Over the summer, I decided to move on from Digitas after four and a half rewarding years with the company and made green my full-time job. I now work for a venture-backed company called RecycleBank on their business development team. To say life at an early-stage company has been busy is an understatement, and Marketing Green readers have probably noticed a drop off in my blog entries over these past few months.  That is not a coincidence, and rest assured, I expect to be back with more routine entries on green marketing themes shortly.

A few words on RecycleBank by way of introduction. RecycleBank is a socially responsible company that makes money by doing good for the environment and local communities in which we operate. Our core business model is quite simple: we provide incentives for people to recycle more. And at the risk of sounding biased, our model’s pretty darn efficient. Wherever we deploy, we’ve been able to drive recycling rates through the roof.

Now that my current role allows me to practice some of what I’ve preached on this blog, I wanted to highlight a viral campaign we’re launching. In honor of National Recycling Day this Saturday, RecycleBank has launched The Cycle, a compelling video series that focuses on how materials are separated and reprocessed back into useful raw materials. 

Today, there is more and more emphasis being placed on cradle-to-cradle material use.  The Cycle provides an engaging and accessible story of how it is all done.    Click here to view the rest of the The Cycle series.

Interview with Adam Capage, Director, Utility Partnerships, 3Degrees

With the #1 renewable energy program in the US, the City of Palo Alto Utilities (CPAU) must be doing something right.  In fact, despite a formidable price hurdle, CPAU has managed to sign up over 20% of Palo Alto residents for clean energy, and is not finished yet.

Notably, when CPAU decided to aggressively market renewable energy to its customers, it decided to reach beyond traditional utility circles to engage the right marketing partner.  For that, CPAU turned to 3Degrees to educate consumers and convert them to clean energy.

Recently, I had the opportunity to talk with Adam Capage, Director of Utility Partnerships at 3Degrees.  We spoke of the challenges that marketers face when trying to shift consumers to renewable energy, the approach that 3Degrees takes and reasons why it has been so successful.  Here are his words:

MG: How do you partner with utilities?

AC: Essentially, we partner with utilities by leveraging their brand and their customer connections [and combine it] with our knowledge of how to talk to people about why they’d want to support renewable energy. 

The Palo Alto partnership was [our] first utility partnership [formed] in 2003.  When we partnered with Palo Alto, they had already had a green program operating for three years and it had not yet reached 1% participation. 

In many ways Palo Alto had the ideal demographics for marketing this product.  And so it’s very tempting to just think “Well hey, its Palo Alto, of course they’re at 20%”.  But, the product did exist for three years [before involvement by 3Degrees] without hitting 1%.  So, it’s a combination.  Yes, demographics are key.  But, you do have to talk to [consumers] repeatedly and get the messages out there and that’s what we’ve been focusing on. 

Since 2003, the participation rate has basically sloped upward the whole time.  Today, we’re actually over 20% now and we haven’t seen any slowing.  We keep kind of wondering if and when it will slow, but it hasn’t. 

Traditional thought was that there was low hanging fruit [to acquire] and then it would get harder to acquire people over time.  Instead, it seems that you can create new low hanging fruit.  As you talk to people, you make [renewable] an accessible, appealing product to new groups.  Another possibility is just that Palo Alto has such a huge percentage of their population with [the] perfect demographics [for purchasing renewable energy] that you can get an incredibly high penetration rate.

MG: Do you tailor your message to particular subgroups within the city?

AC:  No.  The real challenge is that renewable energy requires people to pay a premium and they have absolutely nothing [tangible] to show for it.  People for a long time tried to compare this to organic food or bottled water or other premium product.  And, you just can’t do that because with bottled water people think they’re getting [a personal benefit like] cleaner water.  With organic food they might be stopping themselves from having pesticides.  [Unlike with renewable energy], it’s not just about the public good.

[Marketing clean energy] is like a request for people to make a private contribution to a public good.  And that’s just damn hard. 

I think that the best parallel is public radio and TV knowing that people understand that the programs are very likely to continue whether or not they pay up, but they do it anyway.  With renewable energy we need to put a line item on the bill that says you pay more.  It’s very hard to make people get connected to what they’ve done.  So we try but you know we can’t be in the home everyday like public radio or TV. 

We focus on a message that you can make a difference and there are specific environmental benefits to purchasing renewable energy.  We link [environmental benefits] to specific energy usage and [provide] examples of benefits that are local.  And then we repeatedly try to get that message out there.

MG: Do you focus your message on awareness or consideration for purchase?

AC: When we start each [partnership], it is like going back to 2003 in Palo Alto; you start from ground zero.  It’s a cluttered market and it’s hard to break through so awareness is definitely our first battle.  

With Palo Alto I think that awareness has come a very long way.  I don’t think they’ve done research recently, but I bet it’s pretty high  so now we’ve got messages that simply say “just do it”.

