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Bono targets HIV in Africa with licensing deals
His Product Red joins with companies to market to 'conscience consumers.' The proceeds go to combat AIDS and its effects.
By Alan Beattie
The fifth-floor restaurant at the Harvey Nichols store in London's Knightsbridge is pulsating. Arriving guests run a flashing, shouting gantlet of paparazzi. Inside, the scene is straight out of "The Devil Wears Prada" — impossibly slim women clutching cocktails and men with expensively distressed hair bearing champagne flutes. Actor Pierce Brosnan can be glimpsed in the crowd. The party leads the London Evening Standard's social diary column the next day. It all seems a long way from Africa.
The gathering launched a small line of African-made clothing owned by Bono, the ubiquitous campaigning rock star. Helping Africa is a long-standing preoccupation for Bono, which is why he has recruited far bigger companies and brands than his own to the cause. Product Red, announced a year ago at the World Economic Forum at Davos, Switzerland, is seeking a commercial solution to the humanitarian disaster of AIDS in Africa.
In its first year, Red has provided ammunition for both optimists and those skeptical that the rich can consume their way to a better world for the poor. But after a stuttering British start, Red's U.S. incarnation jumped out of the gates. The first Red-donated money has started flowing to Africa — $5.25 million has gone to Rwanda and $4 million to Swaziland — to treat HIV-positive Africans and to provide care for AIDS orphans. The fund has put 800,000 people in the developing world on antiretroviral drugs and is aiming to at least double that this year.
Red works simply. Its trademark, a pair of red parentheses symbolizing the embrace of solidarity, is licensed to partner companies that use it on specific products. In return, the partners donate some of the revenue or profit to the Geneva-based Global Fund to Fight AIDS, Tuberculosis and Malaria — launched in 2002 to combat the diseases in the developing world — and pay a fee to Red to cover marketing and administration. Red is the color of emergency and alarm, fitting for the humanitarian disaster of more than 2 million African deaths a year from AIDS.
By last year's launch, Red had deals with Gap Inc., Giorgio Armani, American Express Co., Converse Inc. (owned by Nike Inc.) and Motorola Inc. Since then, it has added Apple Inc., which launched a Red iPod Nano in October.
Red is a limited-liability company owned by Bono and Bobby Shriver, the chief executive. Shriver, a Californian, is a nephew of President Kennedy. His mother, Eunice Kennedy Shriver, founded the Special Olympics. His sister, Maria, is a former NBC News anchor and is married to Gov. Arnold Schwarzenegger.
Red's manifesto reflects Shriver's guiding principle: "Red is not a charity. It is simply a business model. You buy the Red stuff. We buy the pills and distribute them…. It's easy. All you have to do is upgrade your choice."
But Shriver says that Red, like many start-ups, was "wildly undercapitalized and wildly understaffed." It spent less than $1 million in advertising last year's launch. Even now, Red has a staff of only nine.
The donation agreements, which typically run for several years, are negotiated separately with each partner. American Express, for example, donates at least 1% of what consumers spend using its Red credit card. Gap hands over half the profit from its Red clothes. Red has to balance maximizing donations with allowing its partners enough profit to make it worthwhile. To prevent the brand from being diluted, only one company in each sector (clothing lines, cellphones, credit cards) is allowed to use the Red brand.
For all its fanfare, Red's model of tying a good cause to a product, known in the business as "cause-related marketing," is fairly familiar.
Unlike with other so-called ethical consumer brands and marks such as Fairtrade, the manufacture of the products is not a major concern. The Global Fund receives the donations directly. Apart from arranging the deals with the companies, Red just helps to market and direct the brand.
Matthew Freud, a British public-relations baron whose company has worked extensively on Red, says: "It is licensing nothing but a powerful idea. It is selling to brands the equity they can gain by becoming linked to the idea."
The halo effect for a company involved in battling AIDS would appear to make Red an easy sell. But Shriver says companies were slow to sign up. Apart from concern over being criticized for making money from AIDS, businesses that rely on the value of their brands want to maintain control of them. Adopting a multi-company trademark such as Red exposes the partners to any bad publicity throughout the Red family.
The number of shoppers prepared to make purchase decisions based on association with good causes appears to be growing. American Express undertakes regular phone surveys showing that in Britain there are 1.9 million "conscience consumers," those who are prepared to use their buying power to achieve wider social or environmental change. It estimates that the number will grow to 4 million by 2009.
"It looks as much of a mind-set as a demographic," said John Hayes, American Express' chief marketing officer. And because it is a growing one, "if we don't go and salute those people with a product meeting their needs, someone else probably will."
http://www.latimes.com/business/la-ft-bono5feb05,1,80435.story?track=rss
His Product Red joins with companies to market to 'conscience consumers.' The proceeds go to combat AIDS and its effects.
