(PRODUCT) RED - help or hindrance?

by amyjudd | April 21, 2008 at 11:07 am

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(PRODUCT) RED, which was launched in 2006, is one of the initiatives that the western world is using to try to help the people of Africa cope with the impact of HIV and Aids, and climate change. As Earth Day approaches tomorrow, (PRODUCT) RED comes under criticism for some of its business practices.

(RED), created byBono (U2 singer and activist) and Bobby Shriver, is a brand designed to engage business and consumer power in the fight against AIDS in Africa.

Africa - the poorest continent - is beset by climate change - flash floods, cyclones, and droughts, which are devastating the various economic, social and environmental systems.
Jesse Derris, who works for (PRODUCT) RED's public relations firm, Sunshine Sachs, says that (RED) "is helping the people of Africa on a day to day basis, by trying to end the fight against Aids, so that the people are better equiped to deal with other issues."
Mr Derris says "(RED) has raised over $100 million so far."
We look at what impact the initiative is having - and whether the products just help to heal rich westerners' consciences, or really are making a difference.
Mr Derris explains that (RED) "is not a company, it's a brand, and we work with other companies to create a recognizable brand that can be sold to consumers, and then at least 40% of the money from that product goes to the Global Fund."
The Global Fund is the world's leading program funder to fight Aids, which kills about 4,400 people every day in sub-Saharan Africa.
(PRODUCT) RED was started in 2006, by U2's frontman Bono, and his friend Bobby Shriver, and works with brands such as American Express, The Gap, Converse, Giorgio Armani, Motorola, Apple, and Hallmark. Their latest addition is a (RED) Girl Skateboard, designed by skater Eric Koston and artist Andy Jenkins.
However, since 2006, (RED) has encountered criticisms about the way they are donating money to Africa, and many critics say that they should just donate the money straight to the people of Africa, and not spend it on advertising the various products that are taking part.

In reality, it’s just one more example of the corporate world aligning its operations with its central purpose of increasing shareholder profit, except this time it is being cloaked in the patina of philanthropy. Buy a (RED) product and a portion of the purchase price goes to charity. But there is a question about what charities will lose in the long term.

Mr Derris is quick to jump to (RED)'s defense. "That's completely untrue," he says. "We don't spend money on advertising the (RED) products, our partners spend their own money to advertise. There isn't money allocated to advertising that could just go to charity, as we are not responsbile for any advertising."
The whole concept behind (PRODUCT) RED is to create a sustainable business that also helps those in need. Many support this viewpoint.

Certainly more cash could be donated if we just gave that money to the Global Fund, but then I wouldn’t have a shirt, Gap wouldn’t have made some money, and nobody would know about the Global Fund. Cause marketing doesn’t give the same infusion of cash as a straight donation, but it’s sustainable.

The trouble is, that critics of (PRODUCT ) RED are not able to come up with a better solution to raise the kind of money that (RED) has achieved so far.

Product Red has been criticized for not having an impact proportional to the advertising investment and being much less efficient than direct charitable contribution[4]and for having a lack of transparency with the regards to the amount of money going to charity as a percentage of every purchase.[5] Some critics argue that a retail middleman between donor and charity is unnecessary; donors should just give.[6] Other critics have pointed out that its emphasis on funding treatment for AIDS sufferers meant that large amounts of the money will ultimately end up with pharmaceutical companies.

Mr Derris says "we've had such success with the brand so far, and we are continuing to grow, so we must be doing something right. People will buy these products anyway so why not buy a recognizable brand item and help others?"

Ben Davis, of San Francisco, who created a Red parody online known as “Buy(Less),” thinks that people should give directly to nonprofits that support AIDS programs in Africa. “Increased consumption in America can’t be the only way to solve Africa’s problem,” Mr Davis said.

But is there a better way to raise over $100 million? A company like this will always draw criticism, but it appears they are making changes. As Mr Derris says, "all you have to do is upgrade your choice to make a difference."

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madnma

at 12:54 on April 21st, 2008

I'd always considered buying an iPod....and the idea behind (PRODUCT)RED really appealed to me. If I was going to buy an iPod, the fact that part of my £ would make a definite difference to such a global issue was a selling point...plus the fact I love the colour red :-)
I believe it's a great cause and am glad to have contributed even in this small way.

madnma has contributed a photo to this story.

Fuzzyshots

at 13:41 on April 21st, 2008

When my old computer died on me, I had no choice but to get a new one. I've read about Dell and its partner with (Product) Red. I then choose to purchase it knowing that Dell and Windows will make a contribution to the Global Fund. It's great having the opportunity to fight and eliminate AIDS in Africa without an extra cost!

Fuzzyshots has contributed a photo to this story.

NicaMom

at 14:03 on April 21st, 2008

I believe that we have the responsibility to take care of each other and (Product) Red gives us a very easy way to do so.

NicaMom has contributed a photo to this story.

FAITHDIDYOU

at 14:49 on April 21st, 2008

FAITHDIDYOU has contributed a photo to this story.

luckychelle7

at 14:59 on April 21st, 2008

Everyday we spend money on random products. It is nice to know that I am not only buying a product, but that I am also supporting a cause.

luckychelle7 has contributed a photo to this story.

colin_wright_photography

at 18:08 on April 21st, 2008

In my case, I was going to purchase an iPod Shuffle for use during my outdoor activities. Given that I was going to purchase one anyway, I elected to "vote with my money" and make an active choice that would result in a few dollars going to the PRODUCT (RED) cause that they otherwise wouldn't have received.

While I don't know if my sending a few dollars directly to someone in Africa would actually could make any kind of difference on any kind of sustainable scale -- assuming there was some front for collecting and distributing micropayments like those generated from individual sales of (PRODUCT) RED branded products -- it is my belief that the funds generated by the (PRODUCT) RED campaign ultimately will help, and likely on a broad, sustainable scale.

Filling someone's stomach with food for a few weeks from the equivalent of the proceeds of my purchase is a great thing, but I think I'd rather see broader improvements in the overall situation in Africa, and this product branding path -- though not likely entirely altruistic -- does seem to bear some fruit for the African continent that might otherwise have been missed.

colin_wright_photography has contributed a photo to this story.

EvilChick

at 22:47 on April 21st, 2008

Product (red) is a great idea. We need to buy clothes anyway, so what better than to have some of the money donated to this important cause? Also by wearing and using these products we remind people that the fight against AIDS has not ended and that we are committed to it.

hesmywatermelon

at 01:09 on April 22nd, 2008

I bought a Poduct (red) iPod beacuse i wanted to almost force a large multi national company to give to charity. We live in a world where we would rather spend hundreds or thousands on unimportant goods that dont contribute to our survival, yet millions of people in this world need money for Aids treatments.This was my middle ground- a way of giving money, and reminding these huge companies,and the world, that these people are important to us.

Ryan1524

at 14:24 on April 22nd, 2008

I think if they really wanted to be charitable for a good cause, they should donate a much bigger percentages of the product to the fund.

However, considering how vain people are these days, and the RED program is not only a charitable incentive, but also a good way of appealing to people's trendy/hipster side. Not to mention the better designs that a lot of RED Products come in.

I can't see anything wrong with it, except now some people can now act and feel righteous about themselves for simply buying something they would have to begin with, even without the RED branding.

Ryan1524 has contributed a photo to this story.

re_inspired

at 10:32 on April 23rd, 2008

Thank you for contributing to the dialogue surrounding cause marketing and Product Red. This style of marketing seems to be only gaining more traction, and goes nearly unquestioned. For some thoughts on these complex issues and what might be done in response, please see our website at: www.JoinRe.co Thanks AmyJudd -Ryan