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Costly Red Campaign Reaps Meager $18 Million

Bono & Co. Spend up to $100 Million on Marketing, Incur Watchdogs' Wrath

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COLUMBUS, Ohio (AdAge.com) -- It's been a year since the first Red T-shirts hit Gap shelves in London, and a parade of celebrity-splashed events has
The collective marketing outlay by Gap, Apple and Motorola for the Red campaign has been enormous, with some estimates as high as $100 million.
The collective marketing outlay by Gap, Apple and Motorola for the Red campaign has been enormous, with some estimates as high as $100 million.
followed: Steven Spielberg smiling down from billboards in San Francisco; Christy Turlington striking a yoga pose in a New Yorker ad; Bono cruising Chicago's Michigan Avenue with Oprah Winfrey, eagerly snapping up Red products; Chris Rock appearing in Motorola TV spots ("Use Red, nobody's dead"); and the Red room at the Grammy Awards. So you'd expect the money raised to be, well, big, right? Maybe $50 million, or even $100 million.

Try again: The tally raised worldwide is $18 million.

The disproportionate ratio between the marketing outlay and the money raised is drawing concern among nonprofit watchdogs, cause-marketing experts and even executives in the ad business. It threatens to spur a backlash, not just against the Red campaign -- which ambitiously set out to change the cause-marketing model by allowing partners to profit from charity -- but also for the brands involved.

Enormous outlay
By any measure, the buzz has been extraordinary and the collective marketing outlay by Gap, Apple and Motorola has been enormous, with some estimates as high as $100 million. Gap alone spent $7.8 million of its $58 million outlay on Red during last year's fourth quarter, according to Nielsen Media Research's Nielsen Adviews.

But contributions don't seem to be living up to the hype. Richard Feachem, executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, the recipient of money raised by Red, told The Boston Globe in December, "We may be over the $100 million mark by the end of Christmas."

Rajesh Anandan, the Global Fund's head of private-sector partnerships, said Mr. Feachem was misquoted, and defended the efforts by Red to increase the Global Fund's private-sector donations, which totaled just $5 million from 2002 to 2005. (The U.S. Congress just approved a $724 million pledge to the Global Fund, on top of $1.9 billion already given and $650 million from the Bill & Melinda Gates Foundation.)

'Hugely frontloaded'
"Red has done as much as we could have hoped for in the short time it has been up and running," he said, adding: "The launch cost of this kind of campaign is going to be hugely frontloaded. It's a very costly exercise."

Julie Cordua, VP-marketing at Red and a former Motorola marketing exec and director-buzz marketing at Helio, said the outlay by the program's partners must be understood within the context of the campaign's goal: sustainability. "It's not a charity program of them writing a one-time check. It has to make good business sense for the company so the money will continue to flow to the Global Fund over time." She added that since many of Red's partners haven't closed their books yet on 2006, more funds likely will be added to the $18 million.

But is the rise of philanthropic fashionistas decked out in Red T-shirts and iPods really the best way to save a child dying of AIDS in Africa?

Parody mocks Bono
The campaign's inherent appeal to conspicuous consumption has spurred a parody by a group of San Francisco designers and artists, who take issue with Bono's rallying cry. "Shopping is not a solution. Buy less. Give more," is the message at buylesscrap.org, which encourages people to give directly to the Global Fund.

"The Red campaign proposes consumption as the cure to the world's evils," said Ben Davis, creative director at Word Pictures Ideas, co-creator of the site. "Can't we just focus on the real solution -- giving money?"

Trent Stamp, president of Charity Navigator, which rates the spending practices of 5,000 nonprofits, said he's concerned about the campaign's impact on the next generation. "The Red campaign can be a good start or it can be a colossal waste of money, and it all depends on whether this edgy, innovative campaign inspires young people to be better citizens or just gives them an excuse to feel good about themselves while they buy an overpriced item they don't really need."

Fears of nonprofits
Mark Rosenman, a longtime activist in the nonprofit sector and a public-service professor at the Union Institute & University in Cincinnati, said the disparity between the marketing outlay and the money raised by Red is illustrative of some of the biggest fears of nonprofits in the U.S.

"There is a broadening concern that business is taking on the patina of philanthropy and crowding out philanthropic activity and even substituting for it," he said. "It benefits the for-profit partners much more than the charitable causes."
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62 Comments
Subscribe to comments on: Costly Red Campaign Reaps Meager $18 Million
  By tbaio | madison, WI March 5, 2007 09:07:38 am:
This is a shame. Especially considering that we pitched them a much better concept for raising donations. We concepted an eDirectory Program which any Brand could sign up for and pledge .007 (.7 %) of there gross revenues and post when and where they donated the funds. (In line with the millenium goals)

In exchange the company gets a "Point Seven %" logo to go on all of their products/advertising. Consumers, after they see the logo on products and ads, can go to the directory, look up advertisers by name, category or by "Point Seven" ID. They can read when and where the Brand's donation was allocated. The Brand can also post commercials and other infor about their company.

We believe this idea was better for ONE because it allows any brand, no matter how big or how small to participate. And it lets Consumers know which Brands are making an effort to contribute....from the mom and pop hardware store to Starbucks....it drives greater participation at smaller amounts. Whereas the Red campaign can only involves larger Brands.

It could have been done slowly too....over time, with incremental marketing spending depending on the growth rate.

If anybody likes this idea for one of their clients or institutions, please let me know. It just kills me that this Red program isn't working.
-tbaio@egencie.com
  By MLC102306 | Fitchburg, MA March 5, 2007 09:13:02 am:
It's another way to raise awareness and to get people to give money. You can still give money directly. I see this campaign as just another way to reach out to people and build awareness. Awareness takes time to build. Profits are not a bad thing. I think the issue is that people are sick over CEO and other high level executives' pay checks. I think that is the real issue while average people suffer. Average people do not get the recognition they deserve.
  By LEONARD | MARLTON, NJ March 5, 2007 09:18:58 am:
When put that way, it sounds a bit frivolous doesn't it? Spend $100 Million to only donate $18 Million????

But let's take a step back and actually look at the results from a business perspective. If you visit the Gap's web page on the Red project (http://www.gapinc.com/red), you will learn that the Gap has pledged to donate 1/2 of the PROFITS from Red products sold to the charity. Let's assume that all the players made the same pledge. This would mean that the $100 Million in spending resulted in $36 Million in PROFIT. This means that the advertisers made back their $100 Million PLUS an extra $36 Million.

