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ECONOMIC CRISIS, CONSUMERS VALUE BRANDS

DESPITE ECONOMIC CRISIS, CONSUMERS VALUE BRANDS’ COMMITMENT TO SOCIAL PURPOSE, GLOBAL STUDY FINDS

Strong Personal Beliefs in Making a Difference Signal Opportunity for Marketers. November 17, 2008, New York — New findings from this year’s goodpurpose™ global study of consumer attitudes reveal that nearly seven in 10 (68%) consumers would remain loyal to a brand during a recession if it supports a good cause, and 71% say that when they think about the economic downturn, they have either given the same or more time and money to good causes. The study was released today by goodpurpose™, a consultancy at Edelman dedicated to connecting brands and companies with consumers around a powerful, involving social purpose idea for mutual benefit.

These findings, part of the second annual goodpurpose™ study, convey the eye-opening yet encouraging news that recent economic events have not had a negative impact on consumers’ contributions to good causes. Despite the downturn, across the globe people’s sense of commitment to helping others—and to brands and companies that share that commitment—remains strong. The survey queried 6000 consumers in 10 countries and was conducted in August, September and October by StrategyOne.

Around the world, consumers voice a strong desire for marketers to connect their brands to social action. Forty-two percent say that if two products are of the same quality and price, commitment to a social purpose trumps factors like design, innovation and brand loyalty when choosing one brand over the other. Half (52%) of consumers globally are more likely to recommend a brand that supports a good cause over one that does not, and 54% would help a brand promote a product if there was a good cause behind it.

“Brands that engage in social purpose can do more than just stand out in the marketplace,” said Mitch Markson, president of Edelman’s Global Consumer Brands practice and founder of goodpurpose. “They can bring ‘double value’ to their customers, who get a product they want, plus support for a cause they believe in. Since 58% of consumers globally think it’s OK for brands to support good causes and make money at the same time, marrying profits and purpose may prove to be a powerful strategy during these harsh economic times.”

Consumers in China lead the way, with 58% indicating they are giving more despite the economic downturn. Women are more likely than men to agree that “during a recession it is still important for brands and companies to set aside money for a good cause or purpose” (82% v 78%) and that “if a company has to cut its costs during a recession it should not stop giving to good causes” (75% v 70%).

Putting Meaning in Marketing
Around the world, a large majority of consumers, 87%, feel it is their duty to contribute to a better society and environment; 82% feel they can personally make a difference; and 83% are willing to change their own consumption habits to help make tomorrow’s world a better place; these findings are statistically on par with last year’s study. Three-quarters (76%) say they like to buy brands that make a donation to worthy causes.

But while 42% of consumers globally say “helping others and contributing to my community” brings them the strongest feelings of contentment, only 25% say they gain contentment from the shopping experience. Sixty-three percent say brands spend too much money on advertising or marketing and should put more into a good cause.

“Clearly, putting meaning in marketing is more important than ever,” said Markson. “These findings present brands with an opportunity to engage in ‘mutual social responsibility’—brands and consumers working together to effect positive social change for mutual benefit —and to realize a "return on involvement," a new metric that looks at participation and involvement as true builders of brand loyalty. When a brand acts as a ‘citizen brand,’ contributing to community and society beyond its functional benefits, ‘doing good’ can translate to ‘doing well’ and the brand can forge a stronger emotional bond with its consumers.”

Brita’s “Filter for Good” campaign, which asks consumers to take a pledge to reduce their plastic bottle waste, and the American Express Members Project, which invites members to realize their own social purpose vision and funds a selection of member-driven projects, are among the popular social-purpose brand programs that are changing the public’s perceptions of what a brand can stand for—and achieve.

Despite consumer interest, the study shows that brands need to better communicate their social purpose investments. Only 40% of consumers around the world say they are aware of any company that actively supports a good cause, and only 33% are aware of a brand that actively support a good cause. In China, awareness of brands that actively support a good cause grew from 55% in 2007 to 68% this year, most likely because of the recent Olympic Games.

