The AIDS crisis in Africa is old news.
While governments are increasing spending on prevention and treatment programs, the situation is not getting much better, in fact in many cases, it’s worsening.
Lack of funding for anti-retrovirals continues to be the most devastating issue. In response, U2 frontman Bono and Kennedy cousin Bobby Shriver have launched Product Red in association with the Gap, Motorola, Apple, Converse American Express and Armani.
The principle behind Product Red is that companies pay to use the Product (RED) trademark, and a portion of the proceeds from the sales of products like t-shirts, cell phones, shoes and iPods holding the product Red designation go to the Global Fund. The Fund is a non-profit organization based in Switzerland aimed at eradicating AIDS, Tuberculosis and Malaria.
This type of Cause marketing also called virtuous consumerism isn’t new. In the 1980s American Express took up a campaign to donate a percentage of the money spent on their cards to a fund aimed at sprucing up the Statue of Liberty. More recently, the Pink Ribbon Campaign has employed the same formula to raise money for breast cancer research.
For corporations a campaign like Product Red is a marketing coup. They get increased publicity, improve their bottom line and gain a corporate “halo” in the process. For companies like the Gap and Converse parent company, Nike, Product Red is the perfect fit. Not only does it promote the brand, but it also puts them in a new light. Considering that both have come under fire for their abusive work conditions and questionable employment practices, Product Red makes them seem like the solution rather than the problem.
Apple’s ad campaign declares that their Product Red iPod “Sounds good does good” and according to Motorola Product Red is: “Where desire meets virtue.”
Predictably, Hollywood heavyweights like Chris Rock and Steven Spielberg are
lending their names and faces to the product red campaign to give it more exposure and up its cool quotient. Not to mention giving themselves a little more altruistic appeal in the process.
In the words of Bono: Product Red is a “Win-Win.”
While this may be true, and the Product Red campaign does seem like a noble cause at first glance, it is unclear how much of the proceeds are actually going to fight AIDS. This information is not easily available.
When asked, Tara Wickwire, Sen. Public Relations Manager for Gap Inc., said that up to 50 per cent of profits from Product Red merchandise will go to the global fund.
In reality, this can mean anywhere from 1 to 50 per cent of the profits. Because Product Red is a trademark used under license and not a charity per se, companies decide internally how much of their net profits will go to the Global Fund.
So on a $350 shoe like the limited edition “African Mudcloth” Chuck Taylor put out by Converse, about 15 dollars goes to the Global Fund to fight AIDS, TB and Malaria.
After administration costs, only a few dollars actually makes it to those in need.
This makes Bono’s declaration that Product Red is a Win-Win seem like a bit of an overstatement.
From a business perspective, Product Red can be viewed as either an ingenious way to exploit suffering to sell a product, or a socially responsible means of making money. Either way, the fact remains that Product
Red is not a charity, it’s a business model. At the end of the day, Product Red will likely raise a great deal of money to help people suffering with HIV/AIDS, it will also likely give consumers a warm fuzzy feeling when they charge their cards for the newest gadgets or garb. But what does it say about our society when we need to be rewarded for giving. Is Product Red simply another nail in the coffin of altruism?
Would it not be more effective to simply donate to a legitimate and well-administered charity, giving those in need the full benefit of the
money instead of lining the coffers of already wealthy multinationals?
If you do buy Product Red, try not to let yourself get too carried by the warm and fuzzies. Because when you get down to it, for corporations taking part in the campaign, Product Red is just another way to make green.