Sat 9 Feb 2008
(red) initiative’s finances are being questioned
// category: business, thinking
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The New York Times reports that Bono’s (red) initiative is coming under scrutiny as some are beginning to question how much the organization raises versus the marketing costs that have been spent.
They criticize a lack of transparency at the company and its partners over how much they make from Red products, and whether they spend more money on Africa or advertising.
“Look at all the promotions they’ve put out,” said Inger L. Stole, a communications professor at the University of Illinois. “The ads seem to be more about promoting the companies and how good they are than the issue of AIDS.”
In the Super Bowl ad Sunday, which promoted Dell’s recent Red debut, a man buys a Red laptop and finds himself cheered in the street by strangers and kissed by a beautiful woman. At the end of the commercial, three screens flash in rapid succession: “Buy Dell. Join (RED). Save Lives.”
In its March 2007 issue, Advertising Age magazine reported that Red companies had collectively spent as much as $100 million in advertising and raised only $18 million. Officials of the campaign said then that the companies had spent $50 million on advertising and that the amount raised was $25 million. Advertising Age stood by its article.
To the best of my knowledge, Red does not do any marketing of its own. Any marketing is done by the partner companies who incorporate Red in their marketing. What cannot be questioned is the fact that Red has raised millions for its causes, which have benefited many lives.
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Over all, more than $59 million has been contributed by Red and its corporate partners to the Global Fund. Red-financed projects have helped put more than 30,000 people on antiretroviral treatment and provided more than 300,000 H.I.V.-positive pregnant women with counseling and treatment, according to data from Red and the fund.
Red and its donors have contributed nearly all the corporate money that has gone to the fund, which had $2.4 billion in 2007. This made Red the 15th-largest donor — more than Russia has given so far, and more than China, Saudi Arabia and Switzerland have pledged.

