Under the Influence with Terry O'Reilly - S3E03 - Cause Marketing

Episode Date: January 19, 2014

Unlike public service announcements or corporate philanthropy, Cause Marketing is when a Not-For-Profit organization teams up with a For-Profit company to further a good cause – but the For-Profit partner makes a profit while helping. It’s a contentious strategy – as most people don’t like to hear the word “profit” in the same breath as “charity.” But this new marketing strategy depends on profit to survive.  We’ll tell the story of how Cause Marketing began in the 1980s, how Bono’s RED organization learned a hard lesson about cause marketing, and how several big corporations teamed up with worthy causes to make the world a better place. While making their balance sheets better at the same time. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling. Subscribe now and don't miss a single beat. We'll see you next time. new locations. What matters is that you have something there to adapt with you, whether you need a challenge or rest. And Peloton has everything you need, whenever you need it. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. From the Under the Influence digital box set, this episode is from Season 3, 2014. You're under the influence with Terry O'Reilly.

I just want to tell you all how happy I am to be back in the studio making a picture again. You don't know how much I've missed all of you. And I promise you I'll never desert you again. Because after Salome, we'll make another picture and another picture. You see, this is my life. It always will be. There's nothing else. Just us. And the cameras.

And those wonderful people out there in the dark. All right, Mr. DeMille, I'm ready for my close-up. The film was called Sunset Boulevard, named after the famous street that snakes its way through Hollywood. It was directed by Billy Wilder, written by Wilder and Charles Brackett. The picture was narrated by a dead man, played by William Holden, who tells us the story of the events leading up to his death.

The film was a dark look at the illusion of Hollywood, told from the vantage point of a struggling screenwriter and a faded silent film star who dreamed of an unlikely comeback. Wilder said he was inspired by the mansions of silent film stars he would drive by on his way to work. He wondered what kind of lives they led now that the, quote, parade had passed them by. Sunset Boulevard would eventually win three Academy Awards,

including Best Screenplay. It ranks number 12 on the American Film Institute's list of the 100 Greatest Films. The team of Billy Wilder and Charles Brackett was one of the most successful pairings in Hollywood history. Thrown together in 1938 to punch up a screenplay, the two had a knack for storytelling in no time at all they were writing producing and directing their

own projects creating 14 pictures between 1938 and 1950 including the major in the minor five graves to Cairo Affair, and the Oscar-winning Lost Weekend. They were often called the happiest couple in Hollywood. Yet, as with most successful partnerships, they were complete opposites. Wilder was an Austrian immigrant who learned English as a second language. He was a witty and confident Democrat with a short fuse and a healthy ego. Charles Brackett, on the other hand, was a calm, urbane Republican. Fourteen years Wilder's senior, Brackett was born in New York,

was a graduate of the Harvard Law School, and was a published novelist. Wilder was a claustrophobic who couldn't stand closed doors. Brackett was an agoraphobe who twitched when the door was left open. They were the very definition of polar opposites, and that was their magic. As Wilder once said, if two creative partners are too similar, with the same views, background, and politics,

it's like pulling on one end of a rope. What you needed, said Wilder, was tension. While many partnerships have been made up of opposites, like Lennon and McCartney and Wozniak and Jobs, the Brackett-Wilder partnership was a little more unusual. They simply didn't like each other. Wilder constantly yelled at Brackett, goading, criticizing,

taunting. Brackett would eventually explode and start hurling profanities at Wilder. When he ran out of curse words, he would throw heavy objects, like telephone books, inkstands, and waste baskets. That would just make Wilder, Wilder,

which would prompt Brackett to actually try to punch Wilder in the head. All the while, their loyal secretary, Helen Hernandez, would tremble outside their door, listening to the sound of ashtrays smashing against the wall. And that was the creative process for Wilder and Brackett, for virtually all their films. Those unlikely bedfellows, with seemingly nothing in common, not even friendship, produced some of Hollywood's most revered films together.

The world of marketing and advertising has its own story of unlikely bedfellows, the worlds of for-profit and not-for-profit organizations. Like Wilder and Brackett, there is a built-in tension between them, with many non-profits looking at corporations as money-hungry machines and corporations viewing non-profits as an endless line of charities looking for handouts. But, like Wilder and Brackett, there have also been some very successful partnerships between the two.

