Will BP Clean Up Its Act After the Big Spill?
Monday, May 24, 2010
In 2007, I lauded BP's rebranding for its aesthetics and the company's willingness to position itself at the forefront of social and cultural debate. But I questioned its ability and willingness to "walk the walk" of its "beyond petroleum" talk. Sadly, the Gulf of Mexico spill will prove an excellent case study on the perils of disingenuous branding.
Harvard Business Review recently blogged that BP is a "victim of its own good marketing." While I agree with the author's points and analysis, I take issue with the semantics of the headline. "Good marketing" can never be built on a "disingenuous ad campaign," no matter how effective such tactics might be in the short term.
According to Foreign Policy, BP launched the "beyond petroleum" rebranding with a $200 million PR and advertising budget, and spent $76 million on broadcast spots last year in the U.S. alone. The strategy worked, and BP outperformed its competitors in terms of its environmentally friendly reputation.
Now BP faces an ecological and reputational disaster that Barclay's Capital estimates will cost the company $9 billion in lost brand value - 36 percent of the projected $23 billion total cost of the spill for BP. After years of greenwashing, the discrepancy between the realities of BP's business practices and its marketing claims are at the forefront of public attention. And the tremendous investment in its green image without the substance to back it up are proving ill conceived.
In today's increasingly connected and transparent world, corporate spin and disingenuous or misleading claims will ultimately damage a brand. Even the marketer at the center of BP's rebranding initiative later questioned its soundness. Landor Associates and Ogilvy & Mather created and beautifully executed a compelling and culturally relevant brand image. And if their client could have lived up to its brand promise through operations, BP's rebranding would have been one for the marketing textbooks.
But brand begins and ends with operational delivery. Actions speak louder than words or logos. And merely putting lipstick on a pig is not a sustainable solution for winning the hearts and minds of an evermore savvy consumer.
In the wake of the disaster, BP has touted creatively named solutions, including the "top hat," "junk shot," "dynamic kill," and, most recently, "kill mud" or "top kill." As one commentator puts it, "This word salad's driving me nuts, and it only convinces me further that these folks don't know what to do!" BP's "beyond petroleum" implies innovation, preparedness and foresight. Yet it ignored warning signs prior to the rig blast, and its seemingly makeshift solutions appear to confirm that the company was ill-prepared for the spill.
BP's public response has been equally appalling. "What the hell did we do to deserve this?" was CEO Tony Hayward's early response. BP played the blame game with Transocean and Halliburton. And the company allegedly "ordered" the Coast Guard to threaten CBS News reporters with arrest for filming the spill's environmental impact.
It's true that BP would be facing a monumental challenge in rebuilding its image and reputation following the Deepwater Horizon catastrophe regardless of its prior marketing claims or mishandling of the crisis. But its prolific greenwashing will only exacerbate the problem as the brand struggles to recover in the years to come. It will be exponentially more difficult to rebuild trust among consumers, investors, regulators and other stakeholders after pulling the wool over their eyes for the past decade.
The brand's next moves will be interesting to observe. And given the current situation, it leaves one to wonder: Did they hang on to all of those old Amoco signs?