Partnerships with causes and non-profits is not a major sponsorship sector, but it is growing. North American spending on cause sponsorship is expected to reach $2.06 billion this year, up from 2B in 2016 (IEG). Or, almost 9% of all sponsorship spending (numbers from the Canadian market, according to the Canadian Landscape Study are below that - at 4%).
Cause sponsorship is of great interest, regardless of its relatively small size. That’s because corporate social responsibility has become an indispensable tool for brands looking to set themselves apart from the competition.
Why? Because consumers today expect companies to do their part in the issues that are important to them. They expect companies to contribute to the collective wellbeing. This means that being associated with a cause is an effective way for companies to get involved socially and earn the approval of consumers.
Data on Corporate Social Responsibility
A recent study conducted by CROP research notes how corporate social responsibility influences consumers’ perception of companies.
The study confirms that CSR is an effective lever to engage consumers and positively influence them in their purchase intention. For example, some 71% of consumers will be influenced to buy products from a company that is socially responsible.
What’s more, it reveals that CSR not only influences consumers’ decision-making, but also how much they are willing to pay. Half of the respondents claimed that they would pay more for products made by a socially responsible company.
So social responsibility can benefit a company, while on the other hand, a lack of it can be detrimental. Some 67% of consumers will refuse to reach into their wallet for an irresponsible company.
And what’s even more important is this: the harshest judges also happen to be the consumers most sought after by companies: young people, educated people and people with higher incomes. If we look at Millennial attitudes towards the philanthropic initiatives of brands (in Canada), the numbers show the following:
With that in mind, let’s go over three interesting trends for cause sponsorship this year: relevance, brand activism and accountability.
So all the evidence shows that supporting causes is great! Of course it is! But you also have to be effective too. And to be effective, the cause has to be linked to the core business of the company, or its underlying mission or purpose.
Relevance is a very important concept in sponsorship performance. And relevance applies to cause partnerships even more. In fact, it has been widely proven that relevance between the sponsoring company and a property can lead to better recall, higher consumer appreciation of the brand and an increase in purchase intention.
The results of the CROP study mentioned earlier also support this. They show that consumers also expect companies to support causes that are a good fit with their business sectors.
For example, we see a strong link between the three most important causes for consumers and the three industries they expect the most from in terms of CSR:
Environment and oil and gas companies;
Healthcare and the food services industry;
Fighting poverty and financial institutions.
Here are a few more examples of partnerships that are linked to brand purpose.
Uber and Goodwill
The brand mission of disrupter Uber is “Finding the way: creating possibilities for riders, drivers and cities”. When the brand partnered with Goodwill for a simple initiative, it was perfectly in line with its core mission: donors could request a pickup through the Uber app for their donations to be delivered by an Uber directly to their local Goodwill, at no cost.
Sport Club Recife - Immortal Fans
Another great and rare example comes from a partnership between a Brazilian football (soccer) team and the government for public health initiative. As fans live and breathe with their favourite club, a campaign was built on this insight with the objective of increasing the number of organ donors in the country. By giving forward your organs to another fan after your death, you lived on to support the team. The results were overwhelming: 51,000 cards and the waiting list for heart transplant down to zero.
Not all types of relevance are created equal. For example, when solely based on image relevance, there are no guarantees that it will stick in the consumer’s mind.
One such example comes from Honey Nut Cheerios, whose bee mascot inspired an initiative to boost the ranks of North America's imperiled bees. The initiative was a success, as Cheerios gave away 1.5 billion seeds in only one week of the promotion, depleting its entire stockpile. While the initiative was popular, the impact on the brand may be limited by the fact that it’s not linked with the brand mission and core purpose.
A strong purpose shared between the brand and the cause can deliver greater results than a fit that’s based on a limited tie-in between a brand and a cause. The idea is to try to find the sweet spot between your brand’s purpose or mission and a problem or issue you can try to tackle as a company.
2. Brand Activism
Now, with the current political climate, brands are becoming major players. Some with more success than others.
In the past, some brands tried to create their own platform for grassroots projects and donations. With limited success.
One example is the Pepsi Refresh Initiative, launched in 2010. Instead of investing money in a Super Bowl ad, Pepsi took 20 million dollars of its marketing budget to award grants to individuals and non-profits for ideas with a positive impact on their community. Pepsi sales sunk and two years later the initiative was dropped to invest back in a Superbowl ad, featuring superstar Elton John.
So how can a brand get it right?
One brand that does particularly well is Nike. It uses its platform as one of the biggest sports brands in the world to send a message of equality.
Its platform “encourages people to take the fairness and respect they see in sport and translate them off the field.” And Nike makes use of many of its brand ambassadors to support this. Nike has also announced plans to donate $5 million in 2017 to “numerous organizations that advance equality in communities across the U.S.”
In other cases, when not backed by concrete actions and authentic partnerships, taking a stand as a brand can backfire. This was the case for Audi.
While his daughters compete in an amicable kart race, beating her fellow male competitors, her dad wonders: “Do I tell her that despite her education, her drive, her skills, her intelligence, she will automatically be valued as less than every man she ever meets?”
But instead of being inspired, the media took a look at Audi’s track record on promoting women to leadership roles. Audi has no women on its six-person executive team. Its board is only 16% women, which is below the already-low average of corporate boards of Fortune 500 firms.
What can we learn from these examples? Taking a stand as a brand can be tricky in terms of communication. First, your company must have the legitimate background to take a stand on the issue. Whether it’s through grassroots involvement, donations or your own track record. Then you have to communicate skillfully to be effective. For example, you can’t brag, obviously.
Finally, as we looked at all the examples above, we noted their degree of success and compared to the not-so-successful campaigns. To do this, we had to be able to measure their outcomes. Measuring is a real challenge with cause sponsorship and cause marketing: the ability to show real, positive outcomes. Especially, when you consider that consumers are weary of bland initiatives labeled as pink or green washing. There is a real need to show how the dollars are actually invested.
“We” (formely Free the Children – Me to We) came up with an interesting solution called “Track your Impact” that enables you to track where and how your donation is being used online. Making good use of the digital landscape, this is definitely a step in the right direction.
Cause sponsorship is an interesting and accessible tool for companies to get involved in corporate social responsibility without having to create a platform on their own and by partnering with experts on specific issues as well as providing support for a long-term platform versus a PR stunt.
There is no shortage of issues companies can contribute to solving. We need more companies that have a purpose at their very core, like the Tesla, Tom’s shoes or Whole Foods of this world. But any company with a solid vision coupled with buy-in from upper management can contribute.
Original video presentation SMCC Market Watch – March 22, 2017, Toronto