CSR Advertising | Doing good to look good11 min read . Updated: 13 Jan 2008, 11:11 PM IST
CSR Advertising | Doing good to look good
Consumer electronics company TCL India Holdings Pvt. Ltd, a subsidiary of China’s TCL Corp., launched a health awareness campaign in December through which it offered free health check-ups for consumers who visited any of its 24 retail branches in India. For a company that sells television sets and air conditioners, this new focus on health is part of its marketing strategy to differentiate itself from other consumer durable players in the market, and appeal to consumer mindsets.
“If you want to stand out in the market, you have to sell yourself in ways that interest consumers, and health consciousness is gaining importance among Indians today," says Sudhanshu Bhandari, assistant marketing manager, TCL. “Besides, no other consumer durable player has taken a stand on health," he adds.
Like TCL, several other companies are marketing their brands around social issues that appeal to consumers and strike an emotional chord.
“Social awareness among consumers is going up. They (consumers) are also feeling exploited by commercial messages that are ‘in your face’ at every touch point," says Sunder Raman, managing director, MindShare, a leading media buying agency.
This concept first became popular among fast moving consumer goods (FMCG) firms such as Hindustan Unilever Ltd (HUL), ITC Ltd and the Procter and Gamble Co. (P&G) that advertised their company’s cause-marketing initiatives which involved donating a certain percentage of sales on select items towards a social cause.
ITC’s Aashirwaad brand of wheat and flour, Sunfeast biscuits and Classmate stationery have supported rainwater harvesting, afforestation and rural education through cause marketing, while HUL’s Surf Excel and Pond’s cream promoted education through scholarships and fought for women’s empowerment through a collaboration with the United Nations Development Fund for Women (Unifem).
But now companies are carefully choosing the initiatives they advertise as a means to counter public perception of unfavourable practices that have been linked to their businesses.
For instance, cola companies that have been blamed for depleting water resources and exploiting child labour have messages that counter such perceptions. Coca-Cola India Inc.’s recent “Drops of Joy" campaign features an emotional narrative from one of the 80 men of the Benares Deaf and Dumb Institute who have been given employment as bottle inspectors at Coca-Cola’s bottling plant at Varanasi. And rival PepsiCo India Holdings Pvt. Ltd is also in the process of seeking approval from its head office to roll out a campaign based on its corporate social responsibility (CSR) activities on water and waste management, a senior executive of the company, who did not wish to be named, confirmed.
“Many of our initiatives are centred on water harvestation because water is an important input resource for our business; and there is a certain expectation from the community and our stakeholders to replenish what we use up," says Deepak Jolly, vice-president, public affairs and communication, Coca-Cola India.
Similarly, companies that are associated with consumption of fuel and energy push their brands on the platform of conserving these. Honda Siel Cars India Ltd’s new brand message is “Nature rides with Honda", which is supported by a television commercial that speaks of its safety features and fuel conservation. “Through this advertisement, we wanted to publicize our corporate brand direction of safety, environment and energy conservation," says Jnaneswar Sen, senior general manager, marketing, Honda Siel Cars.
SKF India Ltd, a supplier of industrial bearings, in its latest print advertisement showed a toddler riding a toy car in lush green fields with the tag line, “We’re driving India to a cleaner future."
“Our business involves a lot of burning of steel. So we’re constantly working on ways to reduce carbon monoxide emissions and develop low-emission bearings. Through our advertisements, we are conveying to the media and our consumers that SKF believes in sustainability and concern for future generations," says the company’s spokesperson.
Electrical products company, Havells India Ltd uses the back of autorickshaws to spread its message: “Save energy, save Earth".
Some companies, meanwhile, are adopting social activities so that they can build a better connect with their consumers. Tata Tea Ltd, a tea manufacturing company, for instance, believes that one of the best ways to connect with consumers is to address issues that matter to them. The company recently tied up with the Jaago India Foundation—a Mumbai-based social awareness organization launched in October by Maverick Media Ltd, a production house—for an online initiative targeting youth on social and environmental issues.
