(03-04-2007) Costly Red Campaign Reaps Meager $18 Million - AdAge*

[HelloAngel]

Costly Red Campaign Reaps Meager $18 Million

Bono & Co. Spend up to $100 Million on Marketing, Incur Watchdogs' Wrath


By Mya Frazier


COLUMBUS, Ohio (AdAge.com) -- It's been a year since the first Red T-shirts hit Gap shelves in London, and a parade of celebrity-splashed events has followed: Steven Spielberg smiling down from billboards in San Francisco; Christy Turlington striking a yoga pose in a New Yorker ad; Bono cruising Chicago's Michigan Avenue with Oprah Winfrey, eagerly snapping up Red products; Chris Rock appearing in Motorola TV spots ("Use Red, nobody's dead"); and the Red room at the Grammy Awards. So you'd expect the money raised to be, well, big, right? Maybe $50 million, or even $100 million.

Just $18 million
Try again: The tally raised worldwide is $18 million.

The disproportionate ratio between the marketing outlay and the money raised is drawing concern among nonprofit watchdogs, cause-marketing experts and even executives in the ad business. It threatens to spur a backlash, not just against the Red campaign -- which ambitiously set out to change the cause-marketing model by allowing partners to profit from charity -- but also for the brands involved.

Enormous outlay
By any measure, the buzz has been extraordinary and the collective marketing outlay by Gap, Apple and Motorola has been enormous, with some estimates as high as $100 million. Gap alone spent $7.8 million of its $58 million outlay on Red during last year's fourth quarter, according to Nielsen Media Research's Nielsen Adviews.

But contributions don't seem to be living up to the hype. Richard Feachem, executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, the recipient of money raised by Red, told The Boston Globe in December, "We may be over the $100 million mark by the end of Christmas."

Rajesh Anandan, the Global Fund's head of private-sector partnerships, said Mr. Feachem was misquoted, and defended the efforts by Red to increase the Global Fund's private-sector donations, which totaled just $5 million from 2002 to 2005. (The U.S. Congress just approved a $724 million pledge to the Global Fund, on top of $1.9 billion already given and $650 million from the Bill & Melinda Gates Foundation.)

'Hugely frontloaded'
"Red has done as much as we could have hoped for in the short time it has been up and running," he said, adding: "The launch cost of this kind of campaign is going to be hugely frontloaded. It's a very costly exercise."

Julie Cordua, VP-marketing at Red and a former Motorola marketing exec and director-buzz marketing at Helio, said the outlay by the program's partners must be understood within the context of the campaign's goal: sustainability. "It's not a charity program of them writing a one-time check. It has to make good business sense for the company so the money will continue to flow to the Global Fund over time." She added that since many of Red's partners haven't closed their books yet on 2006, more funds likely will be added to the $18 million.

But is the rise of philanthropic fashionistas decked out in Red T-shirts and iPods really the best way to save a child dying of AIDS in Africa?

Parody mocks Bono
The campaign's inherent appeal to conspicuous consumption has spurred a parody by a group of San Francisco designers and artists, who take issue with Bono's rallying cry. "Shopping is not a solution. Buy less. Give more," is the message at buylesscrap.org, which encourages people to give directly to the Global Fund.

"The Red campaign proposes consumption as the cure to the world's evils," said Ben Davis, creative director at Word Pictures Ideas, co-creator of the site. "Can't we just focus on the real solution -- giving money?"

Trent Stamp, president of Charity Navigator, which rates the spending practices of 5,000 nonprofits, said he's concerned about the campaign's impact on the next generation. "The Red campaign can be a good start or it can be a colossal waste of money, and it all depends on whether this edgy, innovative campaign inspires young people to be better citizens or just gives them an excuse to feel good about themselves while they buy an overpriced item they don't really need."

Fears of nonprofits
Mark Rosenman, a longtime activist in the nonprofit sector and a public-service professor at the Union Institute & University in Cincinnati, said the disparity between the marketing outlay and the money raised by Red is illustrative of some of the biggest fears of nonprofits in the U.S.

"There is a broadening concern that business is taking on the patina of philanthropy and crowding out philanthropic activity and even substituting for it," he said. "It benefits the for-profit partners much more than the charitable causes."


http://adage.com/article?article_id=115287

 

[u2girlcj]

I work in branding and marketing and I find this article to be just plain bad journalism.

Product (RED) is an option for people who want to DO something with the way they spend.

Would it be wonderful if I never bought anything again and gave all my income to the Global Fund?

Would it be wonderful if companies stopped spending money on advertising and instead gave all that money to the Global Fund?

Sure, but how unrealistic can you get? What is wrong with working the system we have?