MG:  What is average price premium for renewable energy?

AC:  It varies quite a bit around the country based on the premium for clean energy, current electricity rates and the amount of energy that is consumed.

In California the average household uses something like 500 or 600 kilowatt hours a month, where as we have a partner, Amerin, that is based in St. Louis.  Its Missouri customers use on average 1,000 kilowatt hours a month.

The premium for Palo Alto [residents] that convert [to renewable energy] is going to be between $5 and $7 per month I think.  For our partnership in Amerin, it’s closer to $15 per month on average. 

MG:  Aren’t renewable energy prices independent of oil price shifts?

AC:  The programs aren’t designed that way.  A few [utility tariffs] in the country are actually designed where the renewable energy price is essentially substituted on people’s bills for their traditional fuel.  Those programs have seen great success.   Everyone understands why they’ve seen [success] as they have a whole new message to talk about: price stability because [the price of] renewables never change.

Most programs are designed where the renewable energy premium is on top of what they already pay.  So the thinking [by consumers] is renewable energy is more expensive.  You aren’t actually getting the electricity from [specific] wind turbines anyway.  What your dollars are doing is allowing the utility make more investments in putting renewable energy into the overall mix.

Hence the public good part: your electricity comes on just like everybody else’s except you pay more.

MG: Are you actually paying for 100% equivalent renewable energy?

AC:  Yes.  Not every program in the country is designed the same. But, our five partnerships are all 100% usage.

MG: What are the key customer insights for purchase of renewable energy?

AC:  A few people talk about new technology and want to support it.  A few people talk about fuel prices going through the roof and we are beholden to the Middle East, so they want to support another source. But the majority just says “I want to make a difference”.  It seems like one small step, one small opportunity for [consumers] to do that.

MG:  Can the success of Palo Alto be replicated across the country or is this an anomaly?

AC:  20% might be an anomaly but I know that, in general, these [renewable energy] programs are underperforming.  We have five like I said.  One of them just started and so it only has a couple tenths of a percent participation.  But all together our five average 7.8% participation.  The industry average is 1.8%.  You can do this better.

MG:  What’s the secret?

AC:  I think that the partnership model is a really good one.  The utility has the customer’s eyes and contacts and, in most cases, the customer’s trust.  That is certainly true in Palo Alto.

3Degrees brings the messaging and dedication to execution.  The single best thing we’ve found is that you collect information about what channels and messages are working well and you just execute again and again and again and again. 

That’s not what utilities do; they are not marketing organizations.  We do the marketing behind their brand and no one ever knows our name.  We want it that way.

MG:  Do you think that the social narrative has changed given Al Gore’s movie a few years ago and just the growing reality and awareness of global warming?  Has that context enabled you to move the needle further?

AC:  It definitely helps.  We were out in front of movie theaters when Al Gore’s movie was released.  We set up tables outside to intercept people came out of the movie.

MG:  When you target utility customers, what kind of marketing campaign do you implement?

AC:  The campaign is continuous.  Email, bill insert, direct mail, events.  We’re spending money and testing different channels all the time except TV.

Yard signs are also used to bring to peoples’ attention that their neighbors have done this.  We get requests [for signs] saying I want to show people that I did this.

MG: Were there other ways that you tapped viral marketing or activated influencers?

AC:  We did holiday card campaign where we sent all Palo Alto participants a card that they could send to their friends saying “I participated in Palo Alto Green and you can too”.

We offer wind tours where we let participants come and then, hopefully, tell other people about going to a wind farm and seeing what their money is supporting. 

Interview with Tom Auzenne, Assistant Director, City of Palo Alto Utilities

Electrical power generation accounts for 40% of total annual greenhouse gas emissions (GHG) in the US.  Such a high concentration of GHGs is due to our reliance on highly polluting fossil fuels, especially domestic coal.  Yet, while the popular press focuses on the recent growth in renewable energy, it still provides only 2% of our total electrical needs today. 

Until recently, many arguments have been made for why adoption of clean energy remains slow.  Certainty, price ranks as the #1 barrier to broader adoption.  Other factors include reliability concerns and lack of education about the technologies.

Interestingly, Palo Alto, California has bucked this trend.  Over the course of several years, the municipal utility has partnered with 3Degrees, a utility marketing company, to encourage residents to sign up for its PaloAltoGreen program which provides 100% renewable energy from wind and solar power sources.  The results of this program have been astounding, with over 20% of all residents switching to clean energy.  Indeed, PaloAltoGreen is now ranked as the #1 green energy program nationwide based on participation.  

What does this mean for GHG reduction?  Well, it is quite simple: the purchase of 41.5M kWh of renewable energy translates into a reduction of 350,000 tons of carbon dioxide annually.

MG: Who purchases renewable energy in Palo Alto?  What is the mix between residential, commercial and governmental entities?

