Product (RED) and the Dishonesty of Cause Marketing

Product (RED) and the Dishonesty of Cause Marketing

There is a good blog post on Aidwatch, Big Willy Easterly’s cynical aid-takedown machine, about the role of celebrities in promoting development and their relative benefits.  This post is just Bill being Bill, railing against the status quo.  In this post, two guest bloggers, Lisa Ann Richey and Stefano Ponte, who have just authored a book about the topic, titled Brand Aid, discuss the problem of “cause marketing”:

In the book, we examine what happens when aid celebrities unite with branded products and a cause. The resulting combination—what we call “Brand Aid”—is aid to brands because it helps sell products and builds the ethical profile of a brand. It is also a re-branding of aid as efficient and innovative, based on “commerce, not philanthropy.”

In the case study of Product (RED), a co-branding initiative launched in 2006 by Bono, we show how celebrities are trusted to guarantee that products are “good.” Iconic brands such as Apple, Emporio Armani, Starbucks and Hallmark donate a proportion of profits from the sale of RED products to The Global Fund to finance HIV/AIDS treatment in Africa. In essence, aid celebrities are asking consumers to “do good” by buying iconic brands to help “distant others” —Africans affected by AIDS. This is very different from “helping Africa” by buying products actually made by Africans, in Africa, or by choosing products that claim to have been made under better social, labour and environmental conditions of production.

In Product (RED), celebrities are moving attention away from “conscious consumption” (based on product information) and towards “compassionate consumption” (based on emotional appeal). To us, this is even more problematic than the risk of negative media attention that celebrities bring to development aid.

This reminded me of an article in the New York Times from 2008 about Project (RED), which revealed this tidbit of information about the project:

In its March 2007 issue, Advertising Age magazine reported that Red companies had collectively spent as much as $100 million in advertising and raised only $18 million. Officials of the campaign said then that the companies had spent $50 million on advertising and that the amount raised was $25 million. Advertising Age stood by its article.

I remember not being so surprised when I read this, but still a little ticked off.  My take on corporate social responsibility is that it can often be disingenuous, dishonest, or, as worst, deliberately misleading.  I like the idea of money in development that is not politically-motivated, which is also, frequently, dishonest and disingenuous.  I also like the idea of profit-oriented businesses with not much tolerance for wasting money allocating resources to some of these causes.  But I think it masks some of the real problems, which are systemic and global, and provides a cover for the perpetrators of those problems.  “Cause branding” is a relatively low-cost and easy investment for a business to make, without actually having to produce the results it needs.  For Starbucks, a $100 million campaign is pocket change, and to raise only $18 million to the Global Fund – an organization that has been recently skewered in the press for corruption and waste – is a travesty.  (My intention is not to villify the Global Fund, which has seen much of its funding put on hold because $34 million, or 0.3% of the total, was potentially lost due to corruption – which is pretty damn good considering the track record of other projects).

Apple is another participant in the Product (RED) campaign, which states on its website that “the purchase of one iPod Nano (Product)RED can provide over 3 weeks of lifesaving medicine to someone living with HIV in Africa.”  Given that it costs $0.40 per day for medication, according to the website, that means that Apple is giving $8.40 on each iPod Nano.  A few years ago, when the iPod Nano was first released, BusinessWeek tracked down the parts suppliers for the iPod Nano and arrived at an estimate of its profit margins, after parts and labor but before distribution and marketing, of 50%, or about $90 in monetary terms.  So Apple is giving less than 10% of its gross margins to provide medication for poor children somewhere.  And it is using the other 90% to purchase tantalum, tungsten, tin, and gold from the Democratic Republic of Congo, and, in doing so, helping to fuel the devastating war that is happening in the country.  But an iPod from Product (RED) will provide life-saving medicine to one child for three weeks.  (In fairness, three days ago, Apple and Intel agreed to stop buying conflict minerals from the DRC, though it took a Nicholas Kristof campaign to galvanize a change of heart).

