• by Jack Feuer , August 24, 2006

Earlier this year, a segment on Dr. Phil's TV talk show featured Melissa, a teenage girl whose parents' chronic substance abuse had kept her and her little sister on the move since early childhood. She essentially had to take care of her parents and raise her little sister. Through all the drama, though, Melissa did so well in school that she earned a half-scholarship to Stanford University.

Heartwarming, no? Advertisers thought so too, and jumped in to show their humanity. Dell supplied the young lady with a computer, which appeared on the set and was identified by an announcer. Bed, Bath & Beyond gave her a $500 gift card, also touted on air. There was a gift card to Macy's.com, plus at least a 10-second showing of products on the air. The WBNA's Los Angeles Sparks offered the girl, who wants to go into sports marketing, a basketball, a jersey, and an internship.

But Ditech took the grand prize. The chairman of the lending company came on the air with a big blownup check for the soon-to-be Stanford undergrad in the amount of $50,000. If you add up the Ditech spot, the graphic, the slogan, and the 800 number that aired, that $50,000 probably translated into $450,000 worth of airtime.

That's some savvy media dealmaking. But how do you measure cause-related marketing initiatives like these, or any number of other do-good marketing and media programs? Is it even possible to quantify the feel-good ROI of having Dr. Phil gush at length about Ditech as a company with heart and soul?

Are cause-related media programs sustainable? And how do you measure business results? Arriving at answers to such questions is becoming more pressing as cause marketing and media strategies are increasingly deployed, involving all aspects of marketing communications, including media agencies.

Cause-related marketing as a distinct entity is barely 20 years old, but it's growing fast. U.S. sponsorship spending on cause marketing will reach just over $1.3 billion this year, two-thirds of it in the sports category, according to the IEG Sponsorship Report. That's in a discipline that in 1990 only accounted for $120 million in spending.

The Ad Council, the nonprofit group that is the biggest creator of public service ad campaigns, generated $1.8 billion in donated media last year, the most in its history, and currently runs nearly 50 different campaigns. George Perlov, senior vice president for research and evaluation, estimates that total donated ad spending for cause-related marketing efforts in the U.S. is in excess of $12 billion.

And that amount is poised for growth: The Ad Council recently announced a $300 million "kids safe" TV viewing campaign with the Motion Picture Association of America, the National Cable Television Association, the National Association of Broadcasters, the Consumer Electronics Association, and the ABC, NBC, CBS, and Fox TV networks, along with satellite providers DirecTV and Echostar. The partners' donated ad time will result in public service ads that will run on TV, radio, the Web, and in print over an 18-month period. Created pro bono by McCann Erickson, New York, the ads feature humorous scenes in which parents take steps to protect their children from exposure to inappropriate behavior.

For marketers, no matter how pure their motives, cause efforts are intriguing business tools. This has been true at least since 1983, when American Express raised $1.7 million for the Statue of Liberty restoration project, generally considered to be the beginning of modern cause marketing. In addition to helping Lady Liberty look her best, the effort resulted in a 28 percent increase in consumer credit card use during the campaign's run.

Scott Beaudoin, vice president at Cone, Omnicom's Boston-based cause-marketing unit, says: "I work with all of these brand managers every day, and at the end of the day, the long-term life of the program will be very short unless you can show it helped sell product."

A 2004 survey conducted by the Center for Corporate Citizenship at Boston College and the U.S. Chamber of Commerce Center for Corporate Citizenship found that more than 80 percent of business executives polled said good corporate citizenship helped their bottom line, with more than half saying that expectations from customers and consumers were motivating factors.

Certainly, as Beaudoin says, "more children fed and playgrounds built" constitute one form of ROI. Indeed, Cone is developing an ROI tool for cause marketing that measures results from both the social and business angles, "not just the promotional or advertising [value]," says account supervisor Mindy Gomes Casseres. "It may include things like employing volunteerism. Those people become advocates for the brand. There's increased employee productivity. You can look at [ROI] from a lot of different facets. It's cross-functional."

"This is much more about the CRM [customer relationship management] aspects of media outreach than it is about the media placement aspects  CRM can go to heart and feelings; traditional measured media has a tougher time doing that," says Arthur Anderson, principal in New York consultancy Morgan Anderson.

