Cause-Related Marketing

Increasingly, companies are supporting myriad causes through diverse marketing activities that are intended to enhance a company’s reputation. Cause-related marketing is an umbrella term that is often used to encompass these activities. A variety of other terms are used as well, including corporate social marketing, corporate societal marketing, cause branding, cause advertising, mission marketing, and passion branding. Irrespective of the term, these activities are marketing initiatives in which the resources of companies are used in the service of a cause. The resources may include professional time and know-how (e.g., marketing or advertising expertise) and/or other resources including access to media, money, in-kind contributions, and grassroots volunteer support. It is important to differentiate cause-related marketing from social marketing, which is the marketing of causes by nonprofit or public organizations without company involvement. This entry will provide background on the development of cause-related marketing, describe common forms, and address issues of effectiveness and ethics.

Cause-related marketing emerged in the 1980s as the progeny of corporate philanthropy and marketing. In 1983, American Express launched the first nationwide cause-related marketing campaign when it advertised that it would donate to the restoration of the Statue of Liberty based on customer transactions—a 1-cent donation every time its card was used and $1 every time a new card was issued during the fourth quarter. Cause-related marketing typically has both economic objectives characteristic of marketing and noneconomic or social objectives characteristic of philanthropy. Economic objectives may be long-term, such as improving the company’s image and increasing goodwill, or short-term, such as increasing the sales of a given product. Noneconomic or social objectives may vary as well. They may focus on an early stage in the hierarchy of effects, such as raising awareness of a cause, or on a late stage, such as persuading people to engage in a socially responsible behavior, such as buying green products.

Forms of Cause-Related Marketing

Since the 1980s, cause-related marketing has proliferated. Its forms are many and varied, and they are often used in combination in integrated communication campaigns.

The form most identified with cause-related marketing is a promise by a company to make a donation to a social cause based on a revenue-producing transaction by customers (e.g., the Statue of Liberty renovation campaign by American Express). Some scholars associate the term cause-related marketing exclusively with this tactic. It typically involves an advertising campaign that ties the sale of a product to a cause, with a portion of the proceeds donated to the cause. For example, Yoplait’s Original and Greek Yogurts have pink lids with codes on the back during October, which is National Breast Cancer Awareness Month. Yoplait advertises that consumers can go to a website, enter a code from a lid, and designate a 10-cent donation by Yoplait to one of three breast cancer organizations.

Advertising with a social dimension is as diverse as the companies themselves and their interests. For example, a Coca-Cola advertisement highlights the company’s contributions to fighting obesity through providing 180 no- or low-calorie drinks; offering smaller, portion-control cans of sugared drinks; supporting Boys and Girls Clubs’ exercise programs; and collaborating with nutritionists to create a zero-calorie, all-natural sweetener. This type of cause-related marketing is also categorized as corporate advertising, which is designed to enhance the company’s reputation and communicate its values and interests rather than sell its products. Advertising with a social dimension can also be defensive or reactive. For example, some have suggested that the Coca-Cola ad about its role in combating obesity was an attempt to defend itself against efforts to tax sugared drinks and limit soda sizes.

Cause sponsorships enable companies to tie their names and their donations directly to causes through sponsoring cause-related events. Companies make contributions (e.g., money, in-kind donations, even volunteer support) to support the events. For example, the Walt Disney Company is a long-time sponsor of the Special Olympics Games, providing financial and volunteer support. At times, Disney has featured its employees as Special Olympics volunteers in ad campaigns.

Cause-related marketing initiatives can develop into partnerships between companies and nonprofits, called social alliances. Social alliances are long-term, mutually beneficial partnerships that are designed to accomplish strategic goals for both companies and nonprofits. The company’s strategic goals typically involve marketing, so social alliances often encompass a variety of cause-related marketing initiatives. For example, the Walt Disney Company’s sponsorship of the Special Olympics Games developed into a multiyear social alliance with Special Olympics and ESPN, called Unified Sports for Social Inclusion. Its goal is to register 1 million participants, including athletes (people with intellectual disabilities), teammates (people without intellectual disabilities), and coaches. As another example, the Coca-Cola Company has a social alliance with Boys and Girls Clubs of America (BGCA). Coca-Cola’s support of the BGCA exercise program highlighted in the anti-obesity ad described above is part of a 10-year social alliance called Triple Play, through which BGCA club members increase their daily physical activity, learn about good nutrition, and receive support in developing healthy relationships.