Without the RED campaign, This $100 million would be spent on advertising anyway; the products would have been made, marketed, and bought regardless; but no one would have heard the message. And the message is powerful. Having the option to vote with your pocketbook is powerful. Shame on people who try to belittle it in favor of some unrealistic pipe dream.

Bottom line: Here is $18 million that wouldn't have been given to the GLobal Fund without the Product (RED) campaign. What cannot be quantified is the power of informing people and spreading the word.

I just can't look at Adage with any respect anymore. Sad.

 

[indra]

There is a discussion on another board I post on about picking a memorable web addy which is also descriptive of the website's purpose. buylesscrap.org is perfect!


As for the article, I do think the Red campaign does give people "an excuse to feel good about themselves while they buy an overpriced item they don't really need." I know the people pushing it will say that people are going to buy anyway so why not get something good from it, but encouraging rampant consumerism isn't responsible behaviour no matter how much it's dressed up as helping AIDS sufferers.

 

[V Nura]

the thing I'm wondering is

building a new brand is expensive. And I'm guessing building a "super brand" if you will across brands is even more so.

Is this ratio that we see 18/100 a function of trying to do something that is in fact very expensive. Or is there an underlying issue that is in fact going to threaten the sustainability of the (RED) brand.

I've actually wondered how sustainable the effort will be I guess time will tell

 

[u2girlcj]

the thing I'm wondering is

Is this model for Product (RED) going to be sustainable?

I think this is a much more interesting question and one I wish was addressed in an otherwise simplistic article.

From what I've read, even Bobby Shriver and Bono were surprised by the level of promotion given to RED products by Sprint and Gap. I wonder how long these companies will keep up this level.

Right now it is a competitive advantage to be part of something better - whether your product is green, sustainable, organic, local, fair trade, priced to benefit a charity/fund/organization, etc. I think the hope with RED and others, is that it will someday soon become the common practice and not the exception to the rule.

 

[JCOSTER]

Most of the time you don't see any monies from a new venture until 5 years later which Product (RED) will be around for.

And besides, there is no small change.

 

[mama cass]

how much gets donated to the Global Fund again? is it 10%?

 

[JCOSTER]

Each company is different.

 

[gvox]

I think that the article raises interesting questions, but I never got the impression that Red was supposed to be in substitute for or replace the good work and philanthropy that people might already be doing.

It actually is in principle with what the One campaign says: not necessarily giving more per se, but more of what we are already spending going to something that matters.

IE - less of our tax dollars to military spending, more to aid....if you're going to buy a cell phone anyways, why not make it a Red phone. When you walk into GAP, buy the Red t instead of the other one...

To me the Red campaign is about smart choices that result in helping others...if the writer of the article (or anyone else ie the consumer) thinks that the campaign is meant to be the only thing we support, they likely got the wrong idea in the first place? People definitely shouldn't feel that all they need to do is buy a t-shirt, I never got that impression that that's what Bono was trying to say anyways.

 

[doctorwho]

There is a discussion on another board I post on about picking a memorable web addy which is also descriptive of the website's purpose. buylesscrap.org is perfect!


As for the article, I do think the Red campaign does give people "an excuse to feel good about themselves while they buy an overpriced item they don't really need." I know the people pushing it will say that people are going to buy anyway so why not get something good from it, but encouraging rampant consumerism isn't responsible behaviour no matter how much it's dressed up as helping AIDS sufferers.

I'm very disappointed with this reply. It is discouraging that both you and sites like buylesscrap.org are completely missing the entire goal of the RED product line. And because of this negativity and misinformation, there may be a backlash against what is a very noble cause.

It's easy to dismiss the $18M raised, when viewed at how much was spent on marketing. It's easy to say how we should all buy less and donate more. But not only is this incorrect thinking, it's wildly hypocrticial. For example, one needs a computer to even look at buylesscrap.org. Oh oh - who's gonna buy that? And let's not forget the fact that this website will also need a server, the necessary software and a designer. More things to buy! And from all those purchases, how much is going to charity? Most likely none.

The goal of the RED product line is to give consumers a choice. One shouldn't just rush out and buy a RED item if they don't need it. But if one does need a new iPod or phone or T-shirt, etc., RED gives the consumer a choice. For example, if one wants a new iPod nano, one could buy a regular one for $249 or one could buy a RED one for $249 (the same price), but see money go to charity. I haven't bought any RED items simply because I don't need them. But if I did, I hope to have the option of buying from the RED line.

