Jesse Derris, an Account Manager at Sunshine Sachs & Associates, the PR group for Product(Red), got in touch with the Doodler to give the real story behind the previous post we wrote about the campaign. So as not to make any mistakes, we reproduce Mr. Derris’ reply here verbatim:
Hi Adel—
Realizing it might be difficult for us to speak on the phone, I wanted to write to you to correct some of the facts in your story regarding (RED). We’re so glad that you like the products!
First, (RED) products generate funds for the Global Fund to fight AIDS across Africa, not just in Rwanda. (RED) money is currently at work in Rwanda, Swaziland, and Ghana. While you’re right that a portion of sales of (RED) items goes the Global Fund, that portion is at least 40 percent of gross profits – a very large amount.
Up until this point, (RED) has generated more than $60 million for the Global Fund, $22 million of which is being used in Rwanda.
The Advertising Age story you quote in your post is from March 2007, almost a year ago. That story accused (RED) partners of spending upwards of $100 million on advertising and generating only $18 million for the Global Fund. However, both numbers are false. Advertising Age has never revealed the source of the numbers they used, nor how they were calculated. In short, we have no idea where they came from.
Now, back in March 2007, the actual figures were an estimated $50 million spent on advertising, generating $25 million for the Global Fund. This is a very successful figure. Why?
The amount of money that went to the Global Fund at that point – $25 million – represents 40 percent of the profits. Remember, the companies get to keep the other 60 percent of their profits. The reason we do this is because (RED) is a business model that is meant to help companies give to the Global Fund and make a profit at the same time. By ensuring that companies profit on their (RED) partnership, we can make it sustainable in the long run. Unfortunately, when Advertising Age calculated their figures, they left out the other 60 percent of profits.
It is important to point out that (RED) itself doesn’t spend anything on advertising. Our partners each divert a portion of their existing advertising budget towards ads for their (RED) products. It is money that will be spent on advertising whether or not (RED) exists. It’s not money that would be earmarked for charity. We’re so grateful to our partners for advertising on our behalf.
I hope this is helpful in explaining what (RED) is and how we are doing.”
That’s that. Straight out of the horse’s mouth. Now to get that red nano.
