The Blog of Daniel Francavilla

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Corporations taking advantage of “socially responsible advertising”

Posted on March 11, 2011 by Daniel Francavilla

This is a response to Judith Schwartz’s article ”Socially Responsible Advertising: Altruism or Exploitation?”

Schwartz asks if corporate advertising with a social agenda is altruistic or primarily a profit-making marketing strategy. There are countless examples of businesses and individuals that are increasing their charitable contributions and committing to making the world, or their community, a better place. However the question of motivation and influence of these actions is of great concern. Are most corporations as selfless as individuals are– and would they typically choose to donate?

Altruism is about being selfless and making sacrifices for others. I do not believe that corporations publicly sponsoring or donating to a cause is altruistic, because above all other reasons the sole propose of such businesses is to generate profits for their shareholders. If they are instead interested in volunteering and “doing good”, it is because they gain from these actions in some way. Did Starbucks loose out by announcing a portion of every coffee during one day would benefit a non-profit? No. Did Reebok promoting international human rights minimize the fact that they exploit child labour? No. Companies do not sacrifice their resources or profits in order to give to charities. That, however, would be selfless. The corporation’s goal is to earn as much money as possible and to turn a profit every year – helping the homeless shelter next door to their corporate headquarters is irrelevant to this goal. Instead they give some extra profits, mostly at insanely low proportions, to benefit themselves (through increased sales of cause-affiliated products and a positive image in the eyes of consumers). Schwartz illustrates the issues with corporate image and bottom line as a focus (such as Benetton using popular causes in their clothing marketing to increase sales), and that there is currently no such thing as true altruism when it comes to business.

Corporations today are legitimately afraid of losing or offending customers that believe in a just world. Sometimes experiences for corporations do not go smoothly – for example, there have been various “backlashes” on Starbucks, among other companies. Scott Bedbury, Starbucks senior VP-marketing believes that “advertising can help address the issue of Starbucks backlash.” Clearly this advertising; specifically affiliating themselves with non-profits, causes and “sustainable” initiatives around the world; is major evidence of how they want the public to perceive them. Many businesses are becoming affiliated with non-profits simply to better their image – with barely any funds going to their associated causes – yet consumers choose these brands because of the encouraging concept of ‘helping a charity’. The term “Philofrags” was created specifically to describe the small fragments of things that companies do to appear that they are “full of caring, concerned and thoughtful people who have their hearts in the right places”.

Ethos

Based on this attitude an example of campaigning to associate a brand with “social good” is Starbucks Ethos Water brand, advertised as helping children get clean water – which sounds great, however they charge obscene prices with minimal portions donated. Some consumers notice this and have campaigns against this stating, “Ethos-Water will join leading NGO’s at events across North America to further disguise profits with the guise of operating a philanthropic business as profits shoot through the roof.” Polls have shown that cause marketing (the fastest growing form of marketing, in which brands affiliate with a social cause) influences consumers’ perception of brands and their purchasing decisions.

Sadly, causes are selected based on guidelines that fit the image (referred to as “Image Builders”) of the brand. As Schwartz explains, cause-related marketing proceeds are mainly directed to large, visible causes that appeal to a private-sector constituency. Because of this trend, “less marketable” yet equally worthy causes may not benefit. I do not think this is just – but does it have to be? No, because “corporations seem to have one goal in common—to increase their profits through advertising”. Unless there is a proportionate, significant impact and they are practicing what they preach – it is important for consumers ask, “Is what appears to be socially responsible advertising actually ethical?” Schwartz states that businesses are are trying to “persuade the consumer to buy their products by portraying themselves as having progressive value systems similar to their own”.

Being someone who has started a non-profit organization and works with various charities, I find it frustrating and selfish when corporations create their own causes, registering new non-profit organizations that would simply result ib tax benefits and control. There are countless worthy charities and causes in existence today, many of which who are highly credible and can have a far greater impact than a new initiative run solely by a corporation. I agree with Schwartz in stating that at times there is much insincerity with businesses – such as Levi’s, appearing socially responsible for donating auction proceeds to Peace 200, while at the same time operating some of the “worst sweatshops in the developing world.” Large businesses capping donations or donating an incredibly low percentage of earnings is unfair and not effective to the causes that need support most. Especially if additional earnings are generated by showcasing the cause – the non-profit better be receiving legitimate support. Brands seeking to strengthen relationships with the community at large will generally sponsor or donate to events and local causes. Despite their efforts and some positive outcomes, I personally see this as buying out support, buying out a positive image. I am a huge advocate of philanthropy and social activism overall – and like Schwartz, I encourage individuals to from their heart for the right reasons. Hopefully one-day corporations and non-profits can co-exist without constant exploitation.

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  • http://pledgingforchange.com Karen Maskall

    These things are also happening in reverse as more and more charities affiliate themsleves with shops that sell products that do harm to people and planet , just so they can earn a token percentage (maybe 10%) as a financial reward for promoting and successfully selling the products.
    I honestly wish that charties would stop and think about who they are affiliating with. It makes no sense for a charity to save a village in one corner of the world and then support the destruction of  a village in another corner by the promotions of unethically produced products.

  • Info

    Very interesting topic if I might say so, nice to be quoted.


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