Consumers Put Local Causes, Environment First
The study also shows that consumers believe supporting good causes begins at home. Two-thirds (65%) agree that it is becoming more unacceptable in their local community not to make some effort to show concern for our environment, and over a third (34%) say they have given most of their support to their local community. Sixty-One percent of people globally say they have taken an action to do good because they have been influenced by their or other people’s children.

Following from last year’s study, environment remains the No.1 social cause consumers care about, followed closely by health, poverty and education. Nearly 9 in 10 consumers (88%) say they care about protecting the environment, and more than 8 in 10 of consumers (86%) care about improving the quality of health and healthcare, followed by reducing poverty (84%) and equal opportunity to education (82%). Respondents in India are significantly more likely than their peers in every other country to agree that there is too much fuss about the environment (79%) and to agree that they don’t believe we are having global warming (56%).

New to this year’s study is the finding that consumers globally believe that government, more than any other entity, should take the lead in supporting the following three priorities: equal opportunity for education (55%); health (46%) and reducing poverty (40%). In France, most consumers think media should lead in building understanding and respect for other cultures (19%), while in India most thought religious institutions should do this (27%).

Among a list of causes that consumers care about, this year’s study shows a decline in concern about “fighting AIDS” (73% in 2008 vs. 83% in 2007), while concern about “supporting civil rights” grew to 80% from 71% last year. Ironically, larger numbers of consumers in the developing countries of China (91%), India (79%) and Brazil (73%), said they are personally involved in helping the less fortunate or disadvantaged, compared to the global average of 65%.

The study also found that consumers consider the entertainment industry to be the most supportive of social causes, ahead of the sports, Internet, banking and food industries.

More information about the goodpurpose Consumer Study and consultancy, interviews with managers of brands that are engaged in social purpose, and news about socially active brands are available at the cooperative’s Web site, GoodPurposeCommunity.com.

About the goodpurpose™ Consumer Study
StrategyOne conducted 6048 interviews in 10 countries between August and October 2008. The study was an online survey of consumers, nationally representative of each of the country populations. For India and China survey was conducted as face to face and CATI respectively. Sample sizes per country are: US = 1006, China = 1000, UK = 522, Germany = 506, Brazil =500, Italy = 500, Japan = 502, India = 503, Canada = 502. France was a new addition to this year’s study, France=507. The margin of error is +/- 3.1% for the U.S. sample and +/- 4.38% for the UK, German, Italian, French, Brazilian, Japanese, Indian, Chinese and Canadian samples; +/- 2.53% for the European (UK/Italy/ Germany/France) sample; +/- 3.1% for the North American (US and Canada) sample; +/- 2.53 for the Asian (Japan, China and India) sample and +/- 4.38 for the Latin American (Brazil) sample.

About goodpurpose™
The goodpurpose™ cooperative is a consultancy from Edelman designed to mine the creative, socially responsible and financially lucrative opportunities that can arise when brands and consumers join forces around a social platform or meaningful cause. The consultancy features a cross-practice, cross-country team of professionals with expertise ranging from brand marketing, health and technology to entertainment, digital media, research, and corporate social responsibility. The goodpurpose offering includes an interactive workshop and exploration, research and insight data, creative campaign development and execution, and a forum for ongoing dialogue, information gathering and exchange at GoodPurposeCommunity.com.

About Edelman
Edelman is the world’s leading independent public relations firm, with over 3,200 employees in 54 offices worldwide. Edelman was named PRWeek’s “2008 Large Agency of the Year,” Holmes Report’s “2008 Global Agency of the Year,” and listed as top-10 firm in Advertising Age’s “2007 Agency A-List,” the first and only PR firm to receive this recognition. In 2007, CEO Richard Edelman was honored as “Agency Executive of the Year” by Advertising Age, and he was cited in 2007 and 2008 as “Most Powerful PR Executive” by PRWeek. For more information about Edelman visit www.edelman.com.

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