Gap, a company that, until a 2007 Guardian expose revealed that it employed children in India to manufacture its clothes, employed children in India to manufacture its clothes.  Gap is also part of Product (RED).

Nike is another member of Project (RED), offering a special line of red shoelaces, with a catchy motto – “Lace up, Save Lives.”  From Wikipedia:

Nike, Inc. has been accused of having using a history of using sweatshops, a working environment considered by many people to be dangerous and difficult. Workers can be exposed to hazardous materials, harmful situations, extreme temperatures, and abuse from employers. Sweatshop workers often work long days, sometimes exceeding 14 hours, and earn pay far below a “living wage“.

You get the point.

Another point that I think is relevant here is that “cause marketing” it cheapens the act of doing good.  Now, all of a sudden, buying that same cup of coffee that you buy every morning from Starbucks makes you feel a little better about the activity, when, in reality, you didn’t actually do anything differently.  Doing good requires hard work and giving up things, not buying more things.   Being able to gain satisfaction consuming products you don’t actually need dilutes the act of sacrifice.  Emporio Armani and Bugaboo, which donates a whopping 1% of its total revenue to the Global Fund, are members of Product (RED).  Instead of paying $200 for Armani shades, why not buy a pair of UV 400’s at CVS for $20 and give the other $160 to Oxfam?  Now that is a sacrifice.

In an old issue of the Stanford Social Innovation Review, Mark Rosenman penned an article titled “The Patina of Philanthropy” about the Project (RED) Campaign.  He identifies four major problems with corporate philanthropy of the Project (RED) hue:

What’s wrong with all of this ostensible “corporate generosity”?  First, it is self-serving, further diminishing true altruism in the corporate world. We live in a society where values are threatened, and avarice and greed need to be better balanced by a sense of the greater good – the commonweal. If values erode further in the market, nonprofits and the rest of us are all in deeper trouble.  Second, all of us need to understand that, in the words of Buy(Less), shopping is not a solution.  We cannot consume our way to charity and to a better world.  Doing good sometimes requires sacrifice, and we ought not allow ourselves to be convinced that we’ve done our part because of the color of what we use.  Third, we generally don’t know how much goes to the cause and how much goes to profit for each sale or in the aggregate; there is no true transparency or accountability.  What do direct and secondary benefits add up to for the corporation?  Are charities being fairly compensated for those benefits?  Fourth and last, we need to remember that there really is a profound difference between doing well and doing good.  To the degree that we confuse the two, we substitute ourselves for the other and are diminished rather than enriched.

To be honest, cause marketing isn’t a whole lot different than the principles behind foreign aid.  Except with government aid, the currency traded is influence, rather than money.  These campaigns – whether government or corporate-driven – provide an alibi for not making real sacrifices.  Paint an iPod red and you still look good in the eyes of the consuming public.  And you get to keep on buying tantalum from the DRC to boot.  And what about the celebrities that champion these causes?  I might describe them as I was once described here, as the defense attorney for the criminals.  So while I appreciate the idea of corporate philanthropy, I will probably stick with my normal stance on these sorts of issues and err on the side of cynical disbelief.

UPDATE: Just came across this gem from the Chronicle of Philanthropy.  Bummer:

Fund raisers have long worried about a possible downside to corporate-charity marketing deals—that people who buy a special brand of yogurt or computer or stuffed animal because a retailer promises to give a small percentage of the purchase price to a good cause will figure they have met their charitable obligation and not give as much in direct donations.

It turns out the worries are warranted, according to new research from the University of Michigan’s Ross School of Business.

People who buy so called cause-related products give a lot less in direct contributions, according to Aradhna Krishna, a professor of marketing at the school.

“If two consumers have equal preference for a product, which is offered at the same price to both, but one of them buys this product as a cause-marketing product, her charitable giving will be lower than the other’s,” Ms. Krishna writes.

In addition, Ms. Krishna writes that cause marketing warps consumers’ minds into thinking that they’re contributing more than they actually are, since “people may mentally assign their cause-marketing expenditure as their charitable giving.”

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