How art gets generated.
“One thing we’ve definitely seen is that people don’t buy something just because it does good in the world, it has to be a good product. There’s no way we could have had such a successful campaign without our product development people or without the successful visual campaign we have. You need a successful business model to sell a product. I haven’t seen any example of a cause-related marketing campaign saving an otherwise bad business.”
Last year, Canadian-founded MAC Cosmetics raised $38-million through its MAC AIDS Fund to help combat the spread of AIDS. The success of the 18-year-old campaign predates the cause-marketing boom that has stormed the corporate world and yet continues to attract celebrity spokespeople like Nicki Minaj, Ricky Martin, Lady Gaga and others; all the while building the MAC brand and growing the Fund’s coffers to the tune of $250-million. Nancy Mahon, senior vice president of MAC Cosmetics and global executive director for the MAC AIDS Fund, recently spoke with the Financial Post’s Dan Ovsey about the realities of cause marketing and the secrets behind the Fund’s success. Following is an edited transcript of their conversation.
Q: Normally with CSR and cause-related marketing we tend to see corporations choose a cause that’s directly linked to the nature of their business. What’s the connection between MAC Cosmetics and AIDS awareness?
A: At the time MAC was founded, AIDS had been ravaging the fashion community and what founders Frank Toskan and Frank Angelo decided to do was, from the very beginning, give back to the community. They gathered all the employees in a room and decided what they wanted to give the money to — and the vote unanimously was to AIDS.
Q: The MAC AIDS Fund and the VIVA GLAM campaign (the fund’s primary revenue driver) continue to bring in money and attract big-name celebrities. To what do you attribute the longevity of its success?
A: It has used the core strength of the company, which was glamour, fun and a sense of sexiness, as well as its access to people around those issues, to raise money for AIDS research and got the word out about AIDS prevention. It used rock stars and glamour and models, like Linda Evangelista or Rupaul, and used their sexiness to talk about HIV. At the end of the day people listen to rock stars, models and drag queens in a way they don’t listen to public health officials, doctors or mothers or fathers. At the same time it had created this incredibly generous fundraising model, which is that 100% of the money raised goes to the fund.
Q: Why did you choose these particular celebrities as your campaign ambassadors?
A: Every single one of them has had their own struggles in their lives and they’re very open about that. I think that’s what gives the campaign its credibility. It’s not about perfect people with perfect lives, but about people living openly and honestly about the struggles they’ve had. At the end of the day, AIDS is a behaviour-based disease and it’s about sex and drug use primarily and those are big parts of the rock industry and the fashion community.
Q: Can cause marketing work without the influence of a celebrity spokesperson?
A: I guess it depends on the purpose of the campaign. If you’re trying to raise awareness (rather than just money), the question becomes who you’re raising awareness with, and just like any other marketing you do, you have to look at who your target audience is and you have to have people speaking to that audience who are persuasive to them.
Q: Have you seen any quantifiable impact of the VIVA GLAM campaign or the Fashion Cares sponsorship on MAC’s bottom line?
A: Because this was a piece of the business from the start, you couldn’t really dis-aggregate how much of it is the VIVA GLAM campaign and how much is the value of the product. One thing we’ve definitely seen is that people don’t buy something just because it does good in the world, it has to be a good product. There’s no way we could have had such a successful campaign without our product development people or without the successful visual campaign we have. You need a successful business model to sell a product. I haven’t seen any example of a cause-related marketing campaign saving an otherwise bad business.
‘It has to be the real deal — a genuine commitment of elbow grease and muscle power and share of voice, as well as financial resources to the cause’
Q: You say that cause marketing cannot be the salvation of a mismanaged company, but can it revitalize the equity of a withering brand?
A: I think it could. The key element is leadership. The leaders of the company and of all the divisions really need to be engaged in whatever the cause is. It has to be the real deal — a genuine commitment of elbow grease and muscle power and share of voice, as well as financial resources to the cause. If you look at Starbucks, which was a great company and then faltered a bit, and if you read Howard Schulz’s book and how Starbucks rediscovered its roots, it didn’t just go back to coffee; it went back to humanity and its values. If you look at them now, they’ve got the jobs program that they’re raising money for and the water program; their values are front and centre in terms of what they’re standing for in the community.
Q: There are many who would argue that CSR is no longer something nice to do during good times, but a mainstay of business operations. Would you agree?
A: What we’re seeing in a social and digital age is that primarily customers want to see that people are doing business responsibly. They want to see you’re environmentally sound and that you treat your workers well, that your supply chain has integrity, that your employees feel good about the company and then they want to see where you give money. But if you don’t do the first two well, customers won’t care how much money you give away.
The other important piece is employees. We’re in a very competitive global marketplace for workers and what we’ve seen is that we have one of the highest retention rates in the cosmetics industry and one of the top 10 reasons that people stay at MAC is MAC AIDS Fund. In our global marketplace, we don’t just compete within the cosmetics industry, but with Starbucks, Apple and a lot of the high tech companies, and we want the best and most creative people — and we want them to not only stay at the company but to do the very best they can within their own individual jobs.
By Dan Ovsey, Tuesday, Aug. 28, 2012
For the full article, please click here: http://www.financialpost.com/m/wp/executive/c-suite/blog.html?b=business.financialpost.com/2012/08/28/how-canadas-most-famous-cosmetics-company-built-brand-equity-by-taking-on-the-fashion-worlds-biggest-killer