When commercial brands link up in third-party promotions, the prime consideration is obviously a financial one. How much will each side gain, whether in hard sales revenue or the less tangible added value to the brand image?
Precisely the same is true when brands link with charities in such programmes. Unlike a straightforward donation, the commercial company usually gets a financial return in this deal. There is little altruism involved.
But the benefits are not restricted: they can be considerable for both sides. And given the sensitivity of charities, in particular to inappropriate matches, stories of disasters are hard to come by. “A badly chosen match might harm a company financially but not otherwise,” says Ken Dueck, a consultant at GGT Direct.
Losing potential revenue seems to be the worst that can happen if the fit is not quite right. One of the simplest forms of a third-party link is when the company says: “If you buy our brand we will donate a set amount to this charity.”
AA Insurance is donating 10 to Great Ormond Street Children’s Hospital for every new policy it writes as a result of a joint promotion, and Tesco recently donated a set amount to the RSPCA for every can of promotional petfood sold.
Both companies want increased sales, and in the AA’s case, access to a new market sector is also possible through Great Ormond Street’s donor database. But the residual feelgood factor and enhancement of the brand’s values can be just as important. “Our bottom line is the chance to pull in new customers,” explains Becky Hadley, a spokeswoman for AA Insurance. “But because we have a 9 million-strong database already, this is a nicer way of doing it rather than an ultra efficient one. It reflects well on us and what we do.”
Insurance is all about safety and protection, and it is easy to see the fit with one of the world’s top children’s hospitals. For Tesco, the RSPCA promotion added more integrity to its status as a petfood supplier in its attempt to take share from branded products.
“The RSPCA symbolises care of animals, so it is perfect in helping us establish our credentials in this market,” says a Tesco spokesman.
But what of the benefits for Great Ormond Street and the RSPCA? Janet Bartley, sponsorship manager for the Great Ormond Street Children’s Hospital Fund, says that re- venue is the major advantage from the AA Insurance promotion. The company is sponsoring the hospital’s Lifeline magazine which is published three times a year, and the promotion is also flagged in Great Ormond Street’s Christmas catalogue, as well as being sent out to cold mailing lists.
“We can be seen to offer a special insurance rate to supporters and staff (the promotion is attached to pay-slips),” Bartley continues. “The cost of the magazine is offset, and there is the mutual benefit of linking our long-established brand to another that has a good reputation.”
In future, the benefits for the hospital could increase if it secures the longer term relationship it is aiming for with AA Insurance.
“We want to boost our donor database to 250,000 by the year 2000,” explains Bartley. “We have not agreed access to names yet but this could be part of any longer term links between us.”
The acquisition of donor data through third-party deals is possible, but in his personal experience it is likely to be of poorer quality than a profiled lifestyle database, says Dueck. “Promotions can enhance brand understanding and awareness as they give the charity another chance to explain what it is trying to do,” he adds.
This view is endorsed by Bob Hand, managing director of specialist agency Affinity Solutions.
He highlights some more potential benefits. “People who support charities tend to be better off, so AA Insurance may be getting a better risk as well as building the brand. And the charity is drawing donors into a closer relationship with itself. It gets income, and added value for members.”
Great Ormond Street is well on the way towards, if not already achieving, national awareness: it gets extensive TV coverage, runs promotions linking with brands as diverse as Baby Bio and hardware chain Robert Dyas, and the licensing of its Teardrop logo, which from next week will feature on a range of George clothing, sold in Asda.
For charities who are still seeking that status, linking with a national brand is a simple way to achieve it. Breakthrough Breast Cancer tied with two companies when it joined Kellogg and Sainsbury’s in Kellogg’s national breakfast week, which started on September 9.
The concept of sponsored breakfasts was promoted in-store and on-pack, and to Breakthrough’s database. “We aim to become a household name like Kellogg and Sainsbury’s,” says Nicky Harris, the charity’s corporate fundraising manager. “Over 9 million people shop in Sainsbury’s every week so it was a huge awareness boost for us,” she says.
The scheme also has great potential for data gathering: respondents were asked to call a hotline number giving Breakthrough access to new names.
Ethical considerations are paramount, and all the charities contacted for this article happily reeled off a catalogue of names, usually headed by the tobacco companies, of unsuitable partners. Some charities go as far as drawing up a list of companies they will not consider.
Once links are agreed, charities insist on involvement from strategy to execution, even when they are not leading the promotion.
“We approve all copy and even get permission for photography to be used – everything has to meet our moral and ethical guidelines,” explains Bartley.
What is wrong for one charity, may, however, be right for an other. Environmental charities will not touch an oil company, but a charity for the elderly, whose supporters are less concerned about saving the planet, might do so. The reactions of the target market must be paramount.
“We rarely link with charities,” explains the AA’s Hadley, “because we have a concern about how the strategy is perceived by our members. Ultimately it is their money so any tie-up has to be logical and justifiable.”
Charities may have lost out in the past, says Dueck, because of their innocence. “Some used to be rather naive,” he says. “They were over the moon about being approached by a big brand seeing it as a foot in the door for themselves, without realising the full value of their name for that company.”
Most of the potential downside does appear to be in the charity corner, as Hand from Affinity Solutions explains: “If a charity is seen to be endorsing a product, and is stating that, it has to be able to prove why it is endorsing that brand,” he says.
Some of the cancer charities have got round this, and avoided the consumer view that the commercial organisation has somehow bought the endorsement by creating their own branded products. Sun creams are one example.
Then there is the danger inherent in longer term links that the partner company is subject to a takeover which changes its policies. Hand recommends contracts that allow for such contingencies to avoid the charity’s name being brought into disrepute.
On the client side there is also the danger that a major scandal in a charity could effect a sponsoring brand but this is far less likely. Even if the charity is in difficulties, a brand is still seen as helping it out. But charities are ultimately in a Catch 22 situation, forced to play in the commercial world, and compromised to some extent by their associations with it.
For companies charity links have to be relevant to the product group. Or in the case of community oriented initiatives, to reflect the section of its target market the company wants to be seen supporting.
Tesco focuses on the young and the elderly, says community affairs manager Jenny Gilmore. “We go for practical activities. But they still have to feel compatible with the brand and enhance it.”
The extreme caution charities display before agreeing to any deal explains why finding examples of disastrous promotional tie-ups is so hard. Suppression of disasters is unlikely – the media is not known for its caring, sharing approach. Indeed, it played a major role in the difficulties encountered by a charity for the elderly which was promoting pre-paid funeral plans.
When the company was taken over by a big US group, negative publicity about potential rising prices and American-style glitz and glamour funerals, was heaped on the unfortunate charity’s head.
But on the whole, third-party deals between charities and commercial organisations are mutually beneficial as each side gets what it wants, and is careful to ensure that its needs are met.
Altruism simply does not come into it.