That's a +36% return on investment (ignoring the other costs of production, overhead, etc... for now - not financially sound, but humor me). Even after the charitable donation, it's still an 18% return on investment - and let's not forget that $18 Million got donated to a worthy charity. When you look at it this way, it doesn't seem so bad, does it? Especially in Year 1 of the campaign. If I told a Brand Manager at a Consumer Products company that they could make $36 Million in profit in the first year of a product launch, they would jump all over the opportunity.

Project Red was created as an opportunity for organizations to do good while still being profitable. It would seem that this is exactly what is happening. So what's the problem????
  By YASSER | WOODBRIDGE, VA March 5, 2007 09:23:26 am:
The idea is a good one, since it plays into the current dynamics of youth marketing. The prices of the RED products do need to be lowered a tad bit, thereby giving the youth the incentive to 'go red'
By the way, since when did people start using Ad Spend as an investment with an ROI. If that is the criteria for measuring marketing success, then i suspect quite a few of the top FMCG and fortune 500 companies will be in the 'Red"
  By SHARI | NEW YORK, NY March 5, 2007 09:42:27 am:
How about considering that the marketing strategy and the design strategy were flawed? Every time I pass my local GAP I try to remember what the RED campaign is all about and I can't recall. Also, the clothing the logo is on is terrible and I cannot understand what the photographs of famous people with words on them have to do with anything.
  By Phil | Toronto, ON March 5, 2007 09:45:16 am:
it just shows again for the thousand time - "BIG NAMES DO NOT MAKE THINGS HAPPEN - NOR INFLATED EGOS - IT TAKES TALENT !!!!"
  By DAVID | DES MOINES, IA March 5, 2007 10:05:15 am:
A 20% return on this kind of effort does not seem bad. The $100 million is not an incremental spend, so raising $18 million is a good thing. I believe this program is being evaluated using the wrong model.
  By Brad | NOVATO, CA March 5, 2007 10:36:43 am:
Keep up the good work guys... No war was ever won on a single campaign.

The bottom line is, some people and countries are consumers, so why not offer them the opportunity to do some good when they fill their shopping cart?
  By Ross | Bellevue, WA March 5, 2007 11:25:19 am:
The main problem with the Red campaign is that the products are overpriced, shoddily constructed and in many cases extremely UGLY. I have a personal experience with GAP Red. I bought an overpriced red hoodie sweatshirt - got it home and it fit badly and looked even worse. Shame on me for buying something without trying it on, but I will never buy another Red product. I think the whole campaign is rather
uninspi(red).
  By tmentz1 | Roeland Park, KS March 5, 2007 11:28:45 am:
This is not surprising. The Red campaign is too obscure and removed from the sensibilities of everyday consumers. Partnering with a perpetually struggling brand like Gap only makes matters worse. More and more, cosumers want to spend their dollars locally. Red is self-serving and misses the mark completely.
  By steelheadjasone | SHERWOOD, OR March 5, 2007 11:40:18 am:
As an American Ad man with a heart for Africa, I find this article really disappointing. It is just like us to aim a gun at those that are desperately trying to bring about solutions to a problem that is killing millions of Africans and leaving in its wake countless millions of children orphaned.

The way in which you including the "Parody mocks Bono" section of the article was plain insulting. As a long-term solution, Philanthropy has not proven to work. The problem of AIDS in Africa is way beyond the hearts and checkbooks of westerners. Sustainable solutions must be found that ultimately can grow Africa's presence in the global economy, providing much needed jobs, and increasing the government's ability to care for it's people.

You cannot judge the success of this campaign based solely on the per product gross revenues, nor really can you judge it solely on the proceeds that have gone to the Global Fund. You must also look at the groundbreaking power this idea contains. With the Red campaign, Bono and his cohorts have suggested that a sustainable solution may be found in the one thing that we as American's have done better than any other country on the planet, capitalism. His work with Red and DATA is waking corporate America up to the realization that we all can take our talents and business savvy and bring solutions to the table. Solutions that will not only be sustainable for Africa, but could also grow our own business interests.

The hardcore truth is, if it is going to be a sustainable solution, ultimately all parties will have to profit. Whether that profit comes directly in the form of monetary increases or indirectly in increased goodwill amongst a brands consumer base, this fact should be a breath of fresh air. Ad Age should not in any way negatively frame Bono for his efforts, but rather should applaud them with a standing ovation for this new song he has written entitled "Capitalism with a Conscience".
  By JakJak | New York, NY March 5, 2007 11:49:30 am:
I had no idea until the last few months about the full campaign effort. The only two companies I put together has been the Gap and Motorola. They advertising the most. I also think the campaign should have been more unified like the Got Milk and the cheese association.

The public needs to see the clear link between all the participating companies otherwise it looks disjointed. I also think they need to take a look at the breast cancer ads and their approach and why it works from yogert to Kitchen AIDE mixers. Excluding the obvious: cancer is more accepting and pink is a pretty women's color. They always seem to say or show a sad image/voice with an empowering message.

The red campaigns have really seem too chic almost, not real to what is reflective of AIDS. Not bed bound people, this is not Sally Struthers, but real people fighting the fight (non profit workers, families and those infected) A sence of impowerment because of the help of RED.

Not only that, the campaign didn't have the frame work established that the color red is AIDS. Yes there is the AIDS Ribbon and it is red, but Red the color of AIDS. It was forced for a automatic association and realistically it takes time to estabish that.
  By Tony | Miami, FL March 5, 2007 12:06:16 pm:
I thought this campaign was a terrible idea from the start. What on earth is philanthropic about a dying brand like the Gap donating half the profit on a line of cheap t-shirts? That's not philanthropy, that's a desperate marketing campaign designed to get young people back into their stores. If you are truly compassionate, then why not simply donate the full cost of a shirt, ipod, cell phone, etc to the fund? By doing so you'll certainly help more children. And that should be enough to make you feel better about yourself than wearing a cheap red shirt in public.
  By irikk | Grand Rapids, MI March 5, 2007 12:10:20 pm:
An 18% ROI?! I know of no company that wouldn't jump at a chance to make that much on the first year of a new campaign... well, except for Halliburton of course! Much too meager for them!

