Cause marketing or cause-related marketing can be a very powerful marketing model because it involves cooperative efforts between a “for profit” business, a non-profit organization, and the media, which all collaborate for mutual benefit. The reason this is such a powerful model is that the sponsor (for profit business) typically buys media time and space on behalf of the non-profit, rather than having the media provide it for free. This in turn, gives the non-profit much better exposure (reach and frequency) than they would otherwise get; the media gets paid for its time or space; and the sponsor gets the halo benefit of associating with an important cause.
In spite of the fact that it is a multi-billion dollar business and nearly every major corporation practices some form of cause related marketing, there are not a lot of resources dedicated to this growing field. The major force in the profession is the Cause Marketing Forum (see Resources below), which has a Knowledge Center, holds an annual meeting, and offers online telecourses.
Perhaps the best over view of the field is provided by Wikipedia, which provides a good background on the scope of the field, some early examples, and why it is important.
According to a report published by IEG, Inc., the sponsorship experts, cause marketing sponsorship by American businesses is rising at a dramatic rate. IEG says that a $1.52 billion was spent in 2008, and the number is expected to rise significantly in 2011.
Background on the Field
While the American Express/Statue of Liberty restoration project is perhaps the best known CRM campaign, an earlier one was equally as successful and had a much broader scope. Initiated in 1979 by Rosica, Mulhern & Associates for Famous Amos cookies, in this campaign, Wally Amos became the National Spokesperson for the Literacy Volunteers of America. 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. This case study is now used in university classrooms nationwide as an example of successful “cause-related marketing”.1
The creation of the term “cause-related marketing” is attributed to American Express, and 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 whereby a penny for each use of the AmEx card, and a dollar for each new card issued was given to the Statue of Liberty renovation program. Over a four-month period, $2 million was raised for Lady Liberty, AmEx transaction activity jumped 28 percent, and the formal concept that doing good for both business and society, was born.2
What would soon capture the attention of marketing departments of major corporations was that the impact that the promotion had on American Express card usage by consumers. Building on its earlier promotion, American Express later conducted a four-year Charge Against Hunger program, which generated approximately $22 million for a charity addressing poverty and hunger relief. In 2006, as part of Bono’s Product Red, American Express launched the American Express Red Card with campaign starred by supermodel Gisele Bündchen. In this promotion American Express made a donation to fight AIDS via consumer purchases. In May 2007, American Express launched an initiative called the “membersproject” . Cardholders were invited to submit ideas for projects and American Express is funding the winning project to provide clean drinking water with $2 million.3
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.
According to the Cone Millennial Cause Study:4
- 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 a belief that those companies are “good corporate citizens”.
A Win-Win-Win Solution
The possible benefits of cause marketing for all partners in the equation result in a win-win-win solution for each participant.
- Nonprofit organizations include an increased ability to promote their cause via the greater financial resources of a business, and an increased ability to reach possible supporters through a company’s customer base.
- The benefits of cause marketing for business include positive public relations, improved customer relations, and additional marketing opportunities.
- The benefits to the media are that they get a paid sponsor which will buy space and time for the cause, rather than giving it away for free under the more traditional PSA model.
The Many Forms of Cause Marketing
- Product, service, or transaction specific
- Promotion of a common message
- Product licensing, endorsements, and certifications
- Local partnerships
- Employee service programs
“The Next 50 Years” published by Golin Harris, reports that in the future companies will be measured by their commitment to the environment and to the communities in which they operate. The report goes on to state: “As companies compete for admiration and respect, social involvement will become the primary means for influencing public perception despite the dramatic changes in demographics and technology.”