Cause marketing

Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative efforts of a "for profit" business and a non-profit organization for mutual benefit. The term is sometimes used more broadly and generally to refer to any type of marketing effort for social and other charitable causes, including in-house marketing efforts by non-profit organizations. Cause marketing differs from corporate giving (philanthropy) as the latter generally involves a specific donation that is tax deductible, while cause marketing is a marketing relationship generally not based on a donation.

History

The creation of the term "cause-related marketing" is attributed to American Express, and it was coined to describe efforts to support locally based charitable causes in a way that also promoted business. The term was then used to describe the marketing campaign led by American Express in 1983 for the Statue of Liberty Restoration project. The terms "cause-related marketing" and "cause marketing" continued to grow in usage since that time. In more recent years the term has come to describe a wider variety of marketing initiatives based on the cooperative efforts of business and charitable causes.

Background

According to a report published by onPhilanthropy, cause marketing sponsorship by American businesses is rising at a dramatic rate. Citing an IEG, Inc. study, $1.11 billion was spent in 2005, an estimated $1.34 billion will be spent in 2006, and the number is expected to rise further in 2007.

Cause-related marketing is a powerful marketing tool that business and nonprofit organizations are increasingly leveraging. According to the Cone Millennial Cause Study in 2006, 89% of Americans (aged 13 to 25) would switch from one brand to another brand of a comparable product (and price) if the latter brand was associated with "good cause". The same study also indicated that a significant percentage surveyed would prefer to work for a company that was considered socially responsible. This can be linked to the increase in workplace giving programs. Earlier studies by Cone indicate an upward trend in the number of Americans who associate their own buying habits with cause marketing as well as an expectation that companies to be "good corporate citizens". These studies also show a substantial increase from just before to just after the September 11, 2001 attacks.

Numerous other studies have also been conducted to show that cause-related marketing has helped to increase a company's profits. For example, in the cause marketing campaign by American Express (to which the term "cause marketing" is attributed), the company saw a 17% increase in new users and a 28% increase in card usage.

Benefits

The possible benefits of cause marketing for nonprofit organizations include an increased ability to promote the nonprofit organization's cause via the greater financial resources of a business, and an increased ability to reach possible supporters through a company's customer base. The possible benefits of cause marketing for business include positive public relations, improved customer relations, and additional marketing opportunities.

Online Cause Marketing

Overview

Although originally a marketing strategy that occurred offline, cause marketing has been conducted more and more through online channels in the last decade. This is due in part to the increasing percentage of households with internet connections. As with other types of marketing campaigns, companies can leverage online marketing channels along with other offline channels such as print and media. (Sometimes referred to as integrated marketing).

Online Charity Auctions

In recent years, online auctions have been used in cause marketing strategies using a number of different online auction platforms. eBay provides a dedicated charity program, eBay Giving Works, that allows online auction sellers to donate a percentage of their sales to a nonprofit orgranization. Businesses and nonprofit organizations can also use the program for cause marketing and nonprofit fundraising programs. This and other online auction platforms like, cMarkets, have been used to conduct a wide range of cause marketing campaigns, like the auctioning of the celebrity-autographed Harley by Jay Leno in 2005 or the chance to be the 18th man on the BMW - Oracle race boat as it competes for America's Cup in 2007.

Types of cause marketing

Cause marketing can take on many forms, including:

• Product, service, or transaction specific
• Promotion of a common message
• Product licensing, endorsements, and certifications
• Local partnerships
• Employee service programs

Examples

• One example of cause-marketing would be the partnership of Yoplait's "Save Lids to Save Lives" campaign in support of the Susan G. Komen Breast Cancer Foundation. The company packages specific products with a pink lid that consumers turn in, and in turn Yoplait donates 10 cents for each lid.

• In 1979, Wally Amos become the National Spokesperson for the Literacy Volunteers of America. According to the organization, Wally has alerted more people to the illiteracy problem than any other person in history. This strategic cause-marketing tie-in helped to tell the Famous Amos Cookie story while maintaining visibility and is responsible for many new and expanded literacy programs.

• An example of a nonprofit certification of a product (business) includes the American Heart Association's stamp of approval on Cheerios, the popular breakfast cereal.

• Launched in early 2006, Product Red is an example of one the largest cause-related marketing campaigns to date given the number of companies and organizations involved as participants as well as its reach worldwide. It is also an example of a cause marketing campaign that is also a brand on its own. Product Red was created to support The Global Fund to Fight AIDS, Tuberculosis & Malaria (aka "The Global Fund") and includes companies such as Apple Computer, Motorola, Giorgio Armani, and The Gap as participants.

See also

• Corporate image
• Foundation (charity)
• List of marketing topics
• Marketing
• Non-profit organization
• Philanthropy
• Public relations

External links

• Cone Corporate Citizenship Studies
• List of Noted Organizations and Foundations promoting Business-Nonprofit Partnerships