Why Is Cause-Related Marketing So Important? For Many Brands, the Answer Is Y

BusinessDictionary.com defines cause-related marketing as, “Joint funding and promotional strategy in which a firm’s sales are linked (and a percentage of the sales revenue is donated) to a charity or other public cause. However, unlike philanthropy, money spent in cause-related marketing is considered an expense and is expected to show a return.”

A recent AdAge article pointed out some statistics from two studies that highlight the importance of cause-related marketing.

The first study mentioned was the 2012 Sponsorship Report by IEG Consulting. According to that report, cause-related marketing in North America is projected to grow 3.1% this year to $1.7 billion.

The second study mentioned in the AdAge article was the 2010 Cone Cause Evolution Study. That study pointed out that in 2010, 83% of Americans over the age of 18 wished that more of the products, services and retailers that they use would support causes.

The last figure alone should help brands understand the importance of cause-related marketing.

For brands that sell products and services that are targeted to Gen Y consumers, cause-related marketing might be even more important.

Cause-Related Marketing and Gen Y

Generation Y (Gen Y), also known as the Millennial Generation (or Millennials), are particularly interested in supporting brands that support the causes that they care about.

In a blog post on blog.barkleyus.com, Jeff Fromm, SVP of Sales, Marketing & Innovation at Barkley, points out that, “This generation’s purchase decisions are heavily influenced by their opinions of a company’s cause marketing initiatives. They also value charitable contributions via cause marketing because of the ease of participation and the scope of impact that a corporate-based charitable program can have in comparison to an individual donation.”

Fromm goes on to mention that showing Gen Yers that the brand cares is critical for brands that are searching for ways to engage and tap into this generation of consumers.

Kit Yarrow, Ph.D., and Jayne O’Donnell also emphasize that cause-related marketing is important to Gen Y consumers.

In their book, “Gen Buy: How Tweens, Teens, and Twenty-Somethings Are Revolutionizing Retail,” (affiliate link) they state that, “Indeed, one of the more popular means of getting close to Gen Yers is through their interests and their favorite causes. Gen Yers, in part by virtue of their age but also because of our more superficial society, are yearning for purpose and want to belong to something bigger than themselves. They are often genuinely attuned to and passionate about causes, but there are other reasons why this technique has worked so well. Causes also add purpose and meaning to shopping—and sometimes just enough added benefit to rationalize a purchase. Being seen by others as being passionate about a cause is en vogue—and it unites people together.”

Yarrow and O’Donnell also point out that, “Businesses that support causes also appear to be more compassionate and socially responsible than those that don’t, which is reassuring and a stamp of quality to Gen Yers. Many Gen Yers make it their business to support the brands and retailers that they perceive to be good to their employees, good for the environment, or doing something good for the world.”

Final Thoughts

Cause-related marketing can potentially be a win-win-win for the cause, the brand, and the consumer.

The cause/nonprofit organization that the brand partners with gets support in the form of money or other resources.

The brand will hopefully get an image lift with consumers by being associated with the cause, which should translate into increased sales. (Note:  Cause-related marketing could potentially backfire if the brand comes off as insincere or hypocritical. As the AdAge article points out, brands also might not receive the desired results if the cause is not aligned with the target market.)

Finally, if the cause-related marketing campaign is properly executed, consumers benefit by being able to feel like they have made a difference as a result of making a purchase. In the process, they get a positive feeling about themselves and the brand.

As shown, Gen Y consumers are extremely receptive to cause-related marketing campaigns for many reasons.

Gen Yers are also very comfortable with technology and social media, in particular.

Therefore, if a cause-related marketing campaign resonates with them, there is a good chance that they will let others know about it online. In other words, cause-related marketing could potentially generate positive word-of-mouth mentions.

This is why brands that are trying to reach Gen Y consumers should consider adding cause-related marketing to their marketing mix.

Photo credit: becomeunreal on Flickr.

Chad Thiele

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.