WSJ: Cause-Tied Marketing Requires Care

By Emily Steel, Wall Street Journal

From a Lady Gaga prayer bracelet to special sushi rolls at restaurants, the disaster in Japan has led to a rash of relief efforts.

But as consumers become increasingly skeptical of cause-related marketing, celebrities, organizations and major marketers have to walk a fine line, trying to help without appearing to exploit the tragedy for profits.

“Companies have an opportunity in this crisis to show that they care. Customers want that,” says Dean Crutchfield, an independent branding consultant. “But to take something as sensitive as a crisis and combine it with a brand message is a volatile situation that easily could explode.”

Microsoft /quotes/comstock/15*!msft/quotes/nls/msft (MSFT 24.80, +0.02, +0.08%) Corp.’s Bing learned that lesson early on. The search engine created a backlash when it posted a message on Twitter, offering to donate $1 to Japan’s relief efforts each time someone forwarded its message.

The missive set off a firestorm of complaints from Twitter users, who accused Bing of using the tragedy as a marketing opportunity. Within hours, the company responded. “We apologize the tweet was negatively perceived. Intent was to provide an easy way for people to help Japan. We have donated $100,000.”

A spokeswoman for Microsoft, which made an initial commitment of $2 million, added: “The last thing we want is for this to distract from [the broader] effort.”

Companies have stepped up their sponsorship of causes in recent years and are often quick to jump into a crisis. Research suggests that consumers are more likely to support companies that are making a difference in the world, but consumers are growing wary of the motives.

“People can see through it today,” says Allen Adamson, managing director at WPP /quotes/comstock/15*!wppg.y/quotes/nls/wppgy (WPPGY 61.40, +1.05, +1.74%) PLC’s branding firm, Landor Associates. “If a company can’t do something substantial and real, it is better to do nothing than doing something and trying to get credit.”

Marketers have to be especially careful when they create programs that commit them to donate a portion of their proceeds if someone makes a purchase, some ad executives say.

“Anything short of, ‘We are giving a product, we are giving cash, over and out,’ gets into a gray area,” says marketing consultant Jim Stengel.

Still, several retailers are deploying this strategy. Cash For Gold USA, which buys gold jewelry from consumers, said it would donate 10% of its profits to relief efforts in Japan, “Cash for Gold USA urges Americans and Canadians to send in their gold, silver and diamonds so that they can get paid for their items while also doing something good by providing financial relief to the Japanese,”the company said on its website.

U.S. sushi chain SushiSamba said that through the end of March it will give 100% of the proceeds of a special $12 sushi roll to relief efforts.

Retailer Forever 21 is donating the proceeds from sales on its website March 18 to help Japan. Designer Phillip Lim is holding a sample sale in New York next week, with proceeds benefiting the American Red Cross. Jewelry designer Alexis Bittar will donate 100% of the proceeds from his site this week to the Catholic Relief Fund, as well as all of the proceeds from his store sales on Thursday. And retailer Gorjana is giving 100% of its retail sales last Friday to children’s relief efforts in a drive called “Shop to Benefit.”

Other marketers are giving their customers benefits in exchange for making donations. AMR /quotes/comstock/13*!amr/quotes/nls/amr (AMR 6.60, +0.25, +3.94%) Corp.’s American Airlines and United Continental Holdings /quotes/comstock/13*!ual/quotes/nls/ual (UAL 23.37, +1.20, +5.41%) Inc.’s Continental Airlines said they would reward donors with bonus airline miles.

Many companies have chosen to stick to straight donations, instead. Wal-Mart Corp., Procter & Gamble /quotes/comstock/13*!pg/quotes/nls/pg (PG 60.60, +0.17, +0.28%) Co., Coca-Cola Corp. and Walt Disney /quotes/comstock/13*!dis/quotes/nls/dis (DIS 41.23, +0.47, +1.15%) Co. are among more than 100 corporations across the globe that have committed to donate a total of more than $151 million in cash and other products or services thus far, according to the Business Civic Leadership Center, an affiliate of the U.S. Chamber of Commerce. The business response ranks among the top five for international disasters, the center says.

Marketers are promoting the initiatives through public relations, their own websites and social networking. While companies often want consumers to know about their efforts, few are launching ad campaigns to avoid any criticism of their intentions.

As relief efforts continue, companies’ motives are likely to be less altruistic, ad experts say. “The first people that do it probably have their heart and head in the right place,” Mr. Adamson says. “But as you go further along, more people try to jump on the band wagon. Doing good becomes less substantial and more of an attention grab.”

Author: Dean Crutchfield

Builds Brands and Fixes Them When Broken

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