Ethical Marketing Selling Goods by Doing Good
Save the rainforests by having a beer, help African school-children by eating chocolate: companies have discovered that the way to a customer's pocket is through his heart. But just how ethical is "ethical marketing?"
Although unclear slogans like "1 liter for 10 liters" sound good, what do they actually mean? In reality Volvic donates a mere 0.28 cents for every liter of mineral water sold.
It's a fact of life in the advertising universe that companies use all kinds of promises, that go well beyond price and quality, to market their products. Cosmetics firms aren't just selling beauty, but also a healthy dose of love. And cars, cognac and pasta dishes elicit passion. But now marketing experts have added a new, seductive advertising ploy to their standard bag of tricks of human emotions: a good conscience.
"Let's all work together with UNICEF and do something about the lack of clean drinking water in Ethiopia," suggests Danone Germany in its current campaign for Volvic mineral water. And when chocolate maker Ritter Sport markets its new children's candy bar, "helping out with Quadrago (Ritter's rectangular chocolate bar)," is suddenly the in thing to do. Procter & Gamble, on the other hand, is advertising its new blend-a-med toothpaste with a "smile for the children in Brazil."
Welcome to morals as a marketing tool. More and more companies are now promising to do good things -- if consumers buy their products, that is.
Drink your Way to Environmental Protection
Krombacher, a German brewery, started the trend in Germany three years ago when it expanded purity regulations in the German beer industry to include drinkers' consciences. In an ad campaign it launched in 2002, the company promised that "with every case of Krombacher Pilsner you buy in the future, you'll be saving a square meter of African rain forest." With TV talk show host Günther Jauch affably reaching for a bottle of Krombacher, it quickly turned into the most successful marketing campaign in the company's history. And while sales dropped at other breweries, Krombacher was able to report an 8.1 percent jump in its sales for 2003.
It took the advertising industry a while to recognize the moral of this story -- but once they did there was no stopping them. Kellogg's used its profits from Cornflakes to pay school fees for "Children in Need," and German candy maker Katjes began selling "Rock 'n' Gums" to promote the previously little-known Nordoff/Robbins method of music therapy.
"It hasn't just been since the African locust crisis that more and more companies are taking an active position on social issues, a position based on the motto 'Do good, and make sure you talk about it.' The resulting image transfer is certainly an intended side-effect," says Oliver Schwall, Managing Director of the major German advertising agency Springer & Jacoby.
Companies showing a commitment to social issues are not a new phenomenon. But for some businesses, sponsorship events and photo ops to document the handing over of charitable donations are apparently no longer enough. More and more frequently, the issue of social responsibility is being directed to publicity departments, where it is effectively integrated into product marketing.
The result of this shift in strategy is a flurry of stickers landing on cookie boxes, water bottles and chocolate bars. These logos are meant to link corporate largesse to the customer's purchase decision. Southern German chocolate manufacturer Ritter Sport, for example, promises "1 chocolate bar = 1 day of learning." In other words, for each bar of children's chocolate it sells, the company plans to donate 1.4 cents to UNICEF for school materials bound for kids in Angola, Malawi and Rwanda.
"Responsible Marketing" is ad-speak for this trick of lending brands a social image and injecting a charitable dimension into consumer spending. And the advertising industry has high hopes for this new trend. "Responsible Marketing is the playing field on which brands will be competing in the future," says Emke Hillrichs of "diffferent," a Berlin-based consulting company.
Faced with saturated markets and growing similarities among products and advertising slogans, social involvement is set to become the new criterion in buying decisions. Companies are betting that charity will increase their appeal to consumers, while at the same time concealing their main objective: turning a profit.
Who Needs Figures, when you Can Talk in Liters?
"Each bar of chocolate helps and you can help out too," says German actress Iris Berben in a Ritter Sport ad.
Company spokeswoman Eva Podlich insists that the campaign is not intended to increase Volvic revenue: "of course we'll be pleased if the campaign results in more sales -- because it will allow us to get more done." But the company is unwilling to reveal just how the catchy advertising slogan "1 liter for 10 liters" came about, and just how much the company donates for each bottle of Volvic sold. "We communicate in liters," says Podlich.
Nebulous promises and big numbers are apparently a fixed component of the latest marketing craze. Krombacher supposedly planned to protect ten million square meters of rainforest in the first year of its campaign. It sounds like a lot, but in fact it corresponds to approximately one-tenth of the area of the North Sea island of Sylt, or about 21 acres. Besides, it's by no means true that -- as the ads implied -- one additional square meter of rainforest was purchased or re-timbered for each case of beer Krombacher sold. Instead, Krombacher donated the proceeds to an ongoing project run by the World Wide Fund for Nature (WWF), which uses the money to support a wildlife reserve in the African Congo basin. So instead of planting trees, beer drinkers ended up contributing to the purchase of outboard motors, two-way radios and Jeeps.
Krombacher was ultimately sued on charges of engaging in unfair trade practices, and after a number of lawsuits the brewery was forced to tone down its grandiose advertising claims. The judge presiding over one of the lawsuits ruled that the company's slogan was incompatible with fair competitive practice, because the campaign was too nebulous for the consumer.