As to the quality of the products... yeah, iPods and American Express are just junk (sarcasm!)... not mainstream enough? Well, perhaps the Gap isn't designed to attract people over 30. (I'm in my 50's.)

If anyone doesn't remember what the Red campaign stands for, thet would have to be living in a fog.

Interesting to see how many unscrupulous companies have been trying to jump on the Red bandwagon with unauthorized products!

This is a long term project and now that the heavy lifting has been accomplished and the start up costs paid, it'll be interesting to see how much money is raised. In my opinion Bono & partners have laid a pretty solid foundation on which to build.
  By pmccabe | Plymouth, WI March 5, 2007 12:20:29 pm:
$100 million and I and the students at my school have never heard of it. Maybe they should have just donated the money.
phil, WI
  By oceallaigh | stratford, ON March 5, 2007 12:35:13 pm:
the red campaign is just geting off the ground and will be hugely successful.
www.betterred.com
  By Sarah | Indianapolisq, IN March 5, 2007 12:35:59 pm:
This article identified the point I've told friends all along. These are just marked up products on top of the retailer's normal selling price. So if you're spending $58 on a long-sleeve tshirt just to feel good about ProductRED, just donate the full $58 to the Global Fund. Very scary implications to the nonprofit community.
  By jhouse | Alpharetta, GA March 5, 2007 12:54:38 pm:
Does anyone wonder why Bono woudn't just have U2 donate their concert tour money to the cause? Does he really need more?It would raise hundreds of millions and wouldn't need to beg or market clothes and phones for funds.
Why can't they get creative and come up with successful, for profit schemes to raise money for these causes, instead of hand-outs?
  By FAUSTO | KEY BISCAYNE, FL March 5, 2007 01:08:08 pm:
Someone should look into the cost of producing the ads for Red. If production costs were not donated, they probably comprise a major chunk of the disproportion of return to investment. Such enormous costs could have been saved had there been a broader pro-bono effort on the part of production companies, agencies, talent, suppliers, etc. That is the true essense of charity -- not doing everything 'at cost' when 'at cost' translates into millions of dollars. — Miami, FL.
  By Heather | Columbia, SC March 5, 2007 01:24:55 pm:
I find the entire campaign ludicrous. I don't shop at Gap or Motorola. Thus, I cannot participate? This whole Red idea is elitist and exclusionary. I guess my money is no good if I'm not deemed urban and hip. If you're not in the market for conspicuous name-brand consumption of crap, then you are completely left out, apparently. Not to mention it simply looks too much like Target ads. How about this, sell a plain red towel at Target and Gap and Wal-Mart, for 20.00. We'll all buy it! You know, folks who actually live in the United States, not just in New York or San Fran or L.A.!

Bono has gotten too much bad press lately for dodging his fair of taxes in Ireland, yet he's exhorting me to purchase luxury items (things I do not need) out of some sense of altruism. Maybe if people with some credibility were used in the ads, like real people from the U.N. or a real life aid worker in Africa. Supermodels and rock stars ain't cutting it. Especially those whose careers have peaked perhaps 10-15-20 years ago. How do they connect with the current Gap shopper, who is more in tune with Britney or Paris? Has anyone realized that the myspace generation thinks Bono is an old man? Put John Mayer or someone in their demographic in the ads. The whole thing is ill-conceived, and I'll bet that the only beneficiary of the money trail are New York ad agencies, not sick and starving Africans.
  By Don | Polson, MT March 5, 2007 01:29:44 pm:
By definition, corporations and governments cannot be "charitable institutions". To be such can only be accomplished by doing what Bill Gates did in creating the Gates Foundation. To tie charity of any kind, especially an emotional issue like AIDS, to the marketing of products from which a company will profit, is cynical at best, and ultimately unconscionable. Bono is a dupe, as are Oprah and all the rest. They tarnish otherwise good reputations by involving themselves in these baldfaced commercial attempts.
  By AprilMacintyre | Calabasas, CA March 5, 2007 04:02:25 pm:
If there was ever evidence that average people are tired of celebrities and rich folks telling them how to spend their hard earned money, it is this example. The rich have never been richer in this country, the middle class is truly disappearing, and the lower middle class in debt "liners" and poor grow at unprecedented rates- When freelance people and small businesses have to shell out so much for health care costs-who cares about Africa at this point. We have loads of sick uninsured people here -Africa's leaders and power elite must grow up, get some scruples and stand on its feet and be responsible for its own people-if rich people want to give-fabulous. Stop lecturing the majority of Americans.
  By seanpatrickr | Belleville, IL March 5, 2007 04:19:08 pm:
shame on all of you for being so cynical. People are not going to give all of their money to the cause. Otherwise they would be doing it already. this is an attempt to get people involved in donating to a really good cause. so get off of your soap boxes, because i am sure that all of you have stopped buying luxury items in lieu of donating to the AIDS fund. get real people. this is a means to something that doesn't seem to be ending. $18 million is $18 million more than they had. and as all of you know, it takes money to get people interested. $100 million for a campaign that has the potential to run for years is nothing. stop looking for ways that the red campaign has failed and start looking at how you can help.
  By Easttrader1176 | Paramus, NJ March 5, 2007 04:19:09 pm:
If these corporations really want to do some good, give these people a chance at a better life where unprotected sex will not seem like an option if they are living the "good life". If all the RED products were made in Africa, the people would have a chance to have a better way of life and have more to live for. These multi-national corporations and Bono-esque do gooders should put their money where their mouths are build up the business sector there and society will improve for the common person. Do that and watch, poverty, famine, health crises, and civil war become more rare. Give these people a shot please to have a better way of life not just a monetary "band-aid".
  By hominy | Washington, DC March 5, 2007 04:26:06 pm:
Make no mistake-- I'm not a shill for RED, nor even a U2 fan (gasp!), but I hate dodgy reporting and weasely advocacy, as much as a shaky grasp of facts-- especially when info is already out there.

First, AdAge neglected to spell out what exactly RED is vs. what it isn't. It's a brand, licensed out on an individual basis to companies that make products themselves which people already buy. It has never misrepresented itself as a charity, or an empty campaign, retaining an identity as 'a commercial initiative designed to create awareness and a sustainable flow of money from the private sector into the Global Fund to fight the AIDS pandemic in Africa' .