Tata Tea then launched an aggressive marketing campaign called “Jaago Re", which includes a 40-second television commercial and six smaller ones, along with initiatives on print, radio and outdoor media. “We believe tea has an awakening effect on people and that is also the main objective of the Jaago India Foundation. In tying up with the foundation, we felt it would be the best way to connect with our consumers while leveraging on the benefits of our product," says Sushant Dash, deputy general manager, marketing, Tata Tea. The tie-up with Jaago India Foundation would serve as a “long-term CSR initiative," adds Dash.
WorldSpace India Pvt. Ltd too sought to build a socially conscious image through its Go-Green Initiative launched in October last year. The global media and entertainment company promoted a five-point action plan that would lead to a healthier environment. The campaign was promoted not just on air waves but also on the Internet and through on-ground events.
“The team at WorldSpace raised money to plant trees. In addition to making socially relevant programming, our team substantiated their thoughts with action by successfully planting 1,000 saplings," says Harshad Jain, chief marketing officer, WorldSpace.
Apart from reaching out to consumers, industry professionals believe that social advertising also helps firms get better noticed by relevant trade bodies.
“Compared to a decade ago, there is a realization among corporates to address societal issues. It is a Page 3 phenomenon on the corporate front, where these companies want to be recognized by (the) government and trade bodies for the work they do for the betterment of society," says N. Bhaskara Rao, chairman, Centre for Media Studies.
This is true for ITC, which has just launched a newsletter Enduring Value, a compilation of the publicity the company has received on its CSR activities as well as information on the progress of its ongoing activities. The newsletter will be sent to a select 5,000 people including policymakers, stakeholders and industry professionals.
Industry experts believe the reason behind the sudden surge in social advertising is that marketing wars on the basis of quality, technology and price have not succeeded in a fiercely competitive market, thereby pushing companies to address social issues as a product or service differentiator.
In the absence of distinct value propositions, cola companies Coca-Cola and PepsiCo in 2002 waged a price war by cutting prices of colas and other flavoured drinks. Soon, the FMCG industry witnessed price wars when P&G cut prices of detergents Ariel and Tide by up to 50% and Hindustan Unilever had similar price cuts for Surf Excel. The price war soon spread to shampoos and soaps and other products.
“After getting bruised by fighting competition with low prices, companies then started a war based on quality which ended in controversies and unpleasantness," says Preeti Reddy, head, consumer insights division-mindscape, Technopak Advisors Pvt. Ltd, a management consulting firm. “And now companies are communicating their social responsibility to create preference and empathy amongst consumers so that they favour their products and services," adds Reddy.
Consumers are demanding more than products and services from their favourite brands. “Nowadays, stakeholders, including consumers, evaluate companies not only on their financial success but more on what they do for the community at large," says Coca-Cola’s Jolly.
In agreement is ITC’s spokesperson, who says, “Companies that walk the talk in meaningful CSR interventions are valued more by stakeholders." Enlightened consumers tend to favour products and services of those companies that are perceived to be socially responsible, he adds.
According to the 2007 Cone Cause Evolution Survey, more than two-thirds of Americans say they consider a company’s business practices when deciding what to buy. The study also indicates an evolution in consumer thinking about the ways businesses interact with society.
“Customers are likely to switch brands to one associated with a good cause, if price and quality are similar," says Vikas Vasal, executive director, aid and development services, KPMG India, a global audit and consulting firm. Companies are, therefore, approaching communication on social issues just like a marketing decision with cost/benefit analysis.
“If a company communicates its social responsibility, the company in some ways is trying to influence consumer preferences," says Vasal.
And it is not surprising that more companies are reporting their CSR initiatives. Globally, CSR reporting has been steadily rising since 1993. More than 1,600 company reports were covered in audit and advisory services firm KPMG’s 2005 survey. The firm found that 64% of the G250 (Top 250 companies of the Fortune 500) report on CSR, while 52% produced separate reports; for the N100 (the Top 100 companies in each of 16 countries) the figures are 41% and 33%, respectively.
