes.
For the nonprofit, the contributions from a cause-related marketing project can be significant, and those funds are usually unrestricted so even overhead costs can be supported by them. Besides actual monetary benefit is the intangible value of the publicity and advertising that usually accompanies a cause-related marketing program, which is often done by the corporation's public relations and marketing departments in tandem with the nonprofit's own marketing.
Corporate social responsibility (CSR) has become big business for major corporations in the 21st century. Companies have learned that their customers care about the impact of their purchases, whether it is on the environment or the treatment of workers in other nations. In response to these growing concerns, companies have taken steps to minimize any negative effects from their businesses and to give back to the communities in which they operate.
Corporate cause sponsorship will grow 3.4% in 2014 to hit $1.8 billion, predicts the IEG Sponsorship Report.
Since 2002, cause sponsorship has grown as follows:
2013 -- $1.78 billion, 4.8% growth
2012 -- $1.70 billion, 1.2% growth
2011 -- $1.68 billion, 3.7% growth
2010 -- $1.62 billion, 6.7% growth
2009 -- $1.51 billion, 0.3% decline
2008 -- $1.52 billion, 5.5% growth
2007 -- $1.44 billion, 10.4% growth
2006 -- $1.34 billion, 20.2% growth
2005 -- $1.17 billion, 18.4% growth
2004 -- $988 million, 7.2% growth
2003 -- $922 million, 6.3% growth
2002 -- $816 million, 13% growth
Although sponsorship is still seeing steady growth, corporate interest in other marketing alternatives, particularly digital (including social and mobile) media, has dampened enthusiasm for significantly increasing sponsorship spending.
Instead of viewing “new media” as competition, sponsorship properties would be wise to emphasize their role as catalysts in driving interest, engagement and enthusiasm for their partners’ digital, social and mobile platforms through their nearly unparalleled ability to provide relevant content. As more marketers discover the ability to drive positive ROI by integrating digital and sponsorship efforts, the effect should be stronger growth for both segments.
But it is also true that a growing number of sponsors are looking to establish partnerships that create incremental value for both parties through efforts such as developing content, collaborating on activation and creating new products.
The first survey of men in the six-year history of The PRWeek/Barkley Cause Survey has uncovered surprising data regarding men's attraction to brands that have a cause marketing program. Running contrary to the natural assumption that women are solely attracted to cause programs, 88% of men say it's important for a brand to support a cause, 61% have purchased a brand because it supported a cause, 67% would try a brand because it supported a cause, and 55% would pay more for a brand that supported a cause. For the full survey, visit www.barkleyus.com.
"The Boomer generation has carved out the path toward looking at cause marketing as an important way to connect with consumers," said Mike Swenson, President, Barkley Public Relations. "But even more so do Gen X and Gen Y Millennials, who view it as something that must be done. That's why we're seeing the numbers we do with men. It's no longer a gender issue."
While men overwhelmingly direct their dollars toward cause, 68% of corporate marketing executives say they have no plans to target men with their cause efforts. This at a time when there has been an explosion of cause efforts. 75% of brands now engage in cause marketing (up from 58% in 2009) and 97% of marketing executives believe it to be a valid business strategy.
One of the most interesting findings of this year's survey came in the verbatim answers from consumers. When asked to identify companies that are not doing cause programs but should be, the most common consumer responses were BP, Apple and Goldman Sachs.
While men care about cause nearly as much as women, there were distinct differences between the two. When it comes to which causes they support, men chose children/education and women chose health (per 2009 Cause Survey data). Yet when it came to health, 94% of men said they were comfortable supporting causes that addressed prostate cancer, AIDS or heart disease.
American demand for cause is stronger than ever, according to 20 years of benchmarking data released by Cone Communications. Despite a marketplace saturated with cause-related programs and messages, the U.S. consumer appetite for corporate support of social and environmental issues appears insatiable, according to the 2013 Cone Communications Social Impact Study.
Although the number of pressing social issues is vast, Americans are clear in the areas they most want companies to focus. Economic development is the number one priority for the majority of consumers (44%), and they want to feel the impact of corporate efforts close to home in their local communities (43%).
“U.S. consumers’ hearts are in the right place, but they are clamoring for proof of progress. They need verification that the efforts of companies, as well as their own personal participation in cause marketing, are affecting quantifiable social impact,” says Craig Bida, executive vice president – Social Impact, Cone Communications.
As cause evolves, so too are the channels in which to engage these emerging cause champions, as well as stakeholders in general. Traditional channels of on-product messaging (21%), media (16%) and advertising (16%) still hold tremendous value as Americans indicate they are among the most effective ways to reach them with cause-related information. However, social media is opening new doors in the world of social impact, giving consumers near-immediate access to information about companies, the issues they support and ways to get involved.
