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Making the Pitch for Charities

The Wall Street Journal, November 29, 2010

As holiday advertisements get into full swing, a rash of retailers have incorporated cause-related pitches into their yuletide promotions.

Gap Inc.’s holiday push includes ads that show personalities including Foursquare founders Dennis Crowley and Naveen Selvadurai talking about their favorite charities. The videos appear on Facebook and every time a consumer clicks a “like” button after the video plays, the charity gets $1.

Corporate America is increasingly deploying cause-related marketing to woo consumers. North American companies are expected to spend $1.6 billion on sponsorships of charitable causes this year, a 6.1% increase over 2009, according to IEG, a research company owned by WPP PLC. The growth rate of cause marketing, IEG says, is outpacing spending on sports sponsorship, the largest category in dollar terms.

Research suggests that consumers are more likely to support companies that say they are making a difference in the world. But with the large amount of marketers now trumpeting causes, consumer skepticism is growing, advertising experts say.