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Marketers go green, but fewer consumers willing to pay

By: Jack Neff

September 27, 2012

NEW YORK (Sept. 27, 11:05 a.m. ET) — As businesses ramp up marketing efforts to save the planet and regulators ready new guidelines to police them, it’s becoming increasingly apparent that consumers aren’t paying as much attention — at least if it’s going to cost them more.

A Green Gauge survey by GfK scheduled to be released today finds that while 93 percent of consumers say they have personally changed their behavior to conserve energy in their household, they’re becoming less willing to pay more for green products.

The survey of 2,000 U.S. consumers, fielded last summer, finds five- to 12-point drops in the percentage of consumers willing to pay more for eco-friendly cars, biodegradable plastic packaging, energy-efficient light bulbs, electricity from renewable resources or clothing made of organic or recycled materials.

Much of the fault for the consumer pushback lies with marketers for over-hyping green products and making overly aggressive claims. “You have this kind of heightened distrust,” said Diane Crispell, consulting director at GfK. “Consumers have become hypercritical. You see it with green and health claims.”

Shortly, inflating claims will become tougher, however. The Federal Trade Commission is about to issue its final Green Guide, to be released at the Oct. 1 National Advertising Division meeting in New York. Questionable environmental claims prompted the development of the guide, which will result in increased regulatory scrutiny of marketers’ environmental benefit claims.

Big business

Any way you cut it, green is big business. Sales of environmentally friendly products in the U.S. exceeded $40 billion last year, according to data from various market tracking services and Advertising Age estimates. This includes $29.2 billion for organic food, more than $10 billion for hybrid, electric and clean-diesel vehicles, more than $2 billion on energy-efficient light bulbs and $640 million on green cleaning products.

Crispell sees a bifurcation of the market, with the most committed and educated “Green Indeed” consumers still being willing and able to spend more on products, while those in the mainstream grow more skeptical. “The awareness is there about environmental issues, and people are motivated,” she said. But the novelty has worn off for green products, “so people are evaluating them more and being more critical.”

A complete version of this story is available at www.adage.com.