Social Marketing aims to create ’social good’. This is not entirely a new concept. The worldwide sponsorship industry is estimated at US$30B. Sponsorships are, after all, a way for companies to generate goodwill among consumers and other customers. In the new era, however, the focus of social marketing is in Cause Marketing, which is defined as: “marketing effort creating a public association with a social or charitable cause or organization to promote the company’s product/service and raise money for the cause or organization.” Cause marketing may take several forms for the participating company, with the nonprofit partner earning money in a variety of direct or indirect ways: Advertising/PR, Sponsorship, Licensing, Paid endorsement, Commission, Affiliate marketing, Facilitated giving and more.

Peter Korchnak lists several potential benefits for the businesses using social marketing:

• Improved brand awareness and image
• Media coverage and other public relations benefits
• Public recognition
• Alignment with causes customers support
• Employee engagement
• Talent attraction and retention
• Resulting higher sales

Cause-Related Marketing Good for the Bottom Line says Martin Cooper and quotes a 2006 research project, the Cone Millennial Cause Study, which claims that 89 percent of Americans would switch from one brand to another of comparable price and quality if the latter brand was associated with a “good cause.” A global survey among over 6,000 consumers finds that more than six in 10 people would buy, and recommend, a brand that gave back to society or helped the environment, even if it wasn’t the cheapest.

For marketers, Cause Marketing will not make life easier. With marketing being more analytical and result oriented, it will not be easy to measure results: According to MediaVest’s David Shiffman, companies must first identify what they are trying to accomplish and then measure both the awareness of their programs as well as how they make consumers feel about their brand. While the former is easy to measure, the latter make take more time and effort, and is less scientific by nature.

For PepsiCo, the key will be its ability to activate people to spread its message because of the social good they are doing. This will require putting the right programs in place to support the plan and measure results. Without concentrating on measurable objectives, it will be difficult to justify further investment in the future.

Dan Morrill suggests that the answer for the first question is demographics and profitability: Facebook users are more affluent than Myspace’s to a point that supporting Myspace was becoming non-profitable. This is interesting, because it means that Myspace with its 261M+ users, were not able to generate a significant annual income for Causes (probably less than 0.1c per user.) This brings us to the second question: what’s the overall size of this market? While organizations report that online giving grows by high double digits, Georgia Levenson Keohane reports that “Internet giving still constitutes a tiny portion of total dollars raised—typically between 1 percent and 5 percent of an organization’s overall contributions” (“The Facebook Philanthropos“.) The Washington Post reports that To Nonprofits Seeking Cash, Facebook App Isn’t So Green: “Only a tiny fraction of the 179,000 nonprofits that have turned to Causes as an inexpensive and green way to seek donations have brought in even $1,000, according to data available on the Causes developers’ site”. The site reveals that only 2 causes surpassed the $100K fundraising: Nature Conservancy and Students for Free Tibet.192,000 unique donors contributed $10,000,000 through 400,000 donations of $25 on average. Does $25 sound low as an average donation? a 2008 American Express sponsored survey found that the average online gift is about same amount as offline gift, however, the numbers there are way greater than Causes’ which suggest wealthier donors.

Despite the disappointing financials, Causes claims to have over 35 million active users on Facebook, which places it among the most used applications. This certainly creates a huge opportunity for non-profits and other organization to promote themselves and their goals to this audience. This means that large organizations with recognized brand names may be reluctant to invest in social networking at this point – the funds are not there and they already have the brand. Smaller organizations, with limited marketing budgets, small operations and low public exposure may yet continue and run campaigns on Causes and other platforms.

What’s next then? Some believe that we need change. “People have to first change their patterns of online behavior” says Debra Askanase, “Two years from now, I predict that online behavior will again have shifted and that social network users will become accustomed to donating through social networks”