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.

I love Product(RED) items. Particularly the ones from Apple - the red iPod nano has always been something I’ve wanted. I even got the matching V-Moda Vibe earphones ready and waiting. As Wayne Campbell said, she will be mine. Oh yes, she will be mine.

The specially-made items are, if you don’t know, editions meant to generate charity funds to fight AIDS and HIV in Rwanda. A portion of the sales from the (RED) items like watches, cellphones, laptops, t-shirts, colognes, credit cards - and iPods - go to this fund. For example, Motorola contributes US$8.50 for each sale of the (RED) Razr, Gap gives 50% of their net profit from (RED) clothing items, and Amex gives 1% of all transactions from their (RED) card. A couple editions of the iPod nano have been made for this campaign, started a year ago by Bono.

After the first year, consumers have generated US$22M for Rwanda, but controversy is heating about the figures, which detractors claim is grossly misrepresented.

Advertising Age magazine reports that the entire campaign has raised only US$18M, but has spent US$100M in advertising collectively. People organizing the campaign claim that they’ve raised US$22M, and have only spent US$50M in advertising. Huh? Ex-squeeze me? Baking powder?

Whatever the case, it’s apparent that they spent more than they raised - and people say that the cause would have been better served if the money spent advertising was given straight to the cause in the first place. Of course, no one really knew this coming in a year ago, but maybe a bit of research and planning might have made the project a bit more worthwhile.

At least they made nice iPods, huh?

More on the issue from The New York Times.

I was in an crowded elevator at the La Salle College of St. Benilde the other week, and I was a bit puzzled at the muzak being piped in. It wasn’t too clear, but I could tell it was a noisy metal band blasting away. Metal muzak? I listened closer and was startled to realize that it wasn’t from the elevator sound system - it was coming from earphones plugged into the ears of a student at the back of the car. Dear God, I thought. Is he deaf?

If he isn’t yet, he will be soon.

iPods are capable of hitting 100 decibels - the equivalent of standing 10 ft from a pneumatic drill running full-tilt-boogie - and just listening at that level for 15 mins can seriously damage your hearing, say experts. New models of iPods can run for more than 12 hours straight, so you can imagine the potential for damage. Even if you don’t crank it up all the way, the cumulative damage from listening at high dBs for 21 hours a week, the average amount of time a typical user keeps the buds plugged in, can be very disastrous.

Telegraph.co.uk reports that Apple is finally acknowledging the problem and has recently put in a patent for a system that automatically adjusts the volume to safer levels in forthcoming iPods and iPhones. Apple’s patent states

Since the damaging effects on users’ hearing is both gradual and cumulative, even those users who are concerned about hearing loss may not behave in a manner that would limit or minimise such damaging effects.”

Apple’s system will calculate the listening levels and length of time the music has been blaring and will gradually lower the audio output to less harmful levels. It will also calculate the “quiet time” between turning it off and then turning it on again so that the level can be raised higher after a significant rest period for the user, although it has been determined if this automatic level control can be optionally shut off.

Ok, ok, we hear ya. We’re turning it down.