The company then recalled all its rain forest leaflets and abandoned its TV campaign. More recently, Krombacher toned down its claims to "you enjoy -- we donate," and sent another 500,000 euros to the WWF, but without tying the donation to beer sales.
Krombacher isn't the only company whose urge to be charitable has been curbed by the courts. Cookie manufacturer Bahlsen has also had its share of problems with consumer advocates and the courts.
Free School Trips -- if you don't Mention the 99 Euros, that is
In a recent campaign aimed at increasing cookie consumption -- and sales -- the snack manufacturer Bahlsen encourages schoolchildren and their families to collect points that were printed on Bahlsen packages. The most ambitious point collectors were then rewarded with a class trip. The company promised that it would send any school class that managed to come up with 222 points on a three-day trip to Berlin, Hamburg, Munich or Cologne. The company, apparently overtaken by a newfound altruism, announced that in times of shrinking school budgets, it wanted to help schoolchildren experience a holiday together. But whether the excursion was as much of a bargain as it was made out to be remained unclear. That's because, in addition to collecting Bahlsen points, each child was required to pay 99 euros. In late July, the Celle Higher Regional Court issued a temporary injunction barring the baked goods giant from continuing its promotional campaign, because, as the court argued, it exerted unacceptable buying pressure on children and parents.
Procter & Gamble's current campaign. Companies like this are hardly making a secret of their donations.
Charitable organizations see a lucrative source of funding in such cooperative ventures. "For us, it's a new way to generate income," says WWF spokesman Jörn Ehlers. Last year WWF's Panda Foundation generated 900,000 euros in revenues from the sale of licenses to its panda logos to consumer products companies like Germany's Kühne, a producer of mustard and other condiments.
SOS Children's Villages have also turned professional in their marketing of logos and credibility. Because charitable organizations are only permitted to accept donations without providing anything in return, the organization established its own marketing company last year, Hermann-Gmeiner Marketing GmbH. According to Hermann-Gmeiner, its main objective is the careful selection of partner companies. But Joachim Tomesch, an official in the donations department at UNICEF's German headquarters, is cautious about such partnerships: "with many of the inquiries we receive, I sometimes have the impression that people intend to use us as a Trojan horse." This, says Tomesch, is why the organization flat-out rejects alcohol and tobacco producers. Even DaimlerChrysler wouldn't stand a chance with Tomesch, because, as he says, "they're involved in weapons deals."
Could the Product actually be Contributing to the Problem in the First Place?
Just how easily advertising with a social conscience can turn into a farce recently became evident when German airline LTU became involved in the Krombacher rainforest project, promising to donate money to the rainforest for each of its passengers. For a relatively innocuous-seeming donation of 250,000 euros, the WWF's German headquarters let itself be convinced to award the airline an environmentally clean slate. But the wildlife conservationists at WWF apparently failed to realize that air travel and the consumption of kerosene have more in common with environmental pollution than saving the rainforest. In the end, both the WWF and LTU earned more derision than sympathy as a result of the campaign.
Chocolate maker Ritter Sport managed to avoid a similar PR debacle by doing a little brainstorming before launching a promotional campaign. The idea of using chocolate advertising to help diminish hunger in Africa was quickly discarded. Instead, Ritter Sport joined forces with UNICEF to donate writing implements and blackboards to needy schoolchildren in Africa.
"Each bar of chocolate counts, and you can help out, too!" says actress Iris Berben in a Ritter Sport TV ad, accompanied by neatly dressed African boys smiling into the camera, not unlike the children drinking water from an African well in one of Volvic's ads.
The emaciated bodies one would be more likely to see in famine-plagued Niger these days have no place in the advertising aesthetic of these charity campaigns. Projects that yield neither pretty images nor can be reduced to simple formulas simply make for ineffective ad copy.
Ritter Sport has even declined to reap the marketing benefits of the "Agro-forestry Development Project," with which the company has promoted organic cocoa production in Nicaragua since 1990. According to company sources, the "1 Ritter chocolate bar = 1 day of learning" campaign, with its relatively small guaranteed total donation of 220,000 euros, is more suitable for advertising purposes than its Nicaraguan venture, despite the fact that Ritter Sport has spent 2.5 million euros on the project to date.
Consumer protection advocates are critical of campaigns that appeal to consumers' collective good conscience, mainly because it often remains unclear just how much of a product's price actually goes to charity. "If these companies are truly serious about the issues, they should become involved and should not tie their donations to the sale of their products," says Patrick von Braunmühl, director of the economic issues forum at the Federal Consumer Protection Association in Berlin.
Danone Germany was ultimately convinced to cite an actual figure. According to the company, it guaranteed joint venture partner UNICEF a donation of 250,000 euros. Given the company's projected average monthly sales figure of about 30 million liters of Volvic Naturelle in Germany, this would amount to a donation of 0.28 cents per liter of water sold during the three-month campaign.
Translated from the German by Christopher Sultan