TA: PaloAltoGreen (PAG) is the City of Palo Alto’s 100% renewable energy optional program open to all residential and commercial customers with an active electric service provide by the City of Palo Alto Utilities. The program has about 20% of the customers involved, with residential customers making up on average 95% of the mix and the commercial customers at 5%. Our residential sales account for roughly 60% of the program sales with commercial and governmental making up the rest. 

However, starting with July 2008, both the City of Palo Alto (CPA) and the Regional Water Quality Plant (RWQCP) are increasing their commitment to buy renewable energy equal to 30% of their total usage, a ten-fold leap from the previous 3% of total usage purchases.  This will increase the percentage of nonresidential customers in the program.

MG: Describe the demographics of your average residential customer that signs up for renewable energy?  How do they differ from the average utility customer in Palo Alto?  Across the US?

TA: As a general rule, the residential PAG customer is well educated, in a high income household and is environmentally progressive.  Most are thinking about their environmental impact and want to do something about it.

One of the primary differences from other green pricing program around the country is that PAG customers generally use less energy per month than our average customer.  PAG customers use 400-600 kilowatt hours (kWh) per month compared to the national average of about 888 kWh (according to the DOE).  This indicates that our customers may also be trying to reduce their electricity usage through energy efficiency or other measures.

MG: What motivates residents of Palo Alto to switch to renewable energy (e.g., attitude toward the environment, concern for their kids, financial incentives, community empowerment, etc.)?  Are their attitudes substantially different than the rest of Americas?  If so, in what ways?

TA: There are many motivations leading to program participation. These include being role models for the next generation, “doing the right thing” for the environment, and buying renewables as a logical next step after energy efficiency.

MG: What, if any, is the premium charged for purchasing renewable energy (vs. non-renewable) today?  What factors do you attribute to a customer’s willingness to pay such a premium (e.g., level of affluence, attitude regarding the environment, etc)?  Do you think renewable energy will be adopted by a majority of customers without eliminating the premium altogether?

TA: Residential and small commercial customers can enroll in PAG for 100% of their monthly electric usage at a premium of 1.5 cents/kWh. Large commercial and industrial customers can buy renewable energy in blocks of 1,000 kWh for $15 per block. This allows them to support renewable energy at a level that makes business sense.

One of the nice things about PAG is that the price doesn’t fluctuate. CPAU hasn’t changed the price for 100% renewable energy in five years and has no plans to do so. The demographics of Palo Alto are also great for marketing renewable energy, as our customers tend to be interested in the environment and can have a level of disposable income that allows a lower barrier to participation.  

MG: A 20% adoption rate for renewable energy is impressive.  Can this success be replicated across the country?  If so, what will it take to do so?  If not, what are the obstacles (e.g., low awareness, lack of urgency, difficult process to switch, price premium, etc.)?   

TA: With the continuous support of our local elected officials on the City Council, the staff of the City government, the employees of the Utilities Department, and, of course, our great customers, nearly everyone is behind this program. This type of support is vital to the success of a green pricing program in Palo Alto and elsewhere in the country.

Other factors that need to be in-place, or created, include customer awareness of the environment, a history of energy efficiency, an active partnership with the schools and students, and a willingness to lead.

It should be noted that not all the program participants have vast disposable incomes. Participants are both young and old, in the prime of their earning years or on fixed incomes, have children or are childless. All share, however, the same vision of, and desire for, a sustainable future.

MG: What are your primary marketing objectives in the residential and commercial markets?  Do you find the need to spend significant time building awareness of either the category or the technology?

TA: CPAU has found that targeted messaging, repetition, clear information about the product and a call to action (“closing the sale”) bring results. If the job is done correctly, then customers are aware.

For those customers that have more questions, we have many ways for them to find answers to any question that they might have.

MG: Is there any skepticism on the part of consumers regarding the (reduced) impact that renewable energy has on the environment? 

TA: There are always skeptics, but we focus on educating consumers on the positive aspects of the renewable energy we provide.  With the melting of the North Pole ice and the retreating of the Swiss glaciers, featured on the Evening News, skepticism has been reduced or eliminated.

MG: Please describe how you partner with 3Degrees in terms of your marketing efforts.  What are the core components of these marketing efforts?  What made them so successful?

TA: 3Degrees specializes in marketing renewable energy. They have partnerships with utilities in California and around the country. They are able draw on their experience and accumulated data to provide targeted marketing and program management support.

CPAU brings its knowledge, reputation and trust of the community to this partnership to help sharpen the marketing even more. With their experience and our community awareness, we have created one of the most effective, and successfully marketed, green power programs in the country.

An Interview with Amy Hebard, Chief Research Officer and Founder, earthsense

Marketing green can be a challenge for even the most seasoned professional.  There are many reasons for this of course: consumer beliefs are still evolving; demand is not well established; and even where it is, purchase behavior tends to be inconsistent (e.g., the same consumer buys the hybrid and the SUV).