Partnerships where they join forces to achieve some remarkable things. With not-for-profits making the world a better place, and corporations helping them do it while still making a healthy profit. It's an unusual kind of

partnership. And it's called cause marketing. The term cause marketing is relatively new in the 100-plus year history of the advertising industry. The distinction between cause marketing and brand marketing is a simple one. Cause marketing is in the service of the public, and brand marketing is in the service of corporations. In other words, cause marketing seeks to make the world a better place, whereas brand marketing seeks to make the world a better place, whereas brand marketing seeks to make a profit. There is also a further, finer distinction that can be made.

Public service announcements, or PSAs, are also different from cause marketing. PSAs are messages that are meant to sell an idea that serves the public at large. Here is one of the most famous PSAs of all time. With a ranger's hat and shovel and a pair of dungarees You will find him in the forest always sniffing at the breeze People stop and pay attention when he tells them to beware

Cause everybody knows that he's the fire-preventing bear Smokey the Bear. Created way back in 1944, his original name was Smokey Herbert Bear. But when a famous tune was written about him, his middle name was changed to The to keep the song's rhythm. Smokey the Bear's job was to spread the word about forest fire prevention, and his slogan became famous. Remember, only you can prevent forest fires.

Here in Canada, the Canada Safety Council had a mascot named Elmer the Safety Elephant. In the past eight years, traffic accidents involving school children have dropped by more than half. One of the main reasons is Elmer, the safety elephant who never forgets. Created in 1947, Elmer gave traffic accident prevention tips to children. As an incentive, schools were given an Elmer the safety elephant flag to fly as long as they were accident free. Elmer had five traffic rules. Can you remember what his number one rule was? Look both ways before you cross the street.

Very good. But both Smokey the Bear and Elmer the Safety Elephant were PSAs, or public service announcements, generating awareness for topical social issues like health and safety. But cause marketing is a different animal. Defined simply, it's when a company goes to work for a cause. Cause marketing is when an unashamedly for-profit brand joins forces with an unequivocally good

non-profit organization for mutual benefit. And it's a fairly recent phenomenon the year was 1976 the Marriott Hotel Corporation was launching a big new 200 acre family theme park called Marriott's Great America in Santa Clara California Marriott wanted to attract as much attention as possible to the launch. So the company's PR man, Bruce Birch, had an idea. He wondered if partnering with a high-profile, non-profit organization might be the best rocket fuel.

So he interviewed over 20 charities, looking for one that had shared interests. He found it, and teamed Marriott's Great America theme park up with the March of Dimes. Marriott needed to figure out a way to attract families by generating maximum

PR and free media attention for the opening. The March of Dimes desperately needed to increase their fundraising by motivating the collection of pledges. Their problem was that while kids were generating money through pledge walks,

they weren't delivering those pledges by the deadline. So Birch, who many call the father of cause marketing, put the two needs together. He created a contest where the person or team who raised the most pledges for the March of Dimes by the deadline

would win a free trip to the opening of the new theme park in California for them and 100 of their friends. The contest was then rolled out to 67 cities throughout the western United States. Because the March of Dimes was so connected to kids, the resulting excitement generated by the contest spread through schools like wildfire. The hundreds of thousands of dollars of free publicity

the contest generated led to results for both the Marriott and the March of Dimes that were astonishing. First, the March of Dimes raised $2.5 million more than they had hoped for, which was 40% more than they had ever raised in their history. And the Marriott experienced a record-breaking opening attendance for their new complex and went on to attract over 2.2 million people in its first year, the biggest attendance for a regional park in history. Discover Marriott's Great America.

You haven't seen America till you've seen Marriott's Great America. But in the end, the key to that success was finding the right partnership alignment. The Marriott Park was a family entertainment center. The March of Dimes was an organization that helps improve the health of children.

And there was the number one rule for cause marketing. It must be an alignment of needs and goals for both the profit and non-profit organizations. By the way, the actual term cause marketing was coined in 1983.

Back then, American Express wanted to achieve two things, generate more use of its cards and sign up more customers. At the same time, the Statue of Liberty was in need of extensive repair and refurbishment. So, the company partnered with the Statue of Liberty Restoration Project and created a program where every American Express purchase triggered a donation of two cents and every new card member tripped a donation of one dollar. That money went to restore the statue. Now, you may wonder how that aligns with the goals of American Express.

