Indirectly, cause marketing is used to signal a company's corporate social responsibility. But ultimately, it is used to boost the bottomline. Is this an effective marketing strategy, or do consumers dismiss this as a mere promotional tactic?

Research conducted by Barbara Kahn of the Wharton School, University of Pennsylvania, and me at Graduate School of Business, University of Chicago, investigated whether associating with good causes can help corporate sponsors improve consumer attitudes toward their company. We found that sponsorship activities do indeed help the sponsor's image, but the way in which managers promote their corporate sponsorships can significantly change the public's feelings about the company.

The research points to recent evidence proving that today's consumers are extremely value conscious and are eager to patronise businesses that share their own values and ethics. Media attention on consumer protests against socially irresponsible corporations has caused upper management to develop new socially responsible business activities: cause-related promotions, advocacy advertising, alliances with non-profit organisations, socially responsible employment and manufacturing practices, and corporate volunteerism in community activities.

But there is an on-going debate in the business community about the effectiveness of cause-related marketing, especially when the sponsor's self-interest is transparent to consumers. Some managers believe that notwithstanding sponsors' self-interest motives, consumers are swayed by causes that they care about and they appreciate the opportunity to share in charitable deeds by supporting sponsoring companies. Other managers, however, are cynical of cause-marketing efforts, saying that today's consumers are savvy enough to see through such marketing gimmicks. These critics worry that consumers view such campaigns as manipulative, so that these ``good'' efforts may even boomerang, resulting in negative perceptions of sponsors.

The study
The study focussed on two types of philanthropic sponsorships that are popular among cause marketers: (1) cause promotions that promise a donation to a charitable caused based on a purchase of the company's product and (2) advocacy advertising of social issues that are sponsored by companies. A cause promotion message may say, for example, ``Buy a box of our high fiber cereal and we will donate a percentage of the sale to heart disease research.''

In contrast, an advocacy advertisement message may focus on promoting methods of fighting heart disease (by eating healthy or exercising more). In the latter case, the message usually features the philanthropic cause prominently and merely identifies the company's product or logo as the sponsor in an understated manner. The ultimate goals of the two sponsorship activities are similar: (1) to raise awareness and/or funds for the social cause, and (2) to benefit the sponsor.

Courting consumer opinion
The research suggests that consumers respond differently to the two types of sponsorship message even when they are both promoted by the same company and are centered around the same philanthropic issue. We found that all other things being equal, cause promotions yielded higher ratings of corporate social responsibility than advocacy advertising. This result is because of the difference in how extensively consumers scrutinise the sponsor's motives for promoting the social cause.

Consumers tend to view cause promotion messages as ``business-as-usual'' advertisements since the appeals are linked to the companies' products and are clearly designed to increase sales by using the cause as a purchase incentive. In general, people accept these messages readily without much scrutiny of the sponsoring company's intentions or motives for engaging in the sponsorship. But in advocacy advertising, the focus is primarily on the philanthropic message and is divorced from the sponsor's central business activity. This dissociation often surprises consumers and they are therefore more likely to elaborate on the appropriateness of the sponsorship. This scrutiny usually results in less positive corporate social responsibility evaluation for the sponsor, leading to lower benefits to the sponsor from an advocacy sponsorship relative to a cause promotion message.

We also found that when consumers do scrutinise potential motives for a sponsor company, they use simple investigative heuristics or rules to judge the appropriateness of a company's sponsorship action. They rely on the level of congruence or correlation between the sponsor and the philanthropic activity in order to decide whether it is appropriate for the company to engage in a specific sponsorship. Perceived fit is higher when the domain of corporate sponsorship activity is seen as more connected to the company's area of knowledge, expertise or consumer segment base. For example, consumers would rate perceived fit as higher if Johnson & Johnson were to sponsor a message on child safety than if the same company were to sponsor a message on environmental pollution. Increasingly, perceived fit affects sponsor evaluation very differently in the two types of sponsorship activities studied and can have a big effect on cause marketing success.

For advocacy advertising, where consumers focus primarily on the cause message, higher ratings of corporate social responsibility are obtained if there is a lower level of perceived fit between the sponsor and the cause. In other words, the sponsored action is more appropriate and perhaps more believable when the sponsor does not appear to have a vested interest in the philanthropic cause.

On the other hand, for cause promotions, where the focus is on the sponsoring company or brand, higher ratings of corporate social responsibility were obtained if there is a higher correlation between the sponsor and the selected cause.

A product to purchase
Can sponsorship of social causes improve individual product ratings as well as overall corporate image? We found that when the domain of corporate sponsorship activity is related to the company's products (i.e. there is high perceived fit between sponsor and cause), sponsorships also improve product ratings on cause-relevant attributes. For example, an herbal product company that sponsors the cause of rain forest protection would be able to strengthen consumers' beliefs in the herbal and natural ingredients in its products.

Ratings for product attributes are also higher for cause promotions than for advocacy advertising because the focus of cause promotions is on the product, whereas in advocacy advertising, the product is usually understated or under-emphasised.

Good cause for study
From a public policy standpoint, the debate over corporate philanthropy is very important. Unless companies feel that they can benefit from their philanthropic activities, they are unlikely to contribute to promoting social causes-an issue that is gaining in importance as non-profit organisations face dwindling growth in donations. This research shows that companies can indeed do well for themselves by undertaking cause-related promotions that are closely tied to their product attributes. However, if companies wish to sponsor advocacy advertisements rather than cause-related product promotions, they would benefit more if they selected social causes in which they have no vested interest so that consumers do not dismiss their actions as selfish and insincere.