CEO: Red's Raised Lots of Green

VIEWPOINT: Brand Chief Says True ROI Includes Dollars and Awareness

By Published on . 7

Last week Ad Age published a story headlined "Costly Red Campaign Reaps Meager $18M."
Red CEO Bobby Shriver says one of the brand's goals is to help its marketing partners profit.
Red CEO Bobby Shriver says one of the brand's goals is to help its marketing partners profit. Credit: Ric Francis
We at Red take extreme issue with the numbers quoted -- to say our partners spent $100 million on marketing is wrong, by more than 50% -- and the fact that the article quoted unidentified experts. We also take issue with the revenue streams credited to our campaign, which has been a fantastic success.

Our goal is to create a model where private companies can do good and make money at the same time. To expect private industry and corporations to give away their marketing budgets is a pipe dream, and that's why we created a brand that helps produce not one source of revenue but four.

Red itself spends nothing on marketing. We count on our brave partners to market their own products. We hope Red will be sustainable. That's why we had a goal of helping our partners profit -- so that they'd be Red forever. It is that simple.

Some shake their heads at this notion. We applaud it. Any company worth its weight in salt knows it doesn't exist to give away money. Red gives our partners a way to do good and turn a profit doing so. So, if you're going to look at our marketing partners' marketing expenditures, shouldn't you take into account the full return on investment? We think so.

So what is that ROI?

First, our partners have donated $25 million directly to the Global Fund. That money goes straight to the Global Fund; it does not get funneled in any way through Red. It represents fully five times what the Global Fund was able to raise on its own in five years. It's twice the amount Australia gave to the Fund in 2006 and 12 times the sum of China's contribution.

Second, our partners sell Red products; send Africa, on average, 40% of the profits; and promote the treatment of AIDS on the continent. They, in turn, keep the balance of gross profits from sales. The Ad Age story could have said that total returns, therefore, were in excess of $60 million, with $25 million going to the cause.

Third, the partners benefit from the foot traffic into their stores. It would be hard to believe that nobody bought other products when they entered the Gap to buy a Red product. Perhaps someone also picked up a sweater at the Gap when he purchased his Red jeans. Perhaps when someone else bought a Red Nano, she also got a case for it.

Fourth, and perhaps most important, is the boost in awareness of Red's "shareholders" -- in other words, the people suffering from AIDS in Africa who count on the lifesaving medicine the Global Fund delivers. We exist to help those people.

A consequence of our partners' marketing campaigns is that the pandemic issue reaches more and more Americans than we could ever imagine doing through our lobbying (Data.org) and organizing (One.org) activities. Our partners' marketing of Red frees up the Global Fund to focus on its core business of saving lives; its valuable resources can then be used to raise awareness.

When a customer walks into The Gap in Topeka, Kan., (or Sprint or Apple) and looks at a Red T-shirt, Gap associates are trained to talk to them about that product, what Red is and what the Global Fund does for people in Africa with AIDS.

Put a value on that communication! If Ad Age was going to put a value on our marketing campaign, perhaps it should have tried to value this communication as well.

So, while one point we cannot agree on with Ad Age is the marketing expenditures of our partners, the bigger crime in Mya Frazier's story is that it ignored the rest of the revenue our project is creating, both in term of dollars and hearts and minds. That is a real crime against the poorest of the poor. You should be ashamed.

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Editor's note: The marketing-spending numbers were thoroughly researched and based on three separate media experts' estimates of the marketing partners' outlay on print, TV, billboard and internet ads as well as the cost of a content-integration deal, in-store marketing materials and a pop-up store used by one of the partners. The $100 million estimate did not include a look at the value of all the publicity and TV appearances surrounding the campaign, as has been stated in several media outlets. The revenue for Red from this campaign at the time the original story was published was $18 million, a figure from Red itself. Since then -- as mentioned in the story -- another partner has added its contribution, bringing the total raised to $25 million. Ad Age stands by the story.
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