Corporate Philanthropy: Good for Business?

by Stacey Alexander on August 1, 2011

in Social Media

Post image for Corporate Philanthropy: Good for Business?

A lot of businesses are starting to use their resources for social good. This act may not be new, but the broadcasting of it through social media is. Although it gives us warm, fuzzy feelings, the question is, “Does it actually work as a marketing strategy?” I’m not going to answer that question in this post. Because I’m not sure I know the answer. What I do know is that I have a lot of questions.

‘Like’ Campaigns

If you need a refresher on some of these campaigns, think back to this past holiday season. Facebook ‘Like’ campaigns seemed to be everywhere. OnStar gave $1 to fallen police officers’ families for every like. American Express donated to a charity that helps young girls gain confidence. These are good causes, but what kind of ROI did they bring? New fans, hopefully, but what is a fan worth to OnStar and American Express?

Healthy Choice

Recently, as many of you know, a handful of members of the Media Two family shaved our heads for St. Baldrick’s. During our campaign to raise money for the effort, our friend Gregory Ng helped us by bringing us on his web show, Freezerburns. Healthy Choice sponsored the episode, tweeted and posted on Facebook to promote the episode, and even donated $1000 to our cause. I know that I have a hard time looking at any frozen meal other than Healthy Choice these days. I feel a connection, a sense of loyalty to them. But did their philanthropy afford them any significant increase in sales?

Pepsi

A large scale corporate philanthropy effort in the last year is Pepsi’s Refresh project. This project, which they’ve renewed again this year, goes like this: People submit their ideas for make the world a better place, and Pepsi grants some of them funding for their projects based on votes each project acquirs. Mashable has a whole list of stats on things this project accomplished from last year’s run. Things like:

  • 26 parks and playgrounds that have been built or improved.
  • 54 schools that have been improved.
  • 23,000  volunteers involved in the Project.
  • 3,800 animals that have been saved or treated.

These are all really great things, and I don’t want to diminish that. But did Pepsi see an increase in sales because of this project?

Conclusion?

I’ve had a hard time finding case studies on the results of corporate philanthropy’s effect on the bottom line. As much as I love companies giving back, I’m wondering if it leads to additional sales, which is of course the only reason a company is in business. There’s a quote I really like by Martha Rogers: “If you don’t have a customer, you have a hobby.” Although the direct goal of social media may not be sales – engagement and connection with fans, customer service, market research – they all lead to sales. Otherwise, you have a hobby. And the last time I checked, the bank doesn’t take that as payment for your mortgage.

I’ve heard a comment or two that this practice is more of what’s now expected of companies, and not really something that sets you apart and increases sales. I’m still on the fence.

What are your thoughts on corporate philanthropy as a marketing technique? Do you have any hard case studies to support or refute it? I’d love to see it! Please add it to the comments.

Photo by Robo Android

{ 2 comments… read them below or add one }

Morgan Siem August 1, 2011 at 1:08 pm

I’d say that these efforts align with branding initiatives rather than direct marketing campaigns. I wouldn’t recommend a tactic like this for a brand that’s really focused on driving more sales in the short-term through online marketing. I would, however, say that it can work (when done right). Personally, I would say that I make it a priority to be a highly informed consumer. I do my best to support brands that are environmentally and socially conscious. If I’m deciding between similar products, the brand that has put resources toward improving the world will win my purchase. So, these efforts matter and they affect a brand’s bottom line, however, they’ve got a more lengthy sales funnel – which often makes it harder to track back success metrics to the actual campaign.

Reply

Barbara Maloney Barbara Maloney August 5, 2011 at 2:47 pm

Great post Stacey! Like you mentioned I feel that it is hard to really believe that a philanthropic act, such as the Pepsi Refresh project, will generate more sales.

Always nice to see companies doing good things though!

Reply

Leave a Comment

Want to add a picture to your comments here on Media Two Point {OH}? Upload your picture at Gravatar to make it happen.

Your comment may be nofollow free.

Previous post:

Next post: