Thursday, March 11, 2010

Cause-washing: The New Black?

We've all heard about green-washing, what Urban Dictionary defines as "when companies pretend to be environmentally friendly -- when in fact they are not." Now there's a new term -- cause-washing -- that's being used with increasing frequency in the blogosphere to describe inauthentic marketing-for-good.

To talk about this and other new trends and challenges in the worlds of corporate responsibility and social enterprise, I sat down recently with the popular Harvard Business School marketing professor V. Kasturi Rangan, who moderated a panel in February on the subject at Harvard's Social Enterprise Conference 2010. Rangan says he worries a lot about how some causes may be considered a better "sell" than others. He also says he thinks it will soon become critical for companies involved in cause-branding to start proving social impact amid an increasingly cause-crowded marketplace -- but adds that few firms are, as yet, up to the challenge. Here's an edited transcript of our conversation:

What are the new cause-branding trends going forward?
I see pluses and minuses. Cause branding requires you to attach the cause to brand and then commercialize it; there are some causes that are more commercialize-able than others. That does not mean that those other causes are any less important. Some causes pull on your heartstrings. And sure, none of us want to see a hungry child; none of us wants to see children without access to education; we don't want to see children without access to health care. I mean, emotionally, we get pulled in. But there may be other things, for example -- drug addicts; for example, older adults who some in society might think are supposed to take care of themselves. Those kinds of causes may not be saleable, commercialize-able. So my worry is that if we cause-brand some causes and not others based on how sale-able they are to the general public, then we are letting private enterprise choose what is most important for society -- which may not exactly align with what the most important causes are. I really worry about that a lot. There needs to be some sort of clearing mechanism where not just the causes that are commercialize-able dominate all of the money from corporations. There must be some mechanism whereby some of the other causes also have a chance to get some corporate money to play up their causes.

On the plus side, we in America are a mature market. Most consumers in America pretty much know what kinds of products and services they can get and so it's very clear that a differentiation factor is what a company is doing for society. I believe a lot more products and brands will jump into cause-branding. When all is said and done, cause marketing is just a teeny fraction of philanthropy - about $15 billion or $20 billion, alone, versus all of philanthropy, which is about $350 billion. So we might see more corporate money coming into cause branding, and this is good. Once a corporation attaches itself to a cause, it tends to take it seriously, and public companies have oversight and so forth to help guide them in how well they execute. So it's good for the business. It's good for the social fabric.

And the downside? Is cause marketing a tougher sell?
Yes, if everybody claims that everybody is doing a great thing for such and such a cause, and then sooner or later, consumers will become skeptics. It's already starting to happen in some cases. I think the most authentic brands going forward will not only have to be transparent about how they are raising money and how they are spending it, they also now will have to show they are having a social impact. This is something that I do not think that most corporations are ready for. Corporations are willing to show financial impact. They are willing to show transparency. They are willing to show they're authentic about what they are thinking. But are they ready to show that yes, this is the cause that I care for, and look at the impact I've made in society? That, I don't think, the corporations are ready for. But it is something that corporations that really want to differentiate themselves are going to have to step up for. It's a new game for them that many haven't yet started to think about.

Why aren't most ready?
It's a cost item, and it's incredibly more difficult to achieve. Measuring social impact is different than measuring financial impact. (See "Does Corporate Philanthropy Sell?)

Can you cite a company that is?
Timberland, for one, is trying to measure the social impact of what it is trying to do. It's an early symbol of what is happening.

What are the stiffest challenges for cause-marketers?
The only way to succeed here is to support value. Newman's Own and others say that at best, consumers may pay a small premium for a cause-brand, but not a lot more. Cause brands now need to operate at a superb level of efficiency and effectiveness just to generate an extra surplus to support the cause and the movement. Cause brands have to be very lean, very hungry and really tough.

And secondly, of course, cause brands need to be authentic. That's always been the case and this is becoming ever more critical. When you lose trust on 'good' initiatives, your brand suffers irretrievably. A decade ago, maybe you could get by with a little sloppiness on the authenticity front but now - because there are so many companies claiming to be helping a cause - you have to run these cause branding campaigns as both a terrific business and you have to be authentic. There are so many watchdogs on the Web now that will call you out if you're not. With online social networks, successes and failures get amplified. Customers talk to other customers and stumbles can hurt badly. The Web is both a friend and a foe.

In that vein, what do you make of the new consumer activism online - chiefly social enterprises like Carrotmob, Quiet Riots and Good Guide that crowdsource consumer opinion? Are these new online networks friends or foes?
My quick takes on it? This is good for companies; they can get real-time consumer feedback. But companies and movements have to be careful. Ultimately, corporations and brands exist to show a return to shareholders. Some of these movements and the things they ask for may be perfect from the point of view of the small group of consumers that these movements represent. However, what these consumer groups are asking for might not form a valuable business proposition in terms of scale or in terms of sustaining the franchise because a company may not be able to make that kind of product or service available for, say, a mere 10,000 people in a northeast corner somewhere, or to a certain type of demographic. And that's where I think the problems might come, where it becomes like an activist movement, where the activists get up in arms over, say, what mothers really need but there's not a single firm able to take care of it.

If these new online consumer movements can be translated by companies into something viable business-wise, they will present an opportunity for businesses. As long as the consumer feedback is viewed constructively and firms are mindful of the fact that these are great opportunities for them to learn about digital markets and get a very quick sense of how [online complaint] builds up, maybe [online consumer groups] can help companies to decrease the cost of launching a product and taking it to market.

Otherwise, I'm afraid that these [consumer] movements could create more dissonance - cases where these online groups will not have impact and then start to feel used, thinking 'I gave all of these ideas to this company but look at what corporate American has done. It's not stepped up to the plate.' Businesses, beware.

-- By Marcia Stepanek

(Illustration by Matt Hertel for

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