You might be familiar with the (RED) campaign through the (RED) iPod, the (RED) AmEx card, the MotoRazr V3m (Red) cell phone or the (RED) clothing sold at the Gap. While the (RED) campaign has raised $25 million for the Global Fund (which grants money to fight diseases such as AIDS), it is being criticized for the millions more its partners have spent on advertising. An article in AdAge said that $100 million has been spent on marketing (RED) products. An article in The Christian Science Monitor contends that number is actually lower and the person citing that number in AdAge was only making an educated guess. My first question to you is: Why don't these corporate partners just take that $100 million (or whatever it is) and donate it directly to the Global Fund?
The campaign has also been criticized for its lack of transparency. The transparency issue focuses on certain marketers not being clear about what is actually being contributed to the cause. The Gap says that half of the profits for the sale of (RED) clothing is contributed but is cagey about how that profit is calculated. Several salespeople interviewed for the Christian Science article said that they thought half the sales price was donated. While the Gap is doing a tremendous effort to fight AIDS in Africa, some have suggested that salespeople be more informed at the point of purchase. My second question to you is: How important is it for you as a consumer to know how much of the purchase price of your item is being donated to a cause?
For more information about the campaign, click below:
joinred.com
To read the article from the Christian Science Monitor, click below:
Christian Science Monitor article
Tuesday, April 03, 2007
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3 comments:
As far as marketing goes, if you look at the companies supporting this, they are already organizations with very large advertising budgets. The real question would be, did they increase their ad budgets by $100 million or are they using ad space they would have still been using for the company otherwise. If Gap decided to stop running their normal clothing campaigns and blitz this instead, then I don't see anything wrong with that. In fact, it's even more of a donation. However, if they increased their ad budget by millions just to market this, then I could see how the argument is legit. To take $100 million worth of normal ad money and donate it would cost the company more than $100 million because they would also lose the revenue they gain from the results of their ads.
From Savannah Harmon:
I think that a certain about of money needs to be spent on advertising. And in the case of the product(red) campaign, the cooler and more hip they can make the product look to customers, the more money they will raise. In order to sell the product, people have to know about it and know why it's important to buy this red shirt or cell phone or whatever, versus another one that doesn't benefit a cause. They've spent a lot of money advertising, but in return people have learned about the cause and the campaign and have wanted to be involved. Yes, these companies could just donate money, but this way they make the people involved in helping out, and make helping out a good cause trendy and fun. And of course, this way, they make a profit, which may sound selfish in the light of a cause such as AIDS, but they run a business, too. I think it's great they can make trendy items help the world while making money.
I don't feel the corporate partners involved in the RED campaign are doing anything wrong in relevance to their advertising budgets. The RED campaign has actually raised $25 million in six months in the U.S. not the $18 million Ad age claimed. This is 5X the amount given in the previous four years!! The total spending on advertisintg was a third that $100million Ad age claimed. The biggest spender was GAP with $7.8 mill. Existing marketing money was used to raise awareness for the campaigns-this was well publicized in the U.K. but NOT in the U.S!!
The advertising is neccessary, most people would NOT hand out the money they spend on a RED razor directly to a charity!! Sad but true. I DO think it is very important as a consumer to know how much of my money is going to the cause I wish to support. Overall I feel the campaign has been a huge success!!
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