First, Amex had a long history with the Statue of Liberty, dating back to 1885, when employees of the company gave money to build the pedestal for the famous landmark. When historic monuments, buildings, and parks are restored and maintained, it revitalizes neighborhoods, ignites tourism, and stimulates local economies. And when all that happens, American Express benefits directly. The result? In just four months, $2 million was raised for the Statue of Liberty restoration.

That the usage of their cards surged 28%. New card members exceeded expectations at 17%, and relations between Amex and their merchants greatly improved. It was a win-win scenario. Separate goals, mutual benefits, aligned needs. When asked by the press what the American Express Initiative was all about, they called it cause marketing. And the phrase stuck.

The category of cause marketing has grown substantially over the last 20 years. In 1990, the total spent on cause marketing in North America was $120 million. In 2013, it hit $1.78 billion. And while there was a time when corporations would donate funds to charities, that has given way to strategies that now ask for something in return. In many ways, true cause marketing isn't philanthropy. It's good business.

And we'll be right back. New year, new me. Season is here and honestly, we're already over it. Enter Felix, the healthcare company helping Canadians take a different approach to weight loss this year. Weight loss is more than just diet and exercise. It can be about tackling genetics, hormones, metabolism. Felix gets it.

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If you have any questions or concerns about your gambling or someone close to you, please contact Connex Ontario at 1-866-531-2600 to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with iGaming Ontario. If you're enjoying this episode, why not dip into our archives? Available wherever you download your pods. Go to terryoreilly.ca for a master episode list. In 1996, a non-profit organization called Kaboom decided on a mission to help children play. Research showed that today's children play less than any other generation

and this lack of physical play is closely linked to childhood obesity, Research showed that today's children play less than any other generation. And this lack of physical play is closely linked to childhood obesity, ADD, violence, and fragmented communities. So, Kaboom decided to build playgrounds. What they needed was a corporate partner who could bring funding and expertise. The Home Depot, meanwhile, was on a bold expansion strategy and was looking for a way to make an instant connection in new communities as they opened new stores. Kaboom served children and the Home Depot served communities. It was an alignment of needs, so they became partners.

Kaboom had an audacious plan to build 1,000 playgrounds in 1,000 days. As the saying goes, make no small plans, they hold no magic to stir men's blood. Not only was the Home Depot swept up by the plan, it invested $25 million, supplied materials and expertise, and nearly 100,000 Home Depot staff donated over 950,000 volunteer hours. As a result, Kaboom was able to reach their bold goal, and the 1,000th playground was built in 2008, impacting over 600,000 children. And the Home Depot was able to announce their entry into new communities by helping build playgrounds, and their staff felt the goodwill of working for a company that supports an important cause.

It was a synergistic meeting of needs. It's interesting to note that the visibility of cause marketing is also an important factor. According to a recent Nielsen Company study, 66% of us prefer to support companies that give back to society. And, according to the Cohn Millennial Cause Study, a cause will prompt over 60% of shoppers to try a product they've never heard of, and over 80% of us would switch from one brand to another brand of equal quality if it was associated with a good cause. That same study showed that almost 70% of people now prefer to work at companies that are considered socially responsible and are happier when active in company causes,

especially the millennial generation. The study also showed that the sizable uptick in positive sentiment around cause marketing had a very specific start date, 9-11. That infamous day has impacted so much of our lives, the least of which is air travel. It has profoundly changed how we think, how we act, how we expect corporations to act, and even how we shop.

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Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. Wanting to do something meaningful to stop the AIDS epidemic in Africa, U2 frontman Bono and his wife Ali started a for-profit fashion company called Eden. Eden, which is nude spelled backwards to suggest natural and the Garden of Eden, was founded on the premise of trade for aid to create jobs in Africa and alleviate poverty. The mission of the company was to raise awareness for the possibilities in Africa,

to source materials and craftsmanship, and to encourage the fashion community to do business there. But soon, Eden was struggling. And Mr. and Mrs. Bono learned the number one lesson about cause marketing the hard way. They had put the cause before the business. Joe Waters, a thoughtful guru when it comes to cause marketing, and whose website selfishgiving.com is highly recommended, believes the best way to help a cause is to be a great business first.

In other words, you can't bank on the cause to drive the business. You have to lead with an outstanding product or service. The quality of Bono's clothing line didn't measure up, and sales collapsed. Consumers were first interested in design and fit, then the social mission. We focused too much on the mission in the beginning, his wife said. But it's the clothes, it's the product, it's a fashion company.