In India, too, CSR reporting has gone up in the past several years. However, CSR reporting in India is focused on community initiatives rather than governance, risk and disclosure.
Dentsu Marcom Pvt. Ltd, the advertising agency for Honda Siel Cars, believes that advertising on social issues is part and parcel of the changing texture of communication in India. “It’s not about the product any more but about what connect it has with consumers," says Gullu Sen, vice-chairman and chief creative officer, Dentsu India. “Advertising around social issues initiates a two-way dialogue between consumers and companies by forcing some reaction or response from them, thereby enhancing interactivity," he adds.
Experts say this trend is likely to pick up speed across sectors, especially as companies in India increasingly look at social marketing with a business approach. And with CSR audit, it is likely to gain the credibility it might be missing right now. “Independent CSR auditing will bring in credibility and accountability and some amount of reasoning into this new bastion of communication," says Rao.
“With the options available in media today, consumers are easily rejecting commercial messages from companies, whereas advertising around social causes induces thought. We are likely to see a lot more companies adopting this trend in the near future," says MindShare’s Raman.
In the next two weeks, TCL India will be launching its new print campaign focused on health for its products that have been designed to promote safety and wellness of consumers. Real estate developer Omaxe Ltd has plans of taking on the environment angle for future communications in its advertisements, while Honda Siel already has a host of communications around energy conservation lined up for the near future. “Environment, safety and energy conservation; this is the route our communication is taking for the future," says Honda Siel’s Sen.
Advertising the social initiatives undertaken also help companies make the most of the investments that have gone into them. “These activities entail high costs which can sometimes be a drag on the financial bottom line in the short run. But these initiatives will bring in more returns in the long run as it builds trust from the community and stakeholders," says the ITC spokesperson. Experts say the return on investment is significantly high. “These advertisements have a long-lasting impact and a better recall value," adds KPMG’s Vasal.
Explaining the correlation, Vasal says if a company’s social- or cause-related advertising budget is RsX lakh, the mileage derived by way of enhanced visibility and acceptability will be RsX plus some several lakhs. The same cannot be said for traditional advertising, says Vasal, adding, “It does not mean that one can substitute the other. Both will coexist."
Campaign:Nature rides with Honda
Agency: Dentsu Marcom
The brief: The company wanted to highlight its 10th anniversary, its commitment to the environment and the values Honda stands for in the ad campaign.
The 10-year-old in the advertisement stands for the car’s 10th anniversary, while the ladybird signifies the focus on environment.
“We wanted to publicize our corporate brand direction of safety, environment and energy conservation." —Jnaneswar Sen, Senior general manager, marketing, Honda Siel Cars India
Campaign: Drops of Joy
Agency: McCann Erickson
The brief: Through the Drops of Joy campaign, Coca-Cola wanted to convey its whole range of products including juices and water , not just colas. The particular ad on the bottling plant was to reinstate its commitment to the community.
“Nowadays, stakeholders, including consumers, evaluate companies not only on their financial success but more on what they do for the community at large." —Deepak Jolly, Vice-president, public affairs and communication, Coca-Cola India
Campaign: ‘Jaago Re’
Agency: Lowe Lintas India
The brief: Tea has an awakening effect on people. The brief was to show the connect between the brand and the message of social awakening.
“When a brand sends out a message?like this, it touches consumers directly."— Sushant Dash, Deputy general manager, marketing, Tata Tea
Campaign: Go-Green Initiative
The idea: To establish itself as an environment-friendly company, WorldSpace India launched a Go-Green Initiative. The campaign launched in October last year was centred around a simple five-point action plan that its listeners could easily enact.
• Plant a tree
• Use a cloth bag
• Turn off the tap.
• Change a bulb (switch to compact fluorescent lamp)
• Turn off your engine
The execution: The company used a multimedia platform for this initiative. It was promoted through on-air programming, a Go-Green website and supplemented by tree planting functions.
“At WorldSpace, corporate social responsibility is more than just a buzzword. The Go-Green Initiative is just one of the many socially relevant activities that we will be encouraging our employees to engage in."— Harshad Jain, Chief marketing officer, WorldSpace