For green marketers to be successful, they must effectively and efficiently target their audience when and where consumers are most receptive to green messaging.  For marketers, this is no easy task. 

While green content sites or periodicals may seem like a natural fit, advertisers must remember that consumers come in all shades of green.  As such, focused periodicals may only reach “deep greens” which today represent only a fraction of the total population that express some level of interest in green.  Instead, marketers must target their audience in more mainstream channels.

Today, companies like earthsense are emerging to empower marketers to do just that. 

At its core, earthsense is a market research company focused on green consumers.  What differentiates earthsense, however, is the depth and breadth of it dataset regarding consumer attitudes, behaviors and demographics.  This dataset is based on both proprietary research as well as partner data sources.  For marketers, mining this dataset has the potential to uncover rich consumer insights that can help shape messaging, as well as guide marketing and media investments in a more targeted way.

Recently, I had the opportunity to speak with Amy Hebard, Chief Research Officer and Founder of earthsense.  We spoke about earthsense’s unique data set, consumer insights derived from the database and opportunities to leverage the data to more effectively target consumers, particularity via retail channels.  Here is what she had to say:

MG: Earthsense fields one of the largest surveys in the green space.  What makes your data unique?

AH: Targeting and finding the “green” consumer – whether we’re talking about “super greens” willing to pay a premium, mass market “greens” who want to be eco-friendly without an added charge, or “non-greens” who wouldn’t buy “green” products even if they cost less than standard prices – is an enormous challenge for many marketers today.  

When we started earthsense, we knew that we needed to take a fresh look at the resources available to us to solve this problem.  We decided to combine best-in-practice techniques of market research, database marketing and advanced geo-spatial analysis to provide new insights in this space.

First, our Eco-Insights survey is the largest by far in the US: we survey 60,000 US adults each year.  This gives us unprecedented capabilities to slice and dice our data for almost any demographic group of interest (e.g., high income earners, newlyweds, parents, baby boomers, college students, expectant moms, etc). 

Second, and even more important, is our ability to append almost any kind of data, because we have geocoded each record.  While personal information remains anonymous to us, we supplement each record with additional data to complete our profiles.  This includes neighborhood level demographics and “exographic” data (i.e., data about the community in which they live).  This includes air quality in the community, data regarding traffic congestion, and nearness to a Wal-Mart or other major chains, for example.

In short, we believe there are a multitude of factors that shape consumers’ desires and ability to go green.  And we think the answers can be found by fusing data from various sources to find patterns that are not easy to detect using the data available through the other providers.

MG: What types of data categories do you capture? 

AH: In addition to the extensive demographics and exographics just mentioned, the survey covers several key modules:

Product Category Coverage:  The backbone of Eco-Insights is our product category coverage. For each of more than 70 different categories in our most recent wave, we know how consumers define “green”, what categories they’ve bought recently, their primary reason or motivation for doing so and main deterrent when they do not. 

Corporate Ratings:  Another important module is the Earthsense Corporate Ratings.  Between Fall 2007 and Spring 2008, we covered over 700 companies familiar to consumers from many of the largest Fortune 500 companies like Exxon Mobil, HP, and P&G to small but growing companies like Earthbound Farm, Eden Foods, and Stonyfield Farm.  In addition, we include 73 supermarket market chains – nearly every major one in the US – and over 77 restaurants, including 39 Quick Service Restaurants such as Starbucks and Pizza Hut and their competitors.

We know which chains people shop in (primary and secondary).  We also know how they perceive these companies including the extent they believe that the company is following sustainable business practices and the impact of the company’s products on the environment. We ask similar questions around their electrical utility.

Attitudes & Behaviors:  A third key module covers environmental attitudes and behaviors.  We ask:  ‘Are consumers concerned about the quality of our environment five years from now?’;  ‘Do they believe individuals can make a difference?’; and ‘Do they think “greenwashing” is a problem?’.

And for behaviors, in addition to their green purchasing we mentioned earlier, we want to understand how consumers act based on the three R’s [reduce, reduce and recycle].

MG: How frequently do you plan to refresh the data?  When is the next survey set for release?

With the rapid change in the “green” marketplace, we know that much is changing – and fast.  For that reason, we refresh the data twice a year, collecting 30,000 responses each spring and an additional 30,000 each fall.  Our Spring 2008 data collection ended the first week in June, and we’ll be releasing data to our clients in August. 

MG: You’ve indicated that a key concept behind how you designed your Eco-Insights survey is that the results be “actionable.”  What do you have in place to make that happen? 

AH: Several things.  As of right now, companies can use our data and services for:

Brand / Marketing Strategy.  E.g., Build a deep profile of the eco-friendly/health consumer or understand how consumers define green within specific categories.

Product Development.  E.g., Understand attitudes that drive their purchase motivations and barriers by category or identify consumer-based related categories for portfolio expansion of a brand.