That needs to be first and foremost. A smart cause marketing campaign has to lead with the products, not the cause. As Joe Waters goes on to say, many causepreneurs lead with the cause and think the waters will part. But the only place cause comes before product, marketing, social media, community and distribution is in the dictionary. You have to do the 100 other things well before cause comes into the picture. But when added,

cause makes everything better. So, Eden regrouped, realized it couldn't source everything out of Africa immediately, downsized the range of clothing it offered, and focused on the quality. A year later, Bono and partner Bobby Shriver took that learning and founded Product Red. The idea was innovative. Red would license its logo and brand to iconic companies like Nike, Apple, American Express, Starbucks, and Armani.

Those companies would create special merchandise that featured the color red. So, Nike created shoes with red laces, Apple created red iPods, American Express issued a red card, and Armani designed red clothes and jewelry. The business model was this. First, Bono and the partner companies would generate massive publicity through advertising and press. For example, Bono went on a filmed shopping spree with Oprah, going store to store buying red themed merchandise. Hey, we're here. We're here at the Apple Store! I'm so excited about the Apple Store! We're at the Apple Store! Oh, very cool!

Oh, wow! Cool! This is where the red iPods are. Hello, Apple Store! Oh, my God, are they cool! That publicity and the thousands of news stories made the red-themed items highly desirable. Then, when consumers purchased red items, a portion of the profits went to Bono's Red Organization, which, in turn, sent 100% of that revenue to global fund programs, which fight

AIDS, tuberculosis, and malaria in Africa. The rest of the profit went back to the participating corporations. As with all charitable initiatives that have an element of profit attached, there was enormous pushback. Many felt shopping was simply an offensive solution. But, as Bono says, it was key because profit makes the entire program sustainable. Product Red, to date, has raised over $215 million,

and over 14 million people in need have been helped. With medicine that the Red campaign helps provide, the transmission of the AIDS virus from mothers to babies can be prevented. The organization's goal? The virtual elimination of HIV transmission to babies by 2015, meaning the first AIDS-free generation in Africa since the emergence of the disease. It's a bold, audacious goal built on product, marketing, social media, community, distribution, and profit.

Because the best way for a business to help a cause is to be a great business first. The world of cause marketing has really bred a new category of company. There are for-profit corporations, The world of cause marketing has really bred a new category of company. There are for-profit corporations, not-for-profit organizations, and now there are not-only-for-profit companies. They're an interesting hybrid. These new companies are run by people who have created a great product or service and who also understand that by embracing a cause,

they can help make the world a better place and make profit at the same time. As Joe Waters says, you can't put mission before margin if you want to succeed.

It's an unsettling philosophy at first blush. But you can see it reflected in the motto of Kind Healthy Snacks, a company that makes great-tasting, all-natural snack bars

and donates money to causes that are based on acts of kindness. Their slogan? Be kind to your body, your taste buds, and the world. If you break that down,

it states that the goal is health, the vehicle is a tasty product, and the financial rewards of the first two help make the world a better place in that order. Cause marketing isn't philanthropy. It's good business. Almost 70% of us prefer to do business

with companies that commit to causes, and almost 90% of us would switch from one brand to another if it was associated with a good cause. Those are numbers no smart corporation can afford to dismiss. And lastly, Bono makes the biggest point of all. The contentious point. Yet, it's the one that underpins the entire success of cause marketing. That profit makes it sustainable. It's a whole new world of giving when you're under the influence. I'm Terry O'Reilly. Thank you. Hi Terry, Keith Ullman calling.

You know, I really like engineering the show, but now that it's a new season, I thought I'd mention a couple of things. You like to have the studio door open. I like it closed. You like to record the show in the mornings. I prefer the afternoons. I know you're Irish and like the speakers turned up loud,

but I'm Swedish and I prefer them turned down. Come to think of it, I'm kind of like Billy Wilder. Younger, wittier, confident. You're kind of like Charles Brackett. Hold. Under the Influence was produced at Pirate Toronto. Sound engineer, Keith Ullman. Theme music by Ari Posner and Ian Lefevre.

Series coordinator, Debbie O'Reilly. By the way, I know you've been dreaming of wearing an Under the Influence t-shirt. Or maybe I was dreaming that. But anyway, we have them for sale on our shop page. And if you listen to the show while sipping a tea or a coffee, have we got the mug for you. Go to terryoreilly.ca slash shop. See you next week.