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Cause Marketing in the Economic Downturn

Get Your Chin off Your Chest


It’s probably just superstition, but I have steadfastly avoided posting anything about the recession.

After all, considering the amount of liquidity sloshing around after all the actions already taken by central bankers in Asia, Europe, and the United States, it’s plain that the real problem right now isn’t access to capital. The problem is one of confidence.

This is just one small little blog on the semi-obscure topic of cause marketing, but I see little reason to pile on.

So, assuming that the economy doesn’t turn into Oklahoma circa 1935 (Dustbowl deflation) or the Weimar Republic of 1923 (hyperinflation), this will be my first and last posting on the topic of the economy.

In the States, economists are struggling with exactly which recession to compare this one to. Is it like the downturns of 2000, 1980 and 1974? Is it a second Great Depression? (Short answer: No. For one thing, unemployment was 25 percent in the States in 1933.) Could it be an analog to Japan’s “Lost Decade” from 1991-2001?

But like all things economic, we won’t know for sure what it was until after the fact. What a gig the practitioners of the ‘dismal science’ enjoy.

Which reminds me of a joke:
A woman hears from her doctor that she has only half a year to live. The doctor advises her to marry an economist and to live in North Dakota. The woman asks:
“will this cure my illness?” The doctor replies: “No, but the half year will seem pretty long.”
Already, leading indicators suggest that cause marketing, social marketing, and corporate philanthropy are in decline.
  • A September study from Duke University finds chief marketing officers paying less attention to campaigns that “promote benefits to society.”
  • Small businesses are enthusiastic about corporate philanthropy, but nonetheless giving less.
  • Starting in 2007, all charitable giving in the United States, including corporate giving, did not keep pace with inflation, although it did increase in terms of actual dollars.
But, Giving USA also finds that since 1969, giving has risen every year in the United States except 1987, which featured an odd blip in the tax laws.

What are cause marketers to do in this confusing economic climate? After all, cause marketing… which was invented (more or less) in 1983… has never been through a recession or a sustained downturn. We have no history to guide us.

Absent any historical guidance, I humbly offer five thoughts:
  1. I still find persuasive the all-but-real-life findings from the Duke/Cone behavioral study that demonstrate that cause marketing works to increase sales.
  2. More than ever it’s clear that the matches between causes and companies have to be explicitly clear. In this economy, it’s unrealistic to expect customers to make any leaps of logic between a company, a campaign, and a cause.
  3. Likewise, I think transparency about how donations are determined in a cause marketing campaign, and how the donated money is used, is more vital than ever.
  4. To be cost-effective, cause marketing must rely more on PR, social media, and word-of-mouth/guerilla marketing.
  5. Get your mopey chin off your chest. Many great fortunes are made in bad economic times.

Comments

Casey Brennan said…
Paul-

Great points made during a time when most want to shy away from the topic.

Cause marketing leaders recognize that business and society are linked, and therefore have a unique challenge and opportunity to make a positive impact on society, while also boosting short-term sales, long-term reputation gains and stakeholder loyalty.

While some will inevitably shift their focus away from cause branding, there is a renewed opportunity today for the staunchest supporters to reaffirm their commitments to social and environmental issues and break through the cause clutter.

If you are interested, we recently posted our thoughts about the state of the economy and Cause Branding on our Web site: http://www.coneinc.com/causeandeconomy

Thank you for your insight and for starting the tough conversation!

-Casey Brennan, Insights Coordinator, Cone LLC
Jordy said…
I loved that joke, but it's not really fair to North Dakota. :)
Hi Jordy:

You're right, I shoulda used South Dakota ;>

Paul

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