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Friday, June 23, 2006

Trend: Conscious Consumption

Cause-marketing spending will rise 20.5% this year to $1.34 billion, projects sponsorship consultancy IEG, Inc.

Marketers spent $1.11 billion on cause-related sponsorships and activation last year, according to IEG research. The projected increase makes cause marketing the fastest-growing segment of sponsorship, outpacing the industry's overall growth rate of 10.6% to a projected $13.4 billion, per IEG.

"Companies are realizing the powerful marketing benefits that can be gleaned from nonprofit affiliations," said William Chipps, senior editor of IEG Sponsorship Report, in a statement.

IEG credits marketers' efforts to reach teens and young adults via cause tie-ins, citing FedEx and The Home Depot's "alternative Spring Break" campaign with United Way of America and MTV that sent college students to construction projects in hurricane-damaged communities.

The projected growth gives cause marketing a 10% share of overall sponsorship spending (up from 9% in 2005). Sports sponsorship, by contrast, is expected to fall to about $8.84 billion, 66% of total sponsorship spending (from 69% last year).

The marketers most active in cause sponsorship: specialty retailers, automakers, banks, financial services and non-alcoholic beverages (see chart). Industry segments slowing their use of cause tie-ins: airlines, beer, personal-care products and telecommunications.

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