Friday, March 09, 2007

Bono & Co. Spend up to $100 Million on Marketing, Incur Watchdogs' Wrath



COLUMBUS, Ohio (AdAge.com) — It’s been a year since the first Red T-shirts hit Gap shelves in London, and a parade of celebrity-splashed events has The collective marketing outlay by Gap, Apple and Motorola for the Red campaign has been enormous, with some estimates as high as $100 million. followed: Steven Spielberg smiling down from billboards in San Francisco; Christy Turlington striking a yoga pose in a New Yorker ad; Bono cruising Chicago’s Michigan Avenue with Oprah Winfrey, eagerly snapping up Red products; Chris Rock appearing in Motorola TV spots ("Use Red, nobody’s dead"); and the Red room at the Grammy Awards. So you’d expect the money raised to be, well, big, right? Maybe $50 million, or even $100 million.
Try again: The tally raised worldwide is $18 million.
The disproportionate ratio between the marketing outlay and the money raised is drawing concern among nonprofit watchdogs, cause-marketing experts and even executives in the ad business. It threatens to spur a backlash, not just against the Red campaign — which ambitiously set out to change the cause-marketing model by allowing partners to profit from charity — but also for the brands involved.
You thought the money you spent on Red products was going to buy medicine for AIDS-afflicted Africans? Turns out it's going to line ad executives' pockets. In my view the Red campaign is just a celebrity photo op. This is another example of Bono not walking the walk. Not long ago this story broke revealing that revenue from U2's Vertigo tour is funneled through companies that are mostly registered in Ireland and structured to minimize taxes and the band's decision to move its music-publishing company to the Netherlands from Ireland in June 2006 in order to minimize taxes. The move came six months before Ireland ended an exemption on musicians’ royalty income, which is generally untaxed in the Netherlands.
Wealthy people who don't pay their fair share of taxes make The Nag really, really angry. Taxes, as we all know, pay for education and health care and a social safety net for the less fortunate. He even has the gall to lecture world leaders on how they should redistribute taxes garnered from people who actually do pay their fair share. What does Bono have to say about all this?
“U2 were never dumb in business,” Bono says “We don’t sit around thinking about world peace all day.”
So how does this make him different from all the other corporate welfare bums?
(Someone stop me - I'm sounding as sanctomonious as Bono!)

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