Second, the list of companies is bigger than the GAP and Motorola, and therefore the fee, licensing, marketing, and philanthropic arrangements are each handled differently via RED (the organization) before money reaches the Global Fund. The article from the outside accuses the companies of doing something wrong before discussing what they do, and doesn't quote anyone who suggests what they acutally could be doing-- assuming there's clear indication that something wrong is being done. Guilt by innuendo, anyone?

Third, each corporate partner had to agree to a set of clearly articulated accountability, performance, and social responsibility principles-- including manufacturing products using material from Africa. I've not seen reported at all. Are these unimportant to AdAge and critics?

Fourth, AdAge highlighting one self-appointed critic without questioning the logic, motives, or backing of their cause, yet even a cursory investigation turns up no information or facts to support their charges. What happened to accountability and transparency, and basic background research?

Fifth, If BuyLessCrap were truly concerned about this as much as their bleating suggests, they would ask for greater scrutiny of the nonprofit actually receiving donations-- i.e. the Global Fund-- not a marketing campaign that's increased donations to it. Here's I'm confused because BuyLessCrap actually supports the Global Fund, an international public-private-nonprofit sector collaboration, not a grassroots effort, that's spent $4.4 billion in 128 countries on "halting and reversing" the disease but not addressing "poverty disparity", though the latter has been proven to be more likely to impact health, economic development and other issues. Yet no comment from the nut gallery about consumption here, huh?

Sixth, corporations won't pretend to do philanthropy anymore than individuals will, because philanthropy takes different forms. What about volunteerism, contribution of goods and services instead of money, and other forms? Are we to say one matters more than the other? And are we now saying that nonprofits are the only ones that can do it, and only in certain ways? It's this kind of idiotic thinking that's left us with a society chock full of investments in groups that are in the hole with little show in the way of progress, agitators who offer no real alternatives, and problems that continue to persist.

Buy Less Crap, indeed, no matter what its origins, and Invest In Facts.
  By Pamela | Atlanta, GA March 5, 2007 04:33:37 pm:
Very interesting perspective that is sparking a lot of debate. In my opinion, the thing to keep in mind is that most of the $100 million spent was NOT incremental. Most retailers traditionally spend this type of money on holiday campaigns that benefit only their bottom line. With all the cause related marketing happening these days, the rules of the game are changing and everyone is competing for donations. This is definitely a game changing move.
  By portiansky | MELVILLE, NY March 5, 2007 05:17:26 pm:
The first year results of the Go Red campaign underscores how difficult cause marketing is to 'commercialize'. The great efforts of the celebrities and companies involved not withstanding, attaching charity to consumer behavior is a dicey proposition. I wonder if the average consumer seeing Bono, Spielberg, Turlington, et al, in ads is spurred to join the effort - or do they say 'Hey let the rich guys give.' The very conspicuous way companies are tied into the fund raising may be working against them. There is a long history of companies making contributions based on sales. There is a history of selling a specific product to raise money - think of the 'Live Strong' wrist band. But the notion of red Ipods, tee-shirts, phones, etc. wrapped in an unber chic celebrity pitch may not be as connected to the cause as necessary to ignite a real grassroots response.
Luis Portiansky, NYC
  By toddcrowther | NY, NY March 5, 2007 07:40:46 pm:
Bono and his self-righteous campaign leave people just plain BO(RED)
  By JENNIFER | LOS ANGELES, CA March 5, 2007 09:13:12 pm:
I second everything that Washington DC said. RED is not a non-profit or charity but rather a for-profit business with a goal to be profitable as well as contributing to the greater good. This article is irresponsible and lacks all the information. Most of the campaign monies spent are part of their partner's media & marketing budgets and it's great that a portion is now going towards driving awareness for a worthy cause. Sprint would be running their ads regardless of their partnership with RED but now they are tagging with info on the RED Motorola phone instead of a strictly profitable device. The article fails to address the fact that these companies are also creating and/or contributing to sustainable business in Africa for instance Motorola is actually printing the packaging for the phones in Africa- another way to contribute to the local economy. Lastly, American consumers would already be buying these products and not contributing to the global fund. Please..we all study consumer behavior for a living!

This article should have had all the facts. Shouldn't we focus on how this is a model that we as marketers could use our talents not just for the bottom-line but also for the greater good? I envy those that have these partners as clients and are helping them achieve a balance of profitability and being a driving force for good.
  By screenwalker | bbb March 5, 2007 10:15:58 pm:
What none of the comments so far have touched on is the notoriously inefficient organization the money (18 Mln) is going to - and that is after all the efforts spent before (100Mln.)

The so called "Global Fund" was initially created as a lean and quick moving instrument with a focus on action and achievement. What it turned out to have become by now (after 5 years) is just a fat cat burning money with champagne and limousine services and an overly bloated "secretariat" (see for that also Boston Globe: http://www.boston.com/news/nation/washington/articles/2007/02/05/disease_fighting_funds_expenses_hit/ ).

The place has now more than 400% the people than envisioned when expecting twice the work. And nepotism and apparatchiks have taken it over and made it worse than most UN organizations (Note: It is not an UN organization but the "Global Fund" initially has been created to overcome these and other issues immanent with that group of organizations) . At the same time it has not fulfilled the core of its principles and is quickly becoming solely an overhead if nothing changes.

So from all what has already been said by other commentators and my personal knowledge of that place if you want to bring your money to better use reg. the pandemics "targeted" by the RED campaign in the moment provide funding to another place that actually does not just create an overhead until substantial change would be implemented with the "Global Fund".

Sad to see how a great idea is being destroyed by a bunch of people that put their self-importance over the interest of the organization within the humanitarian sector...
  By Langtry | Chicago, IL March 6, 2007 11:02:05 am:
Among the many people who posted a response to this article, there is an obvious desire to contribute to a cause through the purchases they make (which could easily be made directly to the charities for which Project(RED) acts as a conduit). Quite frankly, Project(RED) seeks to gain on this combination of altruism and naiveté, and these same 'pro-RED' responses fall right into what they expect of most young consumers, and Mya Frazier is to be commended for writing this article.

There are many reasons for the failure of the Project(RED) campaign. (1) Inferior-quality products selling at a premium over Gap's price point was the key issue in the clothing retailer's soft sales. (2) Over-focus on celebrity spokespersons and models instead of the charity's beneficiaries was also a large part of the problem. After all, could anyone say what Project(RED) was actually about? Be honest: the answer is "No". But they could tell you it had something to do with Bono and Oprah, and maybe Gwyneth, too. Let's not even get started on the idiocy of American Express' "I am an African" campaign (as we seem to be focusing in this forum on GAP) staring Giselle Bundchen and the aforementioned Ms. Paltrow (my cynicism about that campaign transcends rationality).