"There are lots of opportunities to measure, if you think of cause marketing as customer relationship marketing rather than traditional media," Anderson adds, listing those opportunities: "Increased contributions associated with an e-mail, banner ad, etc.; number of responses to volunteer to a particular call for help; awareness/consideration improvements relative to a specific cause; number of people reporting that they took action as a result of some e-mail or telemarketing request."

Singing for Shelter

One of the oft-cited examples of best practices in determining cause marketing ROI (IEG called it a "textbook case") is Whirlpool's 2004 tie-in with Habitat for Humanity and country music artist/TV star Reba McEntire. Faced with a slow-growing marketplace driven by price, not loyalty, the appliance maker decided to integrate a cause marketing component into its brand-building efforts. The company was already in a five-year relationship with Habitat (donating $25 million worth of refrigerators and ranges to Habitat homes over the five-year period), but had not previously considered the tie-in a brand-building tool.

Research, however, showed that social responsibility was among the top five loyalty drivers for consumers. So the marketer sponsored a 30-city tour with McEntire singing for Habitat that featured tents emblazoned with the Habitat logo at the concerts, in national TV, radio, and print advertising, and in employee and public relations components.

The program resulted in an across-the-board increase in loyalty among consumers who had been exposed to the campaign's advertising versus a baseline loyalty study, John Alexander, Whirlpool North America vice president and general manager, told IEG. Overall, he says, "The CLI [customer loyalty index] rose from the baseline study's 15 percent to 28 percent." On its Web site, Whirlpool's online visitors averaged a CLI of 22 percent, but those who saw the TV ad and then went to the site had a CLI of 37 percent.

Not bad for a little cause tie-in. It's not surprising, either, that in employing this tactic, marketers are drawing from a wider pool of communications areas than ever before.

Goodwill Channels

Until now, growth in cause marketing has been fed by advertisers looking to do a little good and reap some goodwill, as well as creatives at agencies looking to strut their stuff with impactful public-interest campaigns. The Ad Council has been the birthplace of some of the most famous campaigns in the history of advertising: "A Mind Is a Terrible Thing to Waste," "Only You Can Prevent Forest Fires," and "Take a Bite Out of Crime."

But increasingly, cause is a team effort, with every area of marketing participating. Executives say that media agencies are brought in more often to assist on cause campaigns and specialty shops like Pic-TV and Cone are asked to pitch cause ideas as part of new-business teams.

The Dr. Phil tear-fest, for example, wasn't spearheaded by a creative shop, the client, or a specialized cause marketing agency. Rather, Dr. Phil's production company came to Pic-TV, the unit of Interpublic's Initiative Media that plans and places 10-second promotional spots, close-captioned sponsorships, and wish fulfillment, to negotiate the deal. "Media agencies do play a role in cause marketing," says Pic-TV president and CEO Steve Berger. "They have good contacts with shows and producers and can get things like this written in."

The Ad Council includes several media agency executives on its board and has worked with Carat on targeting and other media strategy issues. At the end of 2004, Carat was asked to help determine ways to "better target how the Council is doing," recalls Rob Frydlewicz, former vice president, research at Carat Insight, who's now a New York-based media consultant.

"They told us the type of person they were seeking, and we agreed to develop targets for each one that we had information on in our MRI database  like people who love American history, that sort of thing," Frydlewicz relates. "Then Charlie Rutman [Carat USA's president] jumped at the opportunity. And our client Pfizer was also a big proponent of the Council's work."

The Ad Council's Perlov says "groups like Carat have helped us get tighter audience targets and more efficient partnerships with the media." They've also eliminated some absurd examples of waste: Frydlewicz recalls one unanticipated consequence of the effort, when a receptionist at a network decided not to run one pro bono campaign because she said the advertising "just didn't move me."

In a media marketplace obsessed with communications channel-planning, engagement, and other non-quantitative objectives, cause-related marketing and media shows promise as a consumer channel. "Any place that a consumer can be exposed to a message is fair game," Frydlewicz notes, adding, "The attractive thing with channel-planning is the creativity it allows. And after our experience with the Ad Council  they were so excited and receptive  one could probably be much more creative with them [on media strategy]."