Every so often, an oil company experiences an environmental catastrophe of disastrous proportions. As evidenced by the recent Gulf oil spill, the Exxon Valdez oil spill and countless other eco-disasters, these occurrences are a tragic occupational hazard of the energy industry. In theory, they should not be a surprise — anymore than an earthquake in California would be a shocker. Of course, a big enough tremor in Los Angeles will generate nationwide news coverage. The question from a brand marketing standpoint is simple: is there anything oil companies can do, given the probability of an oil spill?
In order to answer this question, it is helpful to back up and look at the consumers’ view of the industry. When it comes to the consumer, oil companies have a unique advantage over, say, a perfume company. This is that the oil companies offer a necessity. Everyone needs oil; perfume is a luxury.
From a branding and marketing standpoint, this advantage actually has negative connotations. The oil companies are really big and really profitable — even when the economy is in the proverbial toilet. In the deep recession year of 2009, when almost everyone was suffering financially, the oil companies made billions of dollars in profits. A 2006 FTC study of gas price manipulation found that the record increases in gasoline prices were “not substantially attributable to higher costs.” It seems the oil companies always take advantage of their financial opportunities with no regard to consumer goodwill. These companies are often viewed as monopolistic, money-grubbing, price-gouging, predatory goliaths. In a 2008 Harris poll of 20 major industries, only the tobacco industry had a lower rating than the oil companies on the topic of how good or bad a job they perform in serving the needs of consumers.
You could say, from a branding perspective, energy companies are already starting off on the wrong foot. After all, what is there to love about an oil company? Do you trust them? Do you have any affinity to any oil company? Do they do anything for you as a person? Do they make you feel good in any way? This makes it all the more difficult for an oil company to perform branding and marketing tactics that prepare for the worst. The energy industry has to rank among the worst PR and branding industries. We know all about the 1989 Exxon Valdez nightmare which was widely considered the worst corporate PR fiasco of all time. But what has the industry done to counter its image since then?
One could argue they actually have made some positive strides. Let’s take the current Gulf oil spill. BP has a real disaster on its hands, and they have clearly learned a lesson from Exxon’s PR disaster. The CEO of Exxon was nowhere to be found until six days after the Valdez disaster. When he finally did appear, it was only to hold a press conference to deny responsibility to disclose the plan to clean up the mess. He also blamed the media for turning the spill into a big deal. His refusal of media interviews and complete lack of remorse highlighted one of the worst PR gaffes in history. It conveyed an “ivory tower-esque” tone of arrogance. To his credit, the CEO of BP, Tony Hayward, has learned from Exxon’s PR mistakes and has been on air and is taking full financial responsibility for the spill cleanup.
As far as brand marketing strategy is concerned, it is fair to say that oil companies have increased their efforts to convey a more positive image to the consumer. Shell has been focusing on advanced technologies and product performance enhancements along with sponsorships like Eco-Marathons, Exxon Mobil has been supporting science education, and BP and others have been focusing on their “green” strategy. Unfortunately for BP, that positioning is tough to sustain given the Gulf oil spill.
Even with the increased efforts, let’s not pretend the problem has gone away (as if that is an easy thing to do at this point in time). The marketing and branding work of oil companies is far from done. Oil and energy companies must develop a sincere, long-term strategy to create brands that connect with their consumers on an intellectual and emotional level. In short, they need to define a plan to evoke positive feelings from their consumers.
One good way to enhance their brands would be to become good corporate citizens. Oil companies make massive profits, so how about giving back? An exhaustive study by the Committee Encouraging Corporate Philanthropy shows that the energy industry’s Total Median Giving as a Percent of Revenue (0.05%) is the lowest of any other major industry! [For reference, health care companies give 0.6%, or 12 times as much as the energy companies.] Once again, the oil companies don’t understand the concept of branding.
If anything, the Gulf oil spill should present BP competitors with an opportunity to reinforce their brand marketing strategy to capitalize on public desire for safer drilling and processing measures. Competitors should be highlighting the steps they are currently taking to prevent the next major ecological disaster.