Motorola and Apple comprised the remaining Members of the Project(RED) quadrille. Motorola joined as means of reinvigorating its sagging RAZR sales. Motorola was also losing out to Nokia in the introduction of new cell phone products, something that young consumers require lest the get bored with its brand. Apple, IMO, recognized early on that its Project(RED) contribution, the limited edition red Nano, was underperforming and put their participation on the back-burner. Smart move.

Around the time of the campaign's extravagant launch, I read an interview with one of the founders of Project(RED). He stated that creating a conduit for charity funding wasn't his real goal. Rather, (*and I paraphrase*), he wanted "to engender a new business model whereby people were motivated to spend money by the association of an item with a charitable cause" (no matter how tangential the connection might be).

Project(RED)'s manifesto (available on their website) bears this out:

"RED is not a charity. It is a business model. You buy RED stuff. We get the money. Buy the pills and distribute them. They take the pills, stay alive and continue to take care of their families and contribute socially and economically in their communities.

If they don't get the pills, they die. We don't want them to die. We want to give them the pills. And we can. And you can. It's easy.

(The kicker line:) All you have to do is upgrade your choice."

While the founders of Project(RED) may think consumers weren't tuned into the blatant cynicism of such a statement, it would appear that in this, too, they underestimated their consumer.

High minded as RED may have seen itself, I think consumers saw through the "raising awareness" ploy. After all, 'awareness raising' seems to be all about a consumer experience, whether it is buying a pair of jeans or walking the Avon 3-Day Walk Against Breast Cancer. People are finding out that very little of the money they spend (or raise, as in the case of Avon) is actually seeing it's way to the charity (it's "called overhead" and it's the key issue in examining the effectiveness of any charity), and they are getting hip to the fact that this may be just a high-minded appeal to conspicuous consumption.

www.langtry.blogspot.com
  By rboriack | Des Plaines, IL March 6, 2007 12:22:23 pm:
As a person who works within a Christian faith community and organization, I think doing good while working hard to live the 'good life' with the blessings of pop culture, businesses, and celebrities might be shaping a false sense of freedom in us. We are freed from considering the messy parts of caring for the poor and sick. We are freed from having to change our everyday habits and the discomfort of self-reflection. We are freed from having to work to influence or change certain aspects of pop culture, society, and the corporate world. However, this kind of freedom crashes right into a different understanding of freedom that is carried by many faith communities.

They may be giving $10 of the $200 you spend on an iPod or wristwatch to fight AIDS, but if you give the same $200 directly to a well organized social ministry or relief organization it's a pretty safe bet that a greater percentage of your $200 will go to the actual relief work and finding solutions. And you can't put a price on showing up at a women's shelter and offering your time or spending time online to learn about the causes and solutions for hunger, poverty, or AIDS.

Give up two days of shopping each year and use those two days to organize the young people of your congregation or community to raise money and awareness for a particular social issue in the world or in your local community—or both.

Forget about being a "good looking samaritan." It's really about being open to changing one's way of life, and to being changed.
  By Ben | VALENCIA, CA March 6, 2007 01:35:29 pm:
The flipside is the fact that many U.S. consumers are tired of being doormats for every global cause. Consumers are relentlessly approached to deal with external issues and most of the time is to give money to address symptoms and not to treat the condition, such as the greater corruption of Africa it self and the abuse to their own.
America's middle class are finding enough issues in their back yards and buying RED does not do a thing for internal issues we are facing today or external underlying conditions that plague Africa, Mexico, etc. etc.

On a positive note the U.S. continues to pour out millions to global issues and there are many organizations that are working passionately to save lives and make a better future, but we need to focus on making other nations become more responsible and accountable for their neglect and corruption.
  By mirwex68 | Toronto, ON March 6, 2007 01:47:44 pm:
The sad part is that $100 million has gone to waste. Yes, the campaign can "potentially" bring in more money in the next 2 to 5 years, but why couldn't that money have gone directly to the charity? Why couldn't they take at least half, $50 million, and made a direct donation? The money is needed NOW .. not in 5 years or 10 years from now. By then, it might be too late. It was a good idea in theory, but spending more than .35 for each $1 raised, is a HUGE waste of time, money, and resources. These people should have consulted professional fundraising firms and done some market research ... celebrity endoresment means nothing in this day and age.
  By johnsmith | San Diego, CA March 6, 2007 02:08:40 pm:
A for profit donation campaign? How much of their revenue actual goes to help? - Still undetermined. This campaign is a great idea, but lacks a realistic business model. Big corporations like AmEx, Gap, Apple, Moto, and Armani are in it for the wrong reason as well. Image spin and profits. Which are diluted by being involved in the venture in the first place. In the long run Africa isn't going to be changed by this campaign, but its meager results could realistically put a dent in starvation and poverty in our own nation. The poor people of the United States need help too. Then again redirecting the $100 Million for launch to donation would have help to.
  By arc901 | LA, CA March 6, 2007 02:18:06 pm:
well i wanted a tshirt when they first came out but when i went to the gap and saw the pricetag i immediatley said no thanks.

i wanted to get 3 of them but not for that price, sorry.

m.
  By jonmrich | MASON, OH March 6, 2007 02:45:03 pm:
Here's a simple problem really...true story...I am in Gap this weekend and hear the employee checking out the woman next to me. She shows the customer two Red pins with the following quote, "Would you like to purchase one of these pins? This one is $1 and this one is $5. 50% of the profits go to help fight AIDS."

Perhaps the customer next to me was more polite than I was because she simply said, "no thanks." What I wanted to know (I wasn't even pitched a pin) is where does the other 50% go?

People aren't stupid...they can instantly sense something isn't quite right during a sales pitch. In this case, how come it is not more transparent where the other 50% goes? The question is if this is a sales problem or a marketing problem.

Either way, it appears that Red is in deep trouble.

JMR
Focus Fields, LLC
  By ashaaa7 | Sugar Land,, TX March 6, 2007 03:47:10 pm:
When I went to the GAP for the RED products I was shocked how poorly made these products were!