Category Management / Sales.  E.g., Prioritize retail customers/prospects based on the category opportunity for products, and alignment of product and retailer customers.  Support retail-level sales pitches and category management efforts with consumer-based attitudinal insights [in addition to transactional data].  Utilize data at a store trading area level to maximize ROI for in-store programs, promotion, distribution and merchandising initiatives

Marketing.  E.g., Maximize ROI of marketing efforts with clear profiles of how to reach the target consumer.  From online and offline media habit profiles, to scoring a geographical area’s propensity based on desired criteria, the data can assist efforts ranging from media planning to database marketing

Consumer Insights. E.g., Allow clients to get more from their consumer insights research budgets as we can use the responses from the Eco-Insights survey as a highly sophisticated screener to re-contact respondents for proprietary custom studies

Corporate Social Responsibility. E.g., Rate eco-friendliness of both the company and its products including ‘Likelihood to Recommend’ and ‘Likelihood to Invest’.

MG: How can CPGs and retailers use the data to target consumers interested in green products?  How granular can you go?  For example, can you target at the zip code level? How about by product or product category? 

At a retail level, these data are extremely actionable.  We capture consumers’ primary and secondary shopping chains which allow us to know what product categories people buy and where they are most likely to shop (and we can do cross-outlet analysis). 

We have also asked if they were a customer of other retail chains (e.g., Home Depot, Lowes, Macy’s, Best Buy).  So although we don’t have as specific information for these other outlets we can do, at minimum, analysis by these outlets.  The link between category and outlet profile is very unique and actionable.

As for granularity, earthsense has partnered with Pitney Bowes MapInfo to project market potential at very low levels of geography including census block groups, tracts, and trade areas, and yes, ZIP Codes.  Using the PSYTE Segmentation system, retailers can purchase mailing lists based on households living in specific neighborhood types with the highest proclivity to go green.  It’s a soup-to -nuts solution.

Earthsense provides category level data, not brand-specific observations.  One of the biggest benefits earthsense subscribers have is the ability to drill down further into the data using our Reconnect Service.  So, say you are a manufacturer of frozen foods.  You can learn quite a lot about consumers who buy this category from our main Eco-Insights survey. 

But if you wanted to learn more about the types of frozen foods consumers buy and which brands they favor, you can create a customized survey whose results are appended back to the syndicated survey.  This will give you the freedom to concentrate on just the details you need.

MG: Do you have attitudinal and psychographic data that can inform messaging by geography?

In addition to partnering with Pitney Bowes MapInfo, we have also formed a relationship with Mediamark Research & Intelligence (MRI).  We’re working this summer to link our databases so that subscribers of both surveys will have unprecedented detail on consumers.  And since MRI is PSYTE-encoded, all of these data are geographically actionable!

MG: How do local influencers (exographics) impact attitudes on green?  Do you think these influencers impact attitudes toward green or conversely, attitudes toward exographic considerations?

Good question!  There’s a lot of data to sift through and a lot to learn.  While we are not looking for or trying to document causal relationships, we are finding patterns where several factors coexist.  A marketer’s job is to maximize return on investment.  And, we help accomplish that goal by pinpointing those areas where the patterns are the strongest.  

Clearly, a person could wish to buy only organic food, ride a bicycle to work, and recycle everything  But, factors such as the proximity to a store or farmer’s market with a good selection, the distance to a workplace, weather conditions and local waste management facilities can prevent or discourage even the most ardent “green” consumer.

With an economy that is sputtering, gas prices that are soaring, and issues surrounding safety in our food supply – consumers are weighing multiple factors before they put their put their money down on even the basics.  Earthsense helps manufacturers and marketers by taking a common sense approach to understanding the motivations and barriers that directly affect the purchase of products – particularly those with environmental, health or wellness features.

While creating and sharing user-generated content is an effective way to facilitate consumer engagement and viral marketing, it is not the only approach that marketers can take.  Professionally produced original content is another proven way.  Increasingly, agencies or production studios create and seed content on behalf of their clients for consumers to view and share online.

One such shop is Free Range Studios which has produced several original videos that have generated significant buzz and viral impact in the green space.  Calling its approach “socially conscious viral entertainment”, Free Range tries to “distill a complicated message into a fun or moving short story” while engaging its viewers by allowing them “to write the end of that story by taking action or donating.”  Stories are distributed not only through paid advertisement but via video sharing sites such as You Tube and, more specifically, RiverWired, emPivot and LivePaths in the green space.  They are also distributed offline at concerts and events.

Recent Free Range videos with eco-themes including Grocery Store Wars, a Star Wars spoof about a “small band of organic vegetable puppets” including Cuke Skywalker, Ham Solo, Chewbroccoli and Obi Wan Cannoli that do battle against Darth Tader and the Dark Side of the Farm.  