What's also missing is the amount that companies are donating. Using the iPod example I gave, only $10 of that $249 is going to charity. It's not as if Apple is suddenly donating half the gross (or even half the profits). I'm sure the percentage donated from other companies is similar. But all of these donations add up - so far to $18M. Consumers still would have bought iPods and phones and T-shirts, etc., regardless of the RED campaign. But because of RED, now they bought these items *and* money was given to charity. And that's the goal.

Was the initial marketing lauch expensive? You bet - as it is for EVERY SINGLE PRODUCT OUT THERE! A single movie may spend $50-100M just in marketing! This is for a movie that plays in theaters for maybe 3 months. In contrast, the RED campaign may last for years. And the marketing cost will be dramatically reduced as time goes on, so the profits will be even greater.

So while we shouldn't just "buy more crap", if we are going to purchase, purchase smart. RED gives us that option.

 

[Lila64]

well said!

 

[Jamila]

I bet the people in Africa whose lives are being improved through this $18 million would consider this amount "meager".


I agree - this is shoddy journalism and seems to be full of all sorts of built-in preconceptions about (RED) that it is trying to "prove".

 

[Jamila]

I bet the people in Africa whose lives are being improved through this $18 million would not consider this amount "meager".


That's what I meant to say.

 

[BigMacPhisto]

Re



You apologists are pretty blinded by U2/Bono.....it's rampant consumerism (as a result of capitalism) that's led to the huge wealth gap....putting money back into the system that causes poverty doesn't make one iota of sense. Bono and Co. have good hearts, but they tried something new that obviously wasn't worth trying. Make appeals for donations, not iPods.

 

[hotpepper]

To what Lila, Jamila and Dr. Who said.

^^ditto^^

 

[zooperson]

i was under the impression that product (RED) was a five year plan.

 

[Nomad_79]

Re: Re

You apologists are pretty blinded by U2/Bono.....it's rampant consumerism (as a result of capitalism) that's led to the huge wealth gap....putting money back into the system that causes poverty doesn't make one iota of sense. Bono and Co. have good hearts, but they tried something new that obviously wasn't worth trying. Make appeals for donations, not iPods.

First let me say that I pretty much know (based on your post) that you are going to disagree ferociously with the following statement, and I respect your right to do that. No offense intended.

Despite claims that capitalism causes poverty, there is a huge correlation between capitalism and countries that have been lifted out of poverty. Communism...not so much. So I tend to disagree with the idea that the evils of the free market are to blame for Africa.

 

[ntalwar]

Was the initial marketing lauch expensive? You bet - as it is for EVERY SINGLE PRODUCT OUT THERE! A single movie may spend $50-100M just in marketing! This is for a movie that plays in theaters for maybe 3 months. In contrast, the RED campaign may last for years. And the marketing cost will be dramatically reduced as time goes on, so the profits will be even greater.

The RED campaign also has a risk of slowly fizzling out like a movie. Gap clothes that look cool to fickle consumers today could lose appeal as they become less "trendy" in a year or two.

 

[Carek1230]

I feel the prices should have been re-adjusted. Either more of a percentage going to the RED campaign, or lower the prices to consumers. I couldn't afford most of those items due to the prices alone, irregardless of the cause!

 

[indra]

I'm very disappointed with this reply.

Despite your disappointment I stand by what I said. We do need to buy less crap (the vast majority of people in the US for example can't really afford to but the crap they are buying now), and put more into both personal savings and into direct donations. RED certainly isn't the only product line to push rampant consumerism, but it does push the "if you buy this t-shirt you've done your part" attitude.

I also really do think that programs such as RED will hurt both government level and non profit aid/development programs because many people will figure since they have already "given" at the store they don't need to give anything directly to non profits and they don't need to encourage their governments to give.

I think it seems like a good idea but isn't.

 

[last unicorn]

I think it's sad that there are always people who are trying to bring a good concept down.
I have always felt that (Red) was launched to bring social responsibility to large companies. This is where the money is. And I don't think that it can be said by now if (Red) will be a "success" or not. Every life saved is a success. And there have been several reports that there has indeed been a lot of money donated to the Global Fund because of (Red). I think it just needs some time.
And capitalism isn't wrong per se. It's only wrong when it excludes a huge part of the world. And last time I checked it was Bono who said that trade is so much more important to Africa than anything else.

 

[Anu]

And capitalism isn't wrong per se. It's only wrong when it excludes a huge part of the world. And last time I checked it was Bono who said that trade is so much more important to Africa than anything else.

Perhaps, just maybe, perhaps, please G-d, the failure of this campaign *as a model* will get Bono and his ilk in terms of economic philosophy to go back to private philanthropy or even the Warren B. model instead of the hype (that is) RED.