There is no way I would buy a T-shirt, even for a noble cause... that could have been used as a dust rag after wearing once!!

Donating directly to the cause always has a much better impact!!
  By Jodi | Los Angeles, CA March 6, 2007 04:02:04 pm:
Welcome to capitalism. If corporations would actually give a bigger percentage we wouldn't have to try programs like this. If people actually gave $200 we wouldn't have to try programs like this. This is a new model. This is an experiment...

Corporations aren't going to give profits to these causes without return. The campaign is trying to figure out a way to put our gross consumerism to work. Maybe there are some kinks now, but at least someone is thinking about this shit.

We are lazy. We would rather click a button on our computers than go out and put in our time and labor to help.

Let's focus on the real bad guys and not bash Bono and the people at (Red) for trying to do something great - something revolutionary.

$18million is more than they got before this things started - especially from any of the companies that are on board. And certainly from any of the people who would rather have an iPod than help Africa.

I say "way to go for trying." And then I pose the question...how much has YOUR brand given? How much have YOU given this year. For some (most?) people that $10 for their Nano is the most they have given in a year. If we have to throw shiny popular objects in people's faces to get them to give back, well, let's do it.

Giving back is a good thing. And if our capitalist society isn't enlightened enough to put in the real time and work to do it, then this is one positive step to figuring it out. It hasn't even been a year...give this thing time to change evolve and work itself out.

Say what you want, but Bono has done more for this cause than any of us sitting here lazy and chatting about it on Ad Age...soaking up our huge paychecks which we get be luring people to buy more.
  By sbonert | chicago, IL March 6, 2007 04:56:15 pm:
Quite simply- The products were outrageously overpriced. I would rather give my money straight to the cause than spend $50 for a tshirt.

Nice try- But next time take a real world approach and make quality products at an affordable price.
  By szdavis25 | Charlottesville, VA March 6, 2007 06:22:48 pm:
I have to agree with everything being so overpriced. I was really excited when I saw this get started on the Oprah show. BUT, then when I actually went online to try and buy something I just couldn't afford it. Most people don't have that kind of money. I went to gap just recently and thought ...woah maybe someday when I can afford it. I knew right away that they hit the wrong market. Maybe if they cut prices by 50-75% off. Then I would consider buying t-shirts and etc.
  By Jen | Minneapolis, MN March 6, 2007 07:12:35 pm:
As many people have said, this article brings to light a campaign that is very controversial, for many reasons.

I find all of the comments to be enlightening. Each one points out fundamental aspects of our profession, each being valid. The question it seems that needs to be answered is which aspects are the most important? There are good arguments for all sides, and that is just in this opinion area! I'm proud to be part of such a quality discussion.

On another note, I find it highly interesting that no one has said anything about the "Pink" campaign for Breast Cancer (or Yellow for Lance Armstrong & Testicular Cancer). Marketers have sold "Pink" products with the claim that part of the proceeds will go to help the fight against breast cancer, rarely does it say the amount given. Others don't even say they'll give money to the cause, probably just hoping consumers think they will be! The Red Campaign did come after Wear Pink for Breast Cancer, which is still ongoing. Interesting...
- WQ - MN
  By J. | Las Cruces, NM March 7, 2007 12:07:31 am:
My brother is a manager at a Sprint store, and showed me a life-sized cardboard cutout of a shirtless snowboarder holding the RED Motorola. It was to be displayed in the store, but was instead shoved in the storage closet. It was...inappropriate - his pants were worn waaaay too low. The Sprint employees were shocked that they were to even have this thing out for customers to see, and corporate emailed all Sprint stores recalling it before they were displayed. I couldn't help but think what a colossal waste of money just that particular piece was.
  By miniscusreadsinvalid | boston, MA March 7, 2007 01:05:05 pm:
With a idea such as (RED), its important to look at the form and the function of the business and marketing models as they stand in relation to the cause.

(RED) supports a cause very abstract to most First World consumers- advancing the fight against AIDS in Africa.

This cause is more detached from its audience than say Breast Cancer. This is due to the nature of the typical contributor. In the case of Breast Cancer, most donations are made by people directly or closely effected by the disease
In the case of (RED), they are asking the audience to dontate to a cause somewhat detached from thier lives.

Instead of a typical direct-giving model, which is more effective with a more "personal" audience, the model to treat the African Aids crisis enhances itself by taking on a more detached marketing strategy.

Not only is the core pool of supporters broadened, but the visibility of the cause takes on a whole new realm of accessibility to an otherwise detached audience/consumer.
Those who may not have felt connected to the crisis can now use the brand in a way that makes sense of thier invovlemnet in both giving and the African AIDS Crisis.

While I agree that direct giving seems much more morally valid, I also believe certain (pre-existing) channels can be used as tools to connect and activate an otherwise overloaded, isolated culture of the individual.
  By jglueck | NEW YORK, NY March 7, 2007 01:41:31 pm:
Both these comments and the article seem far too harsh to me. At least Bono is directing all this energy from the private sector from just advertising materialism to merging good causes with consumer purchases. Some moral purpose is better than none, if it makes companies compete to align with good causes, and compete to show effectiveness over time.

The article mentions that private non-government donations were just over $1M a year for the last few years before RED. $18M in a few months sounds pretty good compared to that rate.

-- New York NY
  By BRITT | SANTA MONICA, CA March 7, 2007 03:41:36 pm:
The article, like most of the comments, missed the point. (RED) was not designed to replace charitable giving. It was designed to bring a new stream of money to the Global Fund. Bobby Shriver and Bono and their team have accurately found that most people believe in causes, but DO NOTHING. If you can make people give, it is a one-time thing. The (RED) products idea is designed to create a sustainable revenue stream. Plus, (RED) has not spent anything on advertising. GAP, Motorola and Sprint only spent money on advertising that they would have spent to sell their products in some other way. So, where is the harm? Companies who have an obligation to employees and stockholders to make profit are making a profit, people are getting products they want, and the Global Fund is already up $18MM from where they would have been. How can you find fault with that?

Some of the products are expensive, but that is part of the marketing. How many of you are wearing your pink ribbons or yellow armbands still? Those campaigns raised money by creating quick buzz and a fad. They are not ongoing revenue streams. To maintain cool factor, the products are somewhat high-end. They need to be aspirational to maintain a sense of cool. If everyone wore the (RED) GAP t-shirt, nobody would want it.

