As far as I remember (RED) was the first real purposeful brand that we know. Bono and Bobby Shiver founded (RED) just 10 years ago. And their foundation model was very inspirational.  The foundation did not focus on being another charity but a purposeful business model and they asked the big corporations to be partners. They did not want them to donate cash and issue a press release as a CSR project but to design co-branded products. It could have been easier for everybody to produce cheap silicon wristbands and sell them in partnering stores, however (RED) wanted them to be innovative and add design value. Very smart. More than that, due to the legal reasons, the brands had to limit their contribution to the foundation. 50% of the profit from the products sold was used in the cause.

Chris Rock in RED

Most of the current partners like GAP, Motorola, Dell and Amex joined (RED) very early and produced special design products. They made the cause famous and also made profit. Yes, it was nothing like a CSR or charity, it was a collaboration with mutual benefits. Nothing different than what Tom’s does, but only in collaboration with a foundation.

Dell in RED

Since it was illegal, no one had the chance to contribute with 100% profit. However, in time, some of the partners didn’t even shared the 50% according to Wikipedia. So the model got a little bit complex. Some (RED) products have more contribution than other (RED) products. But they all had the same brand value. So was it fair for the ones that were contributing more? Since it is a purposeful business model, how did the foundation balance the equities of the brands?

What I assume is, it should have turned into a sponsorship deal at one point. The more you give, the more brand rights and exclusive benefits you get… Hmm. We started with a nice cause, then it was a business model, then now it is a sponsorship deal. Confusing.

Let’s change our perspective and try to make it simpler. Now think about a celebrity: if a pop star makes an album for a charity and makes profit out of it. It can be understood, because (s)he puts a lot of effort and time into it, and (s)he needs to survive. So it is basically sharing. But would it be a scandal if (s)he put adverts on TV about her own ‘goodness’? Or if (s)he makes a PR case out of it, obviously using the cause to make fame for her/himself. Wouldn’t it be criticised?

It is simple… If you make people feel perplexed about your “purpose”, they will punish you. They want you to be fair and transparent, nothing else. It is the same for brands. If you want to help a cause, help it. But if you try to “make” some positive associations over a charity or a CSR, you will not be appreciated. And worse than that – you will give harm to the cause.

Bono in RED

Going back to (RED); co-creation model had structural transparency problems, but this was not the only income. The foundation was being fed with donations as well. And many celebrities helped to collect donations through adverts and made “Lazarus Effect” famous. This method also had a tiny problem: many stakeholders, including AdAge,  accused the foundation for overspending on advertising. And the foundation, once again, reminded that (RED) is not a charity but a business model and they were trying to raise awareness. Hmm. To be frank, before Lazarus Effect, I had no idea how affordable it is to help an AIDS patient. But again, I would prefer to be told that I was contributing to the awareness of the cause and not buying pills for patients.

Coke in RED

These were the old days… Then “purposeful brands” craze happened. Interestingly, none of the old fellows thought about reminding their (RED) contribution and build on it. Again – by looking at the Coca-Cola commercial below, I assume that the business model was corrupted. Coca-Cola was a donor with a generous deal and most probably they noticed that “the business model” was not paying off for them and made this desperate attempt to get the most of their sponsorship“:

Scarlett Johansson in RED

Briefly, I still believe that the business model of (RED) was revolutionary and they had a superb launch in Davos. There are many things to learn for all brands that are trying to be a “purposeful brand”. However, there was a lack of transparency about the dynamics of the model. Nobody knew that partner brands were making a profit, nobody knew most of the money was being spent to raise awareness, nobody knew which brand was contributing fairly… These all added up do not necessarily mean that (RED) would die. I can see many opportunities for a relaunch and make (RED) bold again to fight against AIDS with us, with celebrities and with (RED) partners.

UPDATE: Apple launched a (RED) iPhone

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