Most recently, Free Range released The Story of Stuff, a 20-minute video that explains the environmental impact regarding the “stuff” we consume.  The video has been a huge hit, recording more than 3 million viewers on The Story of Stuff microsite alone. Moreover, the video has received acclaim by winning the SXSW Interactive Award for its contribution as an educational resource.

Marketers should recognize that there are certain trade-offs made in producing their own original content themselves versus encouraging users to generate it for them.  For example, with original content, upfront costs are likely to be significant higher.  Yet, for getting a complex message across to consumers, original content may be a marketer’s best option to hit a home run.

Tapping social media to engage consumers as well as facilitate viral marketing has the potential to generate significant results for marketers.  Not only can this drive greater brand impact but it can significantly increase reach to a receptive audience at little, if any, incremental cost. 

Today, more and more marketers are trying to launch campaigns that have the twin goals of increasing consumer engagement and viral marketing impact.  For many marketers, it often appears that achieving these goals is more a matter of art.  Yet, platforms such as Brickfish are emerging that are rapidly turning such an approach into a science. 

Brickfish is an online marketing platform that rewards participants for engaging with brands.  The idea is quite simple: participants come to the Brickfish site and choose which campaign they would like to participate in.  They have an opportunity not only to create content but to review and vote on existing content as well as to share with others through email and IM and across multitudes of social media sites.  Behaviors are rewarded directly or through a chance to win prizes for “most popular” or “most viral” entries. 

Several eco-friendly brands have launched campaigns using the Brickfish platform including Origins, North Face and Honest Foods. 

What is interesting is the transparency by which Brickfish reports campaign results.  While most agencies are beholden to their clients for their results that they generate, it is rare that such results are shared openly outside of corporate marketing circles.   In the case of Brickfish, visitors can track total activities conducted on the site including user-generated content entries, reviews, votes and views.  Moreover, visitors can rank content by user preference as well as viral reach. 

Impressively, Brickfish provides users with a visualization of each viral campaign enabling marketers to understand how content is shared between users from one application to another.

Green marketers should consider such a platform.  Not only is this a efficient way to engage consumers (clients pay on a cost-per-engagement basis), but the results provided by Brickfish are impressive, as the company claims that their “viral marketing approach…has proven to be 5 to 10 times more effective than traditional online marketing methods such as display ads or search optimization.”

Moreover, campaigns for green products should naturally align with this type of marketing as it empowers users to engage with and share brands that also represent a cause.   As such, consumers’ association with a product is actually an expression of themselves in terms of what they believe and how they live their lives (or at least how they like to be perceived).  As a result, green products are ripe for viral marketing campaigns.

Marketers seeking an edge should seek out new ways to reach and engage consumers.  Brickfish provides a compelling approach for green marketers and the results to back it up.

Recently, the Canadian Standards Association updated its guide for making environmental claims.  While not legally binding, such standards provide guidelines for industry and advertisers when it comes to making environmental claims.  The intent is to protect consumers from false advertising claims regarding the environment.

In many ways, this document foreshadows likely changes from a similar review of US guidelines underway by the Federal Trade Commission (FTC).  Arguably, the current FTC guidelines are long overdue for a refresh given the dramatic evolution in the green space that has occurred since they were last reviewed a decade ago.  As such, it is widely expected that the FTC will expand its jurisdiction to include terms that have only recently been added to the vernacular including “renewable energy”, “sustainable” and “carbon offset”.   While such clarity will be welcome in marketing circles, it may fall short given the complexity of today’s environmental issues.

First established in 1992 by the FTC, the Guides for the use of Environmental Marketing Claims provide an “administrative interpretation” of what constitutes a fair environmental claim: transparent and accurate disclosures that clearly delineate benefits between a product and its packaging as well as across different products.

It is hard to overstate the importance of such guidelines.  For consumers, guidelines ensure that they have the necessary information to make informed purchase decisions.  For advertisers, guidelines enable companies to feel confident that the environmental claims they are making will not open them up to scrutiny, or worst, accusations of greenwashing. 

In clarifying these guidelines, however, the FTC faces three major challenges today:

First, regardless of what guidelines the FTC puts into place, it is increasingly difficult for consumers to substantiate corporate environmental claims.  This is especially true for carbon offsets or renewable energy certificates (RECs) that consumers (as well as corporations) rely on to reduce their carbon footprint.  Indeed, for such financial instruments to have substantive impact, they must abide by the “additionality” principle: they must lead to environmental improvements that would not have occurred but for the consumer’s investment in an offset or REC.  Assessing true adherence to this principle is out of reach for consumers as it requires sophisticated financial understanding and time.