Before you criticize the (RED) efforts, make a list of the money, effort, and intellectual thinking you have donated this year.

Santa Monica, CA
  By STEPHEN | TORONTO, ON March 7, 2007 04:32:50 pm:
Let me get this straight. We are criticising a campaign that generated a great deal of free awareness for Red and gave the Red campaing 18 million dollars. Are we not setting our standards a bit high when free awareness and a charitable donation of 18 million is not enough.
  By doctorbonkers | Paramus, NJ March 7, 2007 05:11:05 pm:
2 questions for all:
1. Did Motorola, Apple, AmEx, & Gap use 100% African owned businesses to produce the Red products?
2. Did The World Fund, Motorola, Apple, AmEx, & Gap use 100% African owned business to at least produce the intellectual component of the Red ad campaign?
Of course the answer is NO! But this begs the follow up question, why not hold these entities accountable if they are really in it to "save lives" and not trade in profit off of others suffering? If the answer was yes to both those questions, a lion's share of the $118 million would have at least flowed into Africa in one form or another to help slay the twin scourges of AIDS and poverty which are inexorably linked in Africa. If you are in a business and you invest $100 million and recover $18 million for the expenditure in this amount of time, the business would be shuttered if it were not "for charity". Especially since the products are of substandard quality for the cost charged and getting a bad reputation for it. How many of you reading this can afford to run a business like this? There has to be a better model to help these people as well as hold the celebrities and World Fund's big wigs' feet to the collective fire to do better for these people.
  By ALISE | PORTLAND, OR March 8, 2007 07:56:31 am:
Where are they advertising this? Until this moment I'd never heard of it!
  By mirrormaker1 | New York, NY March 8, 2007 09:35:32 am:
I dare Ben Davis of Word Pictures Ideas to share a case study from his company that demonstrates a new brand launch that isn't in a negative expense to revenue ratio in the first nine months. Criticizing a good idea with a bad parody idea is just plain cynicism. How many lives do you think you'll save being cynical, Ben?
  By ALISE | PORTLAND, OR March 8, 2007 10:12:54 am:
I bought a (RED) Nano because I wanted a new ipod and decided that I might as well throw a little money to a good cause while I was at it. I had, before this latest glut of negative publicity, assumed that the other (RED) merchandise was similar to my iPod purchase-- something at the same price point but that benefits a good cause. No wonder the campaign didn't take off, if generally the merchandise was shoddy *and* more expensive.

And I agree-- the ads were confusing, if lovely.
  By jguidry | NEW YORK, NY March 8, 2007 02:23:36 pm:
I think the comments by the non-profits overlook the fact that consumers are going to buy "an overpriced item they don't really need" anyway. At least this is a way for the charity to benefit. It's a completely separate issue to try to change the behavior of society to be more selfless and philanthropic. Bono is capitalizing on the current state of affairs.
  By Ilovepot54 | Edmonton, AB March 8, 2007 02:39:35 pm:
Boner can hype it up all he wants, but it obviously wasn't enough...my heads wrapped around the media all day, and I never really heard much about the campaign. In fact I totally forgot about it until now. Maybe celebrities should realize that just rereleasing same old shit product in other colours just for so many cents to go towards aids is getting ridiculous and old. And maybe Boner shouldn't label us as such a materialistic society as the world is an ever-changing place and the less materialistic are usually more willing to give. And maybe encouraging the materialism so you can look like a big important man with a cause is actually ruining the world a little more in turn.
  By Michal Ann | San Francisco, CA March 9, 2007 11:35:27 am:
Michal Strahilevitz, marketing professor at Golden Gate University, San Francisco, offers her perspective on cause related marketing and the Red campaign:

This week, Ad Age reported that the Red charity advertising campaign—endorsed by some of Hollywood's hottest celebrities, and one of the most prominent cause-related marketing campaigns to catch the public eye—has raised only $18 million since its launch a year ago. However, the marketing costs were significantly more, with some estimates as high as $100 million. Does this mean the campaign was a flop? No, not necessarily...


According to Professor Strahilevitz:

Cause-related marketing is not just about the short-term sales benefits and immediate fund raising. My research shows that CRM can also help marketers to gain long-term brand loyalty as well as improved employee morale. Similarly, the cause being promoted can gain more than the money raised—they also gain publicity that can lead to more donations unrelated to the campaign. Consumers can also gain by feeling better about their purchase choices. My own research suggests consumers often feel guilty for buying luxury or self-indulgence products they don't need, and that cause-related marketing campaigns can enable consumers to feel good about purchasing things they might otherwise feel guilty about. So when you want to evaluate the success of a CRM campaign, you need to go beyond short-term dollars and cents.

Product Red: The jury is still out

Product Red improved the brand image of partnering companies such as Apple, Motorola and the Gap, because consumers saw that these firms were involved. It helped consumers feel they were making a difference by the product choices they made. And the publicity around the campaign demonstrated that many celebrities, including Bono, Spielberg and Oprah, cared enough to donate their time to a good cause. Efforts like this are part of what has made charitable giving and fundraising become downright fashionable. Overall, the campaign was excellent for awareness of the global AIDS problem. Since the campaign began, the number of individual donations directlyto the global fund (unrelated to Red product sales) is in fact up from the prior year. So, although, so far, the campaign raised less for the Global Fund than they spent on marketing, the long-term benefits to the cause, the consumers, the marketers, their employees, and even the celebrities that got involved suggest that the campaign was far from a flop. So before anyone at Ad Age (or anywhere else) suggests this campaign has been a failure, I think they need to look deeper, and remember that few brilliant marketing efforts are just about short-term revenues.

Of course, it is possible that the campaign could have been executed more effectively. For example, some consumers complained that they wanted to pick the cause-related version, but they simply did not like the color red. Still, the free publicity was good for everyone! So while I might not give the execution an A+, I definitely have to give them at least an A- overall for a great effort that raised money, improved brand equity and raised our awareness of an extremely important cause. That does not sound like a failure to me.