By Alan Beattie
The fifth-floor restaurant at the Harvey Nichols store in London's Knightsbridge is pulsating. Arriving guests run a flashing, shouting gantlet of paparazzi. Inside, the scene is straight out of "The Devil Wears Prada" — impossibly slim women clutching cocktails and men with expensively distressed hair bearing champagne flutes. Actor Pierce Brosnan can be glimpsed in the crowd. The party leads the London Evening Standard's social diary column the next day. It all seems a long way from Africa.
The gathering launched a small line of African-made clothing owned by Bono, the ubiquitous campaigning rock star. Helping Africa is a long-standing preoccupation for Bono, which is why he has recruited far bigger companies and brands than his own to the cause. Product Red, announced a year ago at the World Economic Forum at Davos, Switzerland, is seeking a commercial solution to the humanitarian disaster of AIDS in Africa.
In its first year, Red has provided ammunition for both optimists and those skeptical that the rich can consume their way to a better world for the poor. But after a stuttering British start, Red's U.S. incarnation jumped out of the gates. The first Red-donated money has started flowing to Africa — $5.25 million has gone to Rwanda and $4 million to Swaziland — to treat HIV-positive Africans and to provide care for AIDS orphans. The fund has put 800,000 people in the developing world on antiretroviral drugs and is aiming to at least double that this year.
Red works simply. Its trademark, a pair of red parentheses symbolizing the embrace of solidarity, is licensed to partner companies that use it on specific products. In return, the partners donate some of the revenue or profit to the Geneva-based Global Fund to Fight AIDS, Tuberculosis and Malaria — launched in 2002 to combat the diseases in the developing world — and pay a fee to Red to cover marketing and administration. Red is the color of emergency and alarm, fitting for the humanitarian disaster of more than 2 million African deaths a year from AIDS.
By last year's launch, Red had deals with Gap Inc., Giorgio Armani, American Express Co., Converse Inc. (owned by Nike Inc.) and Motorola Inc. Since then, it has added Apple Inc., which launched a Red iPod Nano in October.
Red is a limited-liability company owned by Bono and Bobby Shriver, the chief executive. Shriver, a Californian, is a nephew of President Kennedy. His mother, Eunice Kennedy Shriver, founded the Special Olympics. His sister, Maria, is a former NBC News anchor and is married to Gov. Arnold Schwarzenegger.
Red's manifesto reflects Shriver's guiding principle: "Red is not a charity. It is simply a business model. You buy the Red stuff. We buy the pills and distribute them…. It's easy. All you have to do is upgrade your choice."
But Shriver says that Red, like many start-ups, was "wildly undercapitalized and wildly understaffed." It spent less than $1 million in advertising last year's launch. Even now, Red has a staff of only nine.
The donation agreements, which typically run for several years, are negotiated separately with each partner. American Express, for example, donates at least 1% of what consumers spend using its Red credit card. Gap hands over half the profit from its Red clothes. Red has to balance maximizing donations with allowing its partners enough profit to make it worthwhile. To prevent the brand from being diluted, only one company in each sector (clothing lines, cellphones, credit cards) is allowed to use the Red brand.
For all its fanfare, Red's model of tying a good cause to a product, known in the business as "cause-related marketing," is fairly familiar.
Unlike with other so-called ethical consumer brands and marks such as Fairtrade, the manufacture of the products is not a major concern. The Global Fund receives the donations directly. Apart from arranging the deals with the companies, Red just helps to market and direct the brand.
Matthew Freud, a British public-relations baron whose company has worked extensively on Red, says: "It is licensing nothing but a powerful idea. It is selling to brands the equity they can gain by becoming linked to the idea."
The halo effect for a company involved in battling AIDS would appear to make Red an easy sell. But Shriver says companies were slow to sign up. Apart from concern over being criticized for making money from AIDS, businesses that rely on the value of their brands want to maintain control of them. Adopting a multi-company trademark such as Red exposes the partners to any bad publicity throughout the Red family.
The number of shoppers prepared to make purchase decisions based on association with good causes appears to be growing. American Express undertakes regular phone surveys showing that in Britain there are 1.9 million "conscience consumers," those who are prepared to use their buying power to achieve wider social or environmental change. It estimates that the number will grow to 4 million by 2009.
"It looks as much of a mind-set as a demographic," said John Hayes, American Express' chief marketing officer. And because it is a growing one, "if we don't go and salute those people with a product meeting their needs, someone else probably will."
http://www.latimes.com/business/la-ft-bono5feb05,1,80435.story?track=rss