Effectiveness of Cause-Related Marketing

The success of cause-related marketing is in large part in the eye of the beholder and the hands of the evaluator, who selects the measures of success. Some companies seek breakthrough advertising or a sustainable differential advantage, which is difficult to achieve in any context. Others hope to use cause-related marketing to communicate the essence of the company’s values to its key constituents or motivate the workforce, which may be easier to achieve than breakthrough advertising. Others use it to deflect criticism or as an insurance policy against future criticism. Some companies also consider the benefit to the cause or to society more generally when assessing effectiveness. As such, measures of success and the outcomes are varied.

The effectiveness of cause-related marketing is typically based on the premise that the company can appeal to a segment of consumers who care about a cause or about causes in general. Both nationwide surveys and academic research have identified segments of socially concerned consumers who react favorably to cause-related marketing. Research has demonstrated that at least in some situations cause-related marketing can influence product choice, increase sales, increase loyalty, improve corporate reputation, and motivate the workforce. However, other factors such as price and convenience often come into play, and consumer reactions to cause-related marketing appear to be particularly complex. For example, a number of factors have been found to moderate consumer responses, including consumers’ attitudes toward the cause itself, their prior beliefs about the company’s reputation, their perception of the company’s intentions, and their attitude toward cause-related marketing in general. Factors related to the design of the initiative matter as well, such as the fit between the cause and the company’s business, how the message is framed, and whether consumers have a choice regarding the cause to which the company donates. While it is no magic bullet, cause-related marketing can be an effective marketing tool with the added dimension of benefiting other stakeholders as well.

Ethics of Cause-Related Marketing

Cause-related marketing has been praised as one of marketing’s finest contributions to society and criticized as one of marketing’s greatest means of exploitation. It is subject to many of the same criticisms as marketing more generally, but this discussion focuses on criticisms that are specific to cause-related marketing.

Some critics assert that cause-related marketing is a misuse of shareholder assets. They argue that the only social responsibility of business is to create profits for shareholders and jobs for employees. As such, marketers should be aware of whether and how the company is benefiting from cause-related marketing.

Some critics believe that cause-related marketing prompts companies to meddle in areas in which they have no expertise. Companies are not generally known for their expertise in addressing social causes. However, increased pressure to be socially responsible has prompted companies to develop expertise related to the social issues about which they are most criticized. Also, through social alliances, companies often work in partnership with nonprofit organizations or public entities with expertise in addressing social causes. Marketers should be attuned to whether the cause and society are benefiting from their cause-related marketing.

Some people fear that cause-related marketing gives companies too much power over nonprofits. For example, they worry that a chilling effect could prevent nonprofit leaders from speaking out on controversial issues that might alienate their corporate partners. Companies hold the purse strings, and the uneven power dynamic could prompt them to use a heavy-handed, disrespectful approach with nonprofits when disagreements arise. An uneven power balance can create ethical issues for both nonprofits and companies.

Companies are accused of choosing only the most attractive, popular, marketable causes for cause-related marketing—a practice known as cherry-picking. Breast cancer is a classic example of an attractive cause. Many affluent people are affected by it or concerned about it, so it is salient and likely to attract media coverage. Its incidence is high, and women without a family history can contract it, so many people feel potentially vulnerable to it. It is not associated with any social sins. If it is detected early and treated, people often recover from it, so it lends itself to positive messages. Problems occur when the importance of a cause often is not correlated with its attractiveness and popularity. Initially, this was the case for AIDS, which had the potential to create an epidemic but was associated with some groups that were viewed unfavorably at the time. Causes like domestic abuse and date rape make some people feel uncomfortable and are rarely the focus of cause-related marketing. The concern is that cause-related marketing creates or exacerbates a “market for causes,” in which causes receive support based on popularity rather than need. Marketers should consider the urgency and need of causes in selecting a focus for cause-related marketing. In as much as the cause marketplace becomes cluttered with popular causes, there can be some benefits related to breaking through the clutter by focusing on less popular causes.

Companies have long been accused of spending too much on marketing and donating too little to the cause. For example, American Express was criticized for spending several times more on the media than it donated to the Statue of Liberty’s renovation. As another example, Yoplait caps its donation to breast cancer at $350,000, which is no doubt significantly less than its marketing budget. Critics argue that a lopsided advertising-to-donation ratio is unethical, while companies assert that the question is not how much they donate but whether the cause will benefit at all from their marketing budget.

As pressures for increased corporate social responsibility mount, cause-related marketing is likely to continue to be a useful part of the repertoire of marketing strategies and tactics. To be effective, it must be practiced with sophistication, and marketers should be aware of its potential ethical challenges and work to mitigate them. Done well, cause-related marketing has the potential of creating a “win-win-win-win” outcome, providing compelling benefits for companies, consumers, nonprofits, and society at large.