Second, it is difficult for consumers to discern from current guidelines what the likely secondary environmental impacts are from a particular product.  Take biofuels, for example.  Crops themselves can be grown sustainably and disclosures can be made accordingly.  Yet, arguably, diverting cropland for fuel production reduces the amount of food produced, contributing to (though not necessarily the primary cause of) rising prices for food staples globally.  Moreover, land used to raise biocrops may create added pressure to deforest lands elsewhere in order to grow food crops or raise cattle for human consumption.  In either instance, it is difficult to claim that the fuel was grown in a truly sustainable manner.

Third, as the FTC’s guide is only an administrative ruling, the FTC does not have the legal authority to enforce them.  Instead, the FTC can take only “corrective action” against those who violate them which limits their punch in market.  Jay Kilby explores this issue more in-depth on his blog, WeBuyItGreen.

Nonetheless, Marketing Green welcomes upcoming revisions of the FTC guidelines for making environmental claims.  Despite their limitations, FTC guidelines provide an essential guide for green marketers as well as empower consumers with information to make informed purchase decisions.  While gaps remain, consumer advocacy groups will likely step in to police environmental claims.  Given the strong interest in green, it is likely that advocacy groups will hold advertisers accountable for their claims in court or in the court of public opinion.

A recent survey by The Economist Intelligence Unit identified both the top influencers of – and benefits derived from – corporate environmental risk management (CERM) programs.  Two things are curious about these survey results.  First, customers and investors rank relatively low in influence (fourth and seventh, respectively) despite the fact that “better corporate reputation” among these groups ranks as the primary benefit for launching CERM in the first place. 

Second, “regulators” and “government” exert significant influence – second only to “executive management” – on companies to initiate CERM programs; in terms of benefits, however, “improved relations with regulators” ranks only eighth.

Risk Manager Responses from Recent Survey by                    The Economist Intelligence Unit

The high level influence of regulators and government suggests that corporations consider regulatory compliance as the primary measure of CERM success.  This focus is understandable given the stiff fines imposed for non-compliance.

Moreover, it also suggests that corporations believe that regulatory compliance is the way to improve its reputation with customers and investors.  Yet, while compliance is arguably important with customers and investors, it is simply the place to start.

When it comes to customer and investor groups, focusing solely on regulatory compliance is like driving a car by looking through the rear-view mirror.  Quite simply, regulations do not necessarily reflect current consumer and investor expectations regarding corporate actions toward the environment; instead, they reflect those held in the past when the regulations were passed.

This is an important distinction because consumer and investor expectations regarding corporate environmental responsibility continuously evolve.  As such, it is likely that current expectations have far surpassed current regulations in place today.  Take climate change, for example.  There is a growing consensus that carbon must be regulated, yet no binding limits yet exist in the US.  

There are other cases where customers or investors actively challenge management’s environmental policies.  For example, led by members of the Rockefeller family, ExxonMobil shareholders have made it clear that they believe that when it comes to climate change, compliance with existing regulations is not enough for this oil giant.

As such, corporations that primarily focus on regulatory compliance are likely falling short when it comes to improving their reputation with consumers and investors.  Instead, management should try to better understand current customer and investor expectations toward the environment, and how these sentiments evolve with time.  This will require corporations to take action that go beyond current regulatory mandates.  It will also require recognition that customers and investors hold greater “influence” on CERM decisions than what is commonly realized today.

Eco-labels influence consumer behavior in two ways.  First, they introduce green as a considered attribute at the point of sale.  Second, they enable consumers to comparison shop based on green.  Over the past few years, there have been many new eco-labels launched by governments, manufacturers and retailers.  Many of these labels are listed on Consumer Reports’ Greener Choices site.

Interestingly, the Natural Marketing Institute’s 2007 LOHAS Consumer Trends Database report determined that not all eco-labels have the same impact.  In fact, consumers indicate that they are more likely to make eco-friendly purchase decisions if the eco-labels are also widely recognized and trusted brands in of themselves.  Familiar labels for programs like the EPA’s Energy Star have a more significant influence on consumer behavior than others. 

While such a finding reinforces the value of eco-labels, it does challenge the notion that CPG companies and retailers should necessarily launch proprietary labels to differentiate themselves on green.

Like all brands, eco-labels take significant time and resources to build.  Moreover, given the sensitivities regarding greenwashing, for-profit entities may have to overcome a higher hurdle than government or a non-profit organization given the appearance of conflict if proprietary labels adorn their own products.

As such, Marketing Green recommends that product companies and retailers focus on disclosing product information about environmental impact to differentiate themselves in the market rather than trying to define new green labels.  Disclosures provide consumers with information that can inform purchase decisions rather than certify a product’s greenness.  This is what HP has done with its launch of Eco Highlights labels on its products.   

Marketing Green also recommends that retailers simultaneously push for industry-wide labels.  While some retailers may consider proprietary labels as a competitive differentiator, it is likely that broadly recognized labels will accelerate consumer adoption while reduce the cost to support them. 

