Motorola, The Gap, Emporio Armani, Nike's Converse and American Express will jointly launch a new brand in the U.S. covering a range of their products in conjunction with U2 singer Bono in the fall.
A portion of the sales of the brand, Red, will benefit The Global Fund to Fight AIDS, Tuberculosis and Malaria. The launch combines two unusual elements: It features a range of differing companies employing the same brand; and although it benefits a charity, it is a for-profit effort, so companies will have an incentive to make Red products (and the aid they generate) permanent.
Previous corporate charity efforts have sometimes required all sales from a brand to go to charity, and therefore the programs are temporary by necessity.
"When we originally went out to the companies, they said, 'We want to give you all the profits,' and we said, 'No," explained Len Short, cmo for Red in Los Angeles. "If you keep the profits it becomes a business for you and it will sustain."
The question remains: Will Red become a significant, permanent brand for Africa, where most of the money is expected to go, or just another corporate-giving afterthought?
"Does Red have an opportunity with younger people? I'd say yes, it does, and a disproportionately greater opportunity with teens and late 20s than with [that cohort from previous generations]," said J. Walker Smith, president of Yankelovich in Chapel Hill, N.C.
The effort will be an ambitious one. According to Short. Motorola is already manufacturing a Red version of its Slvr phone, and The Gap will produce a whole new line of clothing carrying the Red brand, which will be featured in a Red section of its stores.
Armani has a Red sunglasses brand available in Europe, but will launch a full line at London Fashion Week in September. Converse will sell a shoe with an Africa-inspired print. American Express, which already markets a Red version of its card in the U.K., is expected to join the U.S. effort in the months following, Short said.
Each company will market their products individually, setting their own ad spends. However, Short said, they will all be working to a brand playbook written by Red.
Marketing-powered charity efforts have seen some success in recent years. Nike turned the anti-cancer Livestrong bracelets into an item that no teenager could be without. But the Livestrong effort has started to lose steam.
Red is probably more comparable to Paul Newman's Newman's Own brand of salad dressing: A for-profit business that donates a chunk of the sales to progressive causes in perpetuity. Each brand involved in Red has made a five-year commitment to their Red products, Short said.
The brand was launched in the U.K in May. The London Independent allowed Bono to edit the May 16 edition of its newspaper in conjunction with artist Damien Hirst, who is best known for one of his works that featured a dead shark floating in formaldehyde.
Bono abolished the front page—replacing it with an ad for Red—and devoted much of the paper to stories about Africa. Several wireless phone service providers in the U.K.—such as Orange, Cingular, T-Mobile and O2—donated 5 percent of their sales from Red-related charges.
The brand has been at least 18 months in the making. It started with the Bill and Melinda Gates Foundation, which had been discussing with Bono and Bobby Shriver, of the Shriver political dynasty, ways to channel commercially viable aid to Africa.
Using Gates' money, McKinsey & Co. developed a notion to involve marketers, who unlike governments or charities have clout in the market. Bono came up with the name, Short said, as an "emergency" reference, but added that the McKinsey plan was somewhat "confused."
Brand consultancy Wolf Olins stepped in and refined Red as a brand. The agency insisted that Red had to be sexy and attractive, rather than a charity effort. "Don't lead with guilt" was the mantra, said Wolf Olins' New York CEO Karl Heiselman.