The Millennial Generation (those born between 1982 and 2003) is expected to be the largest and most ethnically diverse generation in American history. One of the strongest characteristics of this generation, as thoughtfully outlined the book “Millennial Makeover”, is their civic minded attitude with a fervent orientation for engaging with others (individuals, non-profits, government and corporations) to create meaningful social-economic improvements.
Managing this change is important for brands looking to engage with this new generation of customers. The Cone Cause Evolution Study, an online study completed by Cone LLC a strategy and communication agency (and member of the Omnicon Group), further illustrates this new environment:
- 83% of Americans say that companies have a responsibility to help support causes.
- There was a “dramatic increase among both men and women who say they consider a company’s support of causes what to buy or where to shop”
- 85% of Americans would consider switching to another company’s products or services because of a company’s negative corporate responsibility practices.
- 88% of Americans want to hear more from companies about their cause efforts and advertising is the preferred method of communication.
As the report summarizes: “American’s expectations of companies are at a all-time high. Cause is no longer a “nice to have”, it is a “have to do”….doing good has become an expected business strategy.”
At first glance, it doesn’t appear the large brands are listening. Several weeks ago Giving USA released their annual report breaking down charitable giving by donor type (individual, foundation, corporation, etc). Charitable giving reached a record $306B in 2007. Yet, individual giving represented the lion’s share of donations with over $250B (or 82%). Corporations, meanwhile contributed only ~$16B to charities, representing 5% of all giving. As it turns about, corporate giving has consistently been less than 10% of individual giving. Many companies are clearly following Milton Friedman’s view the that the “social responsibility of business is to increase it’s profits”.
Thankfully, for many brands the commitment to “doing good” goes beyond their charitable contributions. An ecosystem is developing around Corporate Social Responsibility (CSR). In addition, brands have started to look at their advertising budget to create a more emotional relationship with their customers through programs traditionally aligned with the field of “Cause Marketing”. There have been a number of interesting and successful applications in this space. However, today the Cause Marketing industry is believed to represent less than 1% of the entire advertising market (estimated to be ~$300B). (Note: I am not a big fan of the "cause marketing" moniker as it is self-defining and limits what can be a broader set of customer engagement strategies).
Brands are contributing only 5% of all charitable giving, and using less than 1% of their advertising budgets for "cause" related efforts. Yet, it is unmistakable that consumers want and expect more.
In an environment where the old axiom - "half of my marketing works, I just know which half" - still holds true, it's time for brands to look at both $300B markets (charitable giving and advertising) and reconsider their investments in time and money. The opportunities to deeply engage with customers and drive effective marketing spend (to drive higher profits) while impacting community and social change are becoming too large to ignore.
Will - thanks for sharing. Let's hope the brands do see this opportunity
Posted by: Jon Anders | July 14, 2008 at 08:15 PM