Moreover, retailers should differentiate themselves by sourcing more green products.  Arguably, this is one of Wal-Mart’s strategic priorities today.  Greater variety combined with recognized eco-labels will likely drive more sales as well as consumer loyalty.  In the end, this approach is likely to have more impact for both business and the environment.

These days, green marketers are challenged to efficiently reach consumers and effectively impact their attitudes and behaviors.  There are many reasons for this of course: consumer attitudes are still evolving, familiarity with green products is just emerging and purchase behavior is inconsistent within and across categories.  As such, marketers tend to look for targetable demographic groups or behaviors that have a higher propensity for green. 

In this political year, it is interesting to examine whether political ideology, and more specifically, party identification as a Democrat or Republican is an indicator of interest in green. 

Today, there is a common perception that Democrats are more pro-environment than Republicans.  Indeed, on issues like global warming, it is not hard to see why.  According to a recent Porter Novelli/George Mason University consumer survey, Democrats consider global warming a “serious problem” nearly 2:1 over Republicans.  Additionally, only half as many Republicans as Democrats feel that by taking action they can impact global warming.

           Beliefs Regarding Global Warming by Political Affiliation

Yet, this perception may not necessarily reflect behavior.  In fact, when it comes to taking action, Republicans act more similar to Democrats than their views on the environment may suggest.  In fact, Democrats perform, on average, only one more green action  (from a list of 14 that includes using less energy, recycling, buying energy-efficient appliances, and buying organic food) than Republicans. 

For marketers, this observation may provide an opportunity.  Republicans may be as receptive to green as Democrats if marketers can reframe the underlying environmental issue and the messaging that is communicated to them.  Attitudinal research based on political party affiliation may provide clues to how this may be done.  Here are a few examples that marketers may want to consider:

Reinforce local benefits:  At the recent conference, Professors David Konisky, Jeff Milyo and Lilliard Richardson at the University of Missouri presented research that examines how attitudes toward government involvement change based on the type (ie, pollution, resource preservation, global warming) and geographic scale (ie, local, national, global) of the environmental issue.

Based on their research, Konisky et. al., determined that “party identification and political ideology are the strongest predictors of environmental attitudes”.  More specifically, “Republicans are much less likely to support further government efforts to address environmental issues.” 

Interestingly, Republicans were much more apt to favor governmental intervention if the issue affected people locally, or even nationally, rather than globally.  In speaking with Professor Konisky last week, he expressed his belief that “people tend to want the government to address proximate problems.”  One way to increase interest is by “reframing the climate change issue as one of local impacts [to] generate more concern for this issue relative to other issues.” 

While Konisky et. al., focused on attitudes toward governmental action, marketers should test the hypothesis that sentiment will carry over to campaigns that build awareness regarding climate change as well as influence purchase behavior.

Position as a leader:  A recent national survey conducted on behalf of the Civil Society Institute and its Results for America project (CSI/RFA) indicates that Republicans are more apt to favor action on global warming if the US is positioned “to lead – not follow – other nations” on both climate policy and clean tech.  In fact, while only 45% of Republicans (vs. 86% of Democrats) agree that we need “national leadership on global warming,” two-thirds of Republicans want American to take the lead on policy and technology development.

As such, marketers have an opportunity to test a leadership message when communicating with consumers regarding green.  Such a message may resonate well with consumers, and especially in categories in which a company is in a leadership position today (eg, General Electric, Toyota) or in which no clear established leader exists globally (eg, renewable energy, electric cars).  One recent example is Tesla, the California-based automotive up-start that established itself arguably as the leading electric car company with its weekend launch of a car that can go 225 miles without recharging and 0 to 60 in 4 seconds.

Focus on measurable impact:  Across the political spectrum, the “number of ‘green’ actions” is not strongly correlated with political party affiliation, but rather level of concern about climate change.  According to the CRI/RIA survey, those that believe that both global warming is dangerous and that action to mitigate it is efficacious perform more than 40% more green actions than those who do not – regardless of political persuasion. 

Marketers should consider a duel message to clarify not only the impact of global warming as well as the effectiveness of measures to mitigate it.

One example, laundry detergent, was mentioned by Joel Makower in his presentation at the Green and Good conference late last year.  Many brands focus on the environmental impact of the formula itself, advertising that a consumer can reduce his/her footprint by using a formula with a less burdensome manufacturing process and chemical makeup. 

Yet, as Makower pointed out, most of the impact from washing clothing is not from the manufacturing or distribution of the detergent but the heating of the water (according to GreenYour, this ranges from 85-90% of the total energy required for the washing).  As such, Tide and other brands that offer a cold water formula have an opportunity to message not only how well their products clean clothes but that they greatly reduce the carbon footprint from washing simply by not heating the water.

¹ Konisky, David, Jeff Milyo, and Lilliard Richardson, “Environmental Policy Attitudes, Political Trust, and Geographic Scale,” abstract presented at the Western Political Science Association annual meeting, March 20-22, 2008.