Love the buylesscrap site. Excellent anti-marketing. I'm sure Bono loves it, anyway, it's so ZooTV.

 

[last unicorn]

I can't believe some people feel triumphant about the idea that (Red) could be a failure (which I believe it isn't).
This is about saving lives, not about fitting into people's personal concepts of what charity should look like.
Bono does what he can and feels is right, while other people may have different ideas about "philanthropy". Bono has always been more interested in trade and the business side of things. He is smart. I am sure he will do everything to make this campaign a success.

 

[Vincent Vega]

You apologists are pretty blinded by U2/Bono.....it's rampant consumerism (as a result of capitalism) that's led to the huge wealth gap....putting money back into the system that causes poverty doesn't make one iota of sense. Bono and Co. have good hearts, but they tried something new that obviously wasn't worth trying. Make appeals for donations, not iPods.

Hm, the article said that in three years (2002-2005) only $5 million were donated to the Global Fund.

Now, $18 million were raised within one year.


They don't make it mandatory to buy a Product (Red) item to give money to the Global Fund.
You still can give yourself if you want.
You can buy a normal iPod as well, if you don't want the (Red) iPod.

This article just ignores all principles and standrards of journalism. It's a commentary, but not an article.

I don't know th author, but his knowledge of business investments seems to be pretty tiny.

 

[Ralphie]

Hm, the article said that in three years (2002-2005) only $5 million were donated to the Global Fund.

Now, $18 million were raised within one year.

That's a great point. I think those numbers speak for themselves.

Also...I understand some people's concern that RED could detract from private donations, as people could think they've already 'done their part' in buying a RED product. I don't agree with this argument, however, because in my mind it breaks down differently when you look at the groups of people involved. A person who is taking the initiative to donate their own money, not through taxes but privately, to the Global Fund or a charity that helps Africa, is not likely the type who would go with the 'I bought a tee shirt, now I'm done!' idea. If people are taking steps to set up private donations and are willing to give a part of their salary to these groups then odds are they're a bit more informed than that. On the other hand, I think RED reaches a group of consumers who might not have donated under normal circumstances but will when they can make it a part of their usual routine, i.e., shopping.

 

[drumkeeran]

Hmmm

Choice, freedom, hope ... celebrating the positiveness of our daily culture which we certainly take for granted.

$5MM over four years vs. $18MM in one year WOW!!!

I don't know where the negative is in this. Debate usually increases awareness, so, by all means go for it.

I know that I feel good about my choices to give in all sorts of ways - time, money, consumerism. I teach my kids about sharing and have used the RED and ONE campaigns to show them how to use daily activities to help others - anything wrong with that?? I chose to live in a capitalist society that uses commerce as a driver to do quite a bit of good and I am thrilled that the US, through both individuals and government funds, has chosen to help those less fortunate who desperately need this help through the Global Fund.

My two cents

I also found this article to be a bit much, since I take it personally when I've contributed some money for those GAP t-shirts DESI(RED) INSPI(RED) and a couple of RED bracelets (my kids' school mascot is a red raider). I enjoy wearing clothes and actually think of who made them when I buy them. Thanks for my choice.

 

[kellyahern]

Hm, the article said that in three years (2002-2005) only $5 million were donated to the Global Fund.

Now, $18 million were raised within one year.

Good point.

 

[Anu]

For those of us whom capitalism is either a religion or a necessary evil, capitalism can save us from the evils that capitalism has created.

That's the rap that Bono and Bill Gates want us to buy, drowning in white guilt and the money that they've made for themselves.

Bono, at least, messianic maneuvers aside, seems somewhat conscious of his own contradiction.

 

[Anu]

Hmmm

I teach my kids about sharing and have used the RED and ONE campaigns to show them how to use daily activities to help others - anything wrong with that?? I chose to live in a capitalist society that uses commerce as a driver to do quite a bit of good and I am thrilled that the US, through both individuals and government funds, has chosen to help those less fortunate who desperately need this help through the Global Fund.

I have a ONE bracelet and a RED t-shirt, and I have NO PROBLEM with people being happy and successful.

However, the naive and offensive idea that capitalism can save us from the crimes of capitalism turns my stomach.

Jesus was anticapitalist. Gandhi and King were anticapitalist. Bono wants to work in that tradition of faith and social justice and he is a walking social injustice, as are GAP and Microsoft.

Moreover, we did not 'choose' capitalism as the global economic order. We were born into it, all of us. It's just the postmodern feudalism. Slavery with a new face.

 

[Ralphie]

Jesus was anticapitalist.

I hope I'm not opening a huge can of worms here but...you've piqued my curiousity. Can you tell me what Bible verse/verses this idea is based on?