About Michal Strahilevitz
Michal Strahilevitz is an Associate Professor of marketing at Golden Gate University in San Francisco. She has published her research on cause-related marketing in the Journal of Consumer Research, the Journal of Consumer Psychology and the Journal of Non Profit and Public Sector Marketing. She is also on the editorial board of the Journal of Non-profit and Public Sector Marketing.
  By memememe | cuba, MO March 10, 2007 07:29:06 pm:
A high profile world-renown human said let's market the color (Red) for everything we do. How about owning, marketing, promoting, advertising, making sales, sparking commerce and charity from you buying something that is (Red) in color......like as in a home sports team for example. What an amazingly simple and wonderfully ROYGBIV constructed idea. So what.........now for the next 30 years every time I buy something red some idiot is putting money in their pockets. What will happen is that I will demand never to have anything red as some form of backlash??!! Here is what you do Mr. Yoko Bono......alter the colors. Look at roygbiv and next have (orange). [(Orange) you glad you read AD AGE?] Read that again.....alter the colors. Advertise in advance so people will collect and wait for their "favorite color". Even Monty Python uses it as 1 or 3 questions. Some customers will order their favorite color product IN ADVANCE. If someone wants a pair of (Green) Jeans by Levi due out in October to help the cause....they are going to have to wait till October. It is sheer torture. What the hell are they going to look like? Or......." Say (Yellow) to your neighbor while using a grill from Lowes. (YelLowes) knows grills." In other words.......there are many solutions to this (Red)undant ad campaign. Ps....2 of my favorite songs are from U2's Joshua Tree.....(Red) Hill Mining Town and Mothers of the Disappea(Red).
  By Michael | Toronto, ON March 11, 2007 10:34:20 am:
All that keeps coming out at me when I read these comments is the serious need for people in the ad industry to take business courses. Simply put - if you spend $100M and you make $18M - your ROI is not 18%, it is -82%. I think I will ask my 5 year old whether or not she can figure out that spending $100 to make $18 is a poor decision or not - I will get back to you.
  By gtinoz | Paddington, March 24, 2007 02:48:25 am:
The facts are the original article had woeful errors. Red is a young brand and initiative and it is already making a positive difference.
Unless I've missed something, it's not as if AIDS or poverty has gone away or been solved... have they?
Charities, the UN, governments and foundations are all playing their part but there is still more to do. And it's not as if we can stop consumerism overnight - so let's harness it where we can.
Let's embrace (or at least give it a chance to work) this new and potentially sustainable model of getting money from corporates (who to date don't give significantly) to help end such unnecessary human suffering. Don't we need all the efforts possible? They're all valid and needed if you ask me.
  By Factor | Toronto, ON August 20, 2008 10:53:37 am:
Please stop harping on the Gap. While the company has been on the front line for (Product)RED, [which, by the way, is the correct campaign ID] the Gap hasn't spent much more on marketing than they usually do. They use the same types of marketing in their windows and inside the store, use the same calibre of celebrities in their ads, dress their mannequins with jeans and scarves and thirteen layers at a time at the end of the summer, and to be completely honest, $30 is not at all ridiculous for a tshirt! I'm sorry we don't all shop at Wal-Mart. Maybe they should do (Wal-Mart)RED. See how cheap your clothes are then, hobos.

The quality of some of the thinner items is only lacking because everything is EITHER made in Africa OR made using African materials. So the shirt's made in Indonesia. It's made with crappy African cotton that's not nearly the quality of what we grow commercially. The poor Indonesians are trying their best to sew you a shirt, and the shirt's ripping before it's finished! So it's a good shirt but the stitching comes out -- probably because it was made by AFRICAN people in AFRICA that are NOT in a sweatshop that constantly governs QUALITY CONTROL for the CONSUMER. (Gap)RED is creating jobs for these people, it's not the Gap's fault Africans don't work as hard as the Indonesians.

People need to do research before they start criticizing. The (Gap)RED donation to (Product)RED not only totals the most, but percentage-wise is more than any other company's donation: 50% of the net profit from each item. Gap's profits on regular-priced items, as we know, are quite high. Add an extra $7.50 to the price of the tshirt and that net profit goes up by an even $7.50. Converse only donates 5% of their (Converse)RED profits. And those little $1.00 red pins that say "(GAP)" on them? 100% of what you spend on that pin goes to the Global Fund. If the cashier gets 100 people to buy one of those pins [which are pretty cool, by the way] then the Global Fund makes $100, no strings attached. And yes, (Product)RED does go on sale. The net profits are decreased, but the contribution is still there. So if $30 is too much to spend, wait until it goes down to $9.97; Gap's still probably making at least $2 on the shirt, so you're donating $1. That's like buying a pin, except you get a shirt to wear instead. Not a bad deal.

(Gap)RED has spent much less money than other companies involved in (Product)RED, and confined the majority of their advertising to the store windows. (Motorola)RED and (AmericanExpress)RED have both advertised on giant billboards and have painted the sides of countless buildings across North America.

All in all, leave the Gap alone. If you don't like the quality, shop (EmperioArmani)RED instead, where nothing is made in Africa and your donation is practically meaningless to the company. Just be prepared to pay Armani prices.
  By promotion123 | Arana HIills August 15, 2009 02:04:17 am:
I guess with this type of promotion there needs to be a bit more market research and less just outright spending. However due to the number of comments here perhaps there are still ongoing results and the final count should perhaps not be made so quickly. But perhaps nobody is monitoring the ongoing results and has just stopped at the total cost and result at the date published? Any further thoughts on this aspect?

Douglas
http://www.promotionproducts.com.au/
  By simoncgy | San Diego, CA August 31, 2009 03:12:02 am:
Hmmm. Only $18,000,000?

That's only about 109,589 doses of HIV medication per day, for one full year. 109,589 lives changed for the first year sounds like a success to me. If every company participated, every African child with HIV would have a brighter future. Not just 110,000. Despite the critics, this is a valiant effort from corporate enterprise that is otherwise obligated to do nothing. When the critics have themselves handed over $18 Million, then they have the right to complain about the efforts. Until then, they hypocrits.
  By gmiddleton | Indiana, PA August 31, 2009 11:49:17 am:
As the adage goes... "You have to spend money to make money"... The amount they've made so far really isn't that bad when you stop to think about it.

Best,

Gaston
http://www.Ultimate-Resell-Rights.com
  By BPoston | Raleigh, NC September 8, 2009 09:08:07 pm:
Maybe they should have included applicance manufacturers. Red is the hugh "in" color right now. Last year it was blue, and now NObody wants a blue washing machine.
In any case - 18 million is not a shabby take, unless of course it took 19 million to raise it.

Single Golf Clubs
:

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