“The consumer mandate for companies to do more than stand for something and show proof of purpose is absolute,” Bida says. “Americans are also resoundingly clear in their desire to be engaged and help make a tangible difference. Companies must engage new audiences and utilize new channels to deliver meaningful social impact.”
From employees, to consumers, to customers, stakeholders must be elevated beyond an end-game audience to genuine partners. No company can go it alone – the hearts and hands of the very people who drive the business will also drive the success of social impact. Realize they are cause-savvy – they see and hear about social and environmental issues nearly every time they buy something. Break through the sea of ribbons by giving them specific jobs that only they can do – and that must be done for real progress to be made.
The days of siloed philanthropy and corporate responsibility are long-gone. Leadership companies understand the interconnectedness of today’s complex issues, as well as the necessity for an integrated approach to corporate social responsibility. Social impact is a vital component of CSR – one that often brings a company’s broader commitments to citizenship to life in personal and tangible ways. Integration is crucial for maximizing efficiencies as well as amplifying opportunities for impact.
Traditional models for cause are giving way to new, inventive approaches to social impact – with potentially game-changing results. Leading companies are activating cross-industry collaborations to identify creative solutions, using technology and digital platforms to share and gather information, and forging unlikely partnerships to take advantage of distinct areas of expertise and unexpected assets.
Social media simply cannot be ignored, and companies must strategically and thoughtfully utilize this living communication channel to not only update on new programs and progress toward goals, but also to encourage active dialogue and idea generation with vested parties. Consumers are already primed for sharing information with their personal networks, and can quickly become credible third-party brand advocates to help companies form new relationships and generate awareness of and participation in social impact efforts.
Between a starting point and the end goal, there are many milestones along the way. Establish success indicators at the outset of program development – and communicate them, warts and all, transparently and consistently. Ensure stakeholders understand how they’re individually contributing to the larger task at-hand, as well as how collective efforts are achieving progress.
Over ten thousand adults in 10 countries around the world make one thing abundantly clear in this study: the question is not whether companies will engage in corporate social responsibility, but how they will create real and meaningful impact. Corporate social responsibility is no longer an option — it is emphatically and indisputably a must-do.
Today’s consumers are savvier, more sophisticated and more connected than ever before. Cognizant of their own capacity to influence social and environmental issues, they are looking more closely at the collective impact of corporations and individuals. In this new era of CSR, the need for companies to articulate progress beyond CSR purpose has never been greater. And although nuances certainly exist from market to market, the findings and insights from this report carry universal implications for companies.
When companies support social or environmental issues, consumer affinity overwhelmingly upsurges. Nearly all consumers say that when companies engage in CSR, they have a more positive image of the company (96%), would be more likely to trust that company (94%) and would be more loyal to that company (93%). (91%) of global consumers are likely to switch brands to one associated with a good cause, given comparable price and quality.
Five Years of Data Reveals Purpose to Be a Driving Force Behind the Reengineering of Brand Marketing Around the World, 2012 Edelman goodpurpose® Study Finds April 26, 2012, NEW YORK, NY
“The tension of this paradox spells significant opportunity for marketers. While U.S. consumers currently have less time and money to put towards societal issues, they still feel they’re most responsible to help,” said Carol Cone, global practice chair, Business + Social Purpose, Edelman.
“Brands and corporations can ease the burden for consumers by making involvement in social issues easier and more aligned with the core needs they face today –jobs, hunger, education and healthcare.”
Despite the declining involvement in the U.S., Purpose remains a deeply held belief around the globe that is driving consumer behavior and preference.
When quality and price of a product are deemed equal, social purpose has consistently been the leading purchase trigger for global consumers since 2008, muscling design and innovation and brand loyalty aside. Over those years, the relevance of Purpose as a purchase factor has risen 26 percent globally. Growth has been even more prominent over the last 18 months in markets such as Japan (+100 percent), China (+79 percent), Netherlands (+43 percent), India (+43 percent), and Germany (+36 percent). Brands aligning themselves with causes are not only securing more consumer consideration, but are also earning their dollars and support.
While 87% of global consumers believe that business needs to place at least equal weight on society’s interests as on business’ interests, less than a third believe business is performing well in addressing societal issues. This performance gap is likely to drive disillusionment, disengagement and outright distrust from consumers. Rather than merely exercising their “license to operate,” leading brands and corporations of the future must move beyond operational imperatives and social add-ons to establish their “license to lead.” Organizations today must lead with the head and the heart. Approximately half of respondents believe organizations should donate a portion of profits (51%) and products or ser-vices (50%), while 49% believe companies should be creating a product or service that helps address a societal issue. 80%of global consumers believe it is important for companies to make them aware of their efforts to address societal issues. When these actions are taken, consumers will praise those brands and corporations that support a good cause – and they will also punish those that do not.
In the US, charity no longer begins at home…it is now in the home. When it comes to societal issues, US consumers are most concerned about improving healthcare and alleviating hunger and homelessness [See Figure 8].
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