pepsi-refresh

The next phase of cause marketing

July 30, 2012

By TRAY creative

This is the first in a four-part series examining how companies are leveraging their influence to drive social good, and joining their customers and fans in a demonstration of shared values—all through social media.

Brands and customers joining forces for social change

In 2010, Pepsi raised a lot of eyebrows when it decided to forego advertising in the Super Bowl for the first time in over two decades, instead focusing on a cause marketing campaign—driven largely through social media—called the Pepsi Refresh Project. It was the clearest sign yet that savvy businesses are waking up to a new expectation: American consumers are eager to team with their favorite brands in supporting and promoting social causes.

In fact, the 2010 Cone Cause Evolution Study found that more than 8 in 10 consumers say they wish more of the products, services and retailers they use would support causes. Nearly as many say they are likely to switch from one brand to another—price and quality being equal—if the other brand is associated with a good cause. And the clincher from an ROI perspective: More than half say that when choosing between two companies that each benefit a cause and sell equivalent products, they would pick the company that allows them to impact the donation by tying it into a purchase.

Those in corporate boardrooms seem to get it, at least on a broad level. According to the PR Week/Barkley Cause Survey of 2010, 75 percent of companies surveyed now engage in some form of cause marketing.

Yet in some ways the corporate conception of cause marketing still lags behind the consumer public: Only around one-third of the companies surveyed actually engage their own customers in cause efforts, and even fewer engage their own employees.

That’s a crucial missed opportunity.

The birth of a new era in cause marketing

Cause marketing, of course, is not a new concept. Its current form dates back to the ‘70s, when Marriott Inc. conducted a $2.5 million campaign on behalf of the March of Dimes. Since then, brands as diverse as American Express, Crate & Barrel, Lee, Nike, Gap and Starbucks have continually upped the stakes, using cause-related sales to collectively raise hundreds of millions of dollars for health, education and other social endeavors.

Then came Pepsi. As part of its Refresh Project, the global behemoth asked users to nominate and vote on specific nonprofit groups that would receive grants from the company. Pepsi handed out $20 million to causes in the U.S., and eventually expanded the program internationally.

What made this initiative different from its predecessors is the way in which Pepsi solicited participants: primarily through social media channels. It was one of the first high-profile cause campaigns that largely bypassed traditional media to reach its audience. The effort paid off in terms of consumer connection: Not long after the launch of the campaign, Pepsi had more than quadrupled its total of Facebook fans. And according to Advertising Age, Pepsi’s key brand attributes improved measurably over the course of the campaign.

Pepsi showed that simply writing a check for charity or even producing a cause-related product is no longer the best way to make a difference; far greater impact can come from harnessing the social energy of a brand community. Just as important, it also demonstrated that a brand doesn’t need expensive media buys to have a direct, meaningful conversation with consumers.

Coming in Part 2: How to build your own social media-driven cause campaign

What do you think?

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Comments

  1. Cool blog post, however, I am skeptical …

    Are companies engaging in cause marketing because it’s good for their brand image or because they actually care?

    On one hand you could say great work, they raised money for an important cause and their brand metrics improved. But then you look at their core business activities (in the case of Pepsi) and ask, do they really care?

    It’s hard for me to believe that they do, in which case ’cause marketing’ becomes just another slick advertising move …

    • Do they really care? Some do, and some clearly use these efforts as a way to divert attention from their business practices. You could argue that the millions of dollars donated to charity by the big oil companies is a smokescreen for the fact that they’re major polluters. Or that Pepsi’s generosity doesn’t change the fact that its products are major contributors to childhood obesity and other health concerns. It’s up to consumers to fully vet the companies behind the initiatives, and make a judgment. Flipping the question around, is it possible for a consumer to participate in something like the Pepsi Refresh Project, in order to help worthy causes, while at the same time rejecting the sponsor’s products?

  2. I think you make a few great points – there really is no black and white when it comes to these issues, and it is the consumers who really need to make the decisions.

    I think that ideally, people would consciously decide to avoid purchasing Pepsi products and use their savings to donate to a crowdfunding campaign in their community or a cause that they care about. Of course, it’s still a good idea to help an organization that may benefit from something like Pepsi Refresh, but who knows how many will be able to participate while simultaneously rejecting the sponsor’s products

    Overall, I would love to see a small or medium business learn from Pepsi’s marketing prowess and put together an awesome cause marketing campaign.

  3. Donna Callejon | August 5, 2012 1:35 pm

    Ralph isn’t suggesting that companies are doing this because they are altruistic. The Cone research points marketers in this direction because it’s what consumers SAY will drive their purchasing decisions (I am still skeptical).
    The fact that these programs are discussed as cause MARKETING campaigns run by brands (not corporate foundations or nonprofits) underscores that they are designed to enhance brand and sell product. Nothing wrong with that…but it shouldn’t be confused with an indicator of whether or not a company “cares” or not. IMHO.