Recently I spoke at a conference on cause marketing trends and best practices. It’s always fun to present, but I deem a presentation successful if the attendees are engaged and ask lots of questions. At this session I was not to be disappointed. One question that popped up and generated a great deal of good discussion was “What is the difference between sponsorship and cause marketing?”.
In my perspective, the difference between the two is simple. It’s in the tactics and the benefits of each execution.
Let’s look at cause marketing
Let me start with my definition of cause marketing. This sets the stage for differentiating between these two growing forms of corporate community involvement - methods that go beyond traditional corporate philanthropic donations.
I define cause marketing as a mutually beneficial business and nonprofit partnership that sees a company put the power of its brand and marketing behind the cause to generate profits for both. In cause marketing, the company uses the cause as the focus of its marketing tactics. Think the traditional 4 P’s of marketing: product, price, promotion and place. Product ties to a cause. Price includes a donation or percentage to the cause. Promotion focuses on the cause connection. Place reaches consumers in an untraditional way and place with cause messages often supported by in-store point of purchase advertising.
The company’s expectation is that it will directly earn profits from the affiliation. The cause tie helps the product and company to stand out in the crowded marketplace. It demonstrates an alignment with the company and customers’ values. Research proves that if price and quality are equal, the cause differentiator will (in more cases than not) result in a sale.
Sponsorship on the other hand …
Sponsorship sees companies providing financial contribution to a nonprofit event or program. In return, the nonprofit uses its marketing and communications tools to promote a company’s involvement and support of the cause. The tools could include featuring the company’s logo on a poster, t-shirt, brochure or other nonprofit marketing and communications material. In the end, it’s really just another marketing and promotional tool for the company. Similar to the way TV advertising or social media is used to reach a distinct audience.
Profits, on the other hand for the nonprofit are less ambiguous. They receive a payment – in the form of a non-tax receipted contribution. It is essentially an advertising expense paid in a commercial exchange for a corporate recognition tied to the cause. Benefits for the company come in the form of reaching a target audience in a unique way and creating community goodwill. Neither is seen as a competitive advantage that will guarantee a sale. Generating corporate profits are less direct than in the case of cause marketing.
The difference is clear, but can still be blurry
While my definition clearly differentiates between the two business-cause partnerships, there are occasionally blurry lines. Take Komen Race for the Cure® and Yoplait’s involvement.
Yoplait has been the main sponsor of the race for a number of years. Komen promotes their support through the organization’s various race marketing and communication vehicles. Yoplait’s logo can be seen on the Komen Race for the Cure® t-shirt. It is featured on the poster and as in the picture the on-site race banners. However, during the month of October, Yoplait parallels its race support with a cause marketing in-store promotion – “Save Lids, Save Lives.” People see both. Some call their support “sponsorship”. Others call it “cause marketing”. In fact, it’s a smart use of both that leverages Yoplait’s cause involvement in the breast cancer movement. By doing so, it turns the entire involvement into something that is bigger than the sum of individual parts.
In the end, both cause marketing and sponsorship are commercial, mutually beneficial relationships between companies and causes. We know both are growing. When done right, they provide powerful shared value and reflect shared values.
