International - Positive outcomes for brands that rally to a cause
By Jack Ellis
November 16 2011
Cause marketing, whereby a commercial brand teams up with a non-profit organisation to promote their products or services, can be a real force for good. For example, PepsiCo has just announced its second $500,000 donation to the Entrepreneurship Bootcamp for Veterans with Disabilities, a foundation that provides business training to post-9/11 US veterans with disabilities. The beverage giant will provide an additional $250,000 for every 10,000,000lb of material recycled by American consumers in its Dream Machine recycling banks.
“For the charity there are two very direct benefits,” says Doron Goldstein, a partner at Katten Muchin Rosenman LLP who focuses on the intersection of trademark and marketing law. “The first is the donation that the charity receives .The second is that the non-profit is getting itself and its cause publicised. When you have a commercial brand that is advertising a charity, that charity gets more ‘free’ exposure on the television and through other media channels than it ever would normally.” Meanwhile, he notes: “The incentive for the commercial brand is that people feel better about buying its product. There are studies that show people are more likely to purchase a product that is going to assist a cause that they believe in.”
Of course, not all cause-related marketing requires a particular organisation or group to be signed up - Ben & Jerry’s recently voiced their support for the Wall Street occupiers. However, where there is a formal partnership, collaborating parties could find themselves with egg on their face and a damaged perception of their brand if the correct due diligence isn’t done. “The downsides, from a branding perspective, is that both parties have to be very careful about who they are associating with,” says Goldstein. “For instance, a lung cancer charity might enter into a marketing venture with a clothing brand. But if the parent company of that clothing brand buys a tobacco brand, then that would cause very obvious issues for both parties in the venture.”
Adverse publicity is also a risk if cause marketing campaign regulations are not adhered to. Most US states have clear regulations relating to fundraising, and many have passed legislation relating specifically to cause marketing link-ups, or ‘co-commercial ventures’ (CCVs). “State regulations regarding CCVs will usually include certain requirements regarding accounting, funding and record keeping,” says Goldstein. “A number of states also require a written contract for the collaboration. From a trademark law perspective, I’d suggest that trademark owners would want to do that anyway.”
Importantly, says Goldstein, “the disclosure of what the actual benefits to the charity are needs to be made clear.” In 1999 the state of Georgia investigated the well-known (and still ongoing) ‘Save Lids to Save Lives’ campaign run by General Mills’ Yoplait brand. The campaign promised to donate ¢50 to breast cancer research each time a consumer redeemed a lid from a Yoplait-branded yoghurt. However, the state ruled that Yoplait had deceived and misled consumers as it had already promised a maximum of $100,000 to the Breast Cancer Research Foundation (BCRF) regardless of how many lids were returned. As a result, Yoplait was made to donate an additional $63,000 to the BCRF.
Another key question from the trademark owner’s point of view is whether there are any risks or difficulties associated with displaying one’s trademark alongside that of another organisation. The two marks are distinct indicators of different goods or services, and it is of central importance for mark owners to ensure this separation remains clear for the duration of the marketing campaign. Goldstein notes: “The benefit to both parties is that they don’t create a new mark; it is rather that they are promoting their existing marks. So the complexity with CCVs in a trademark law sense is avoiding too strong an association between those marks, which can be quite a delicate balancing act.”
All-in-all, a cause marketing campaign can be win-win for all of the parties involved – but commercial brands and non-profit organisations must be aware of who they are doing business with to avoid adverse publicity, penalties for misleading consumers or weakening their respective trademark rights.
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