Cause Marketing is a combination of brand association, direct marketing and public relations. With public relations in particular it can help with reputation mangement, crisis management, investor relations, labor relations, product placement and grassroots PR.
Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative efforts of a “for profit” business and a non-profit organization for mutual benefit.
The creation of the term “cause-related marketing” is attributed to American Express, and it was coined to describe efforts to support locally based charitable causes in a way that also promoted business.
According to a report published by onPhilanthropy[2], cause marketing sponsorship by American businesses is rising at a dramatic rate. Citing an IEG, Inc. study, $1.11 billion was spent in 2005, an estimated $1.34 billion will be spent in 2006, and the number is expected to rise further in 2007.
Cause-related marketing is a powerful marketing tool that business and nonprofit organizations are increasingly leveraging. According to the Cone Millennial Cause Study in 2006[3], 89% of Americans (aged 13 to 25) would switch from one brand to another brand of a comparable product (and price) if the latter brand was associated with “good cause”. The same study also indicated that a significant percentage surveyed would prefer to work for a company that was considered socially responsible. This can be linked to the increase in workplace giving programs. Earlier studies by Cone indicate an upward trend in the number of Americans who associate their own buying habits with cause marketing as well as an expectation that companies to be “good corporate citizens”[4]. These studies also show a substantial increase from just before to just after the September 11, 2001 attacks.
Numerous other studies[5] have also been conducted to show that cause-related marketing has helped to increase a company’s profits. For example, in the cause marketing campaign by American Express (to which the term “cause marketing” is attributed), the company saw a 17% increase in new users and a 28% increase in card usage
Cause Marketing can help create the halo effect for businesses.
The halo effect refers to a cognitive bias whereby the perception of a particular trait is influenced by the perception of the former traits in a sequence of interpretations.
Edward L. Thorndike was the first to support the halo effect with empirical research. In a psychology study published in 1920, Thorndike asked commanding officers to rate their soldiers; Thorndike found high cross-correlation between all positive and all negative traits. People seem not to think of other individuals in mixed terms; instead we seem to see each person as roughly good or roughly bad across all categories of measurement.
A study by Solomon Asch suggests that attractiveness is a central trait, so we presume all the other traits of an attractive person are just as attractive and sought after.
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