Davis ThinkingIn 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.
When BP rebranded itself a few years back, it did so in a way that made the redefinition of its initials an overt gesture: "British Petroleum" would now stand for "Beyond Petroleum." In other words, we were asked and empowered to reimagine what "BP" means.
De-commoditizing categories has proven hugely valuable for more than a half-century in building specialty and niche markets. But the resetting of the economy and the emptying out of the Starbucks cup suggests a macro shift back to the big brands that have the price flexibility to deliver real consumer value for the long-haul. Branded commodities are poised for a return to growth, even as the ultimate commodity still floats about in the air.
Thinly veiled PR ploys, corporate-image ads and traditional notions of CSR-as-afterthought are outmoded. As one brand consultant puts it, “corporate sheen is dead.” Unfortunately, most marketers are still hanging out at the wake, too drunk and reminiscing about the good ole days to realize their consumers (and other stakeholders) are light years ahead of them.
As tourists start returning to the Gulf of Mexico two years after the disaster that marred its name, BP would like to rebuild its image as an oil company that actually gives a hoot about the environment.
What makes one brand survive a reputation crisis better than others? While it would take a PR and branding genius to help, for instance, BP restore its tarnished image, how about less extreme examples? Consider the recent New York Times expose on General Electric that revealed how the corporate behemoth paid no taxes in 2010. GE made $14 billion in profits in 2010, $5 billion of that in the US — but its US tax bill is negative $3.5 billion. And yet, GE's reputation has not suffered as much as BP, Toyota or Goldman Sachs, at least so far, according to YouGov BrandIndex, the consumer perception brand research service.
In the wake of releasing new research assessing the damage of the BP oil spill to the Gulf of Mexico's seafood industry, Louisiana Lt. Gov. Jay Dardenne and Harlon Pearce, chairman of the Louisiana Seafood Promotion & Marketing Board, unveiled strategic initiatives to rebrand Louisiana tourism and the seafood industry.
Hundreds of naming rights are up for sale nationwide at schools, parks, government buildings and boat launches, as money problems among cities and states create monuments such as Chicago's BP Bridge and AT&T Plaza.
Corporate reputation is very fragile. What takes years to build can be ruined overnight. Just ask BP, Toyota or Goldman Sachs. This year some of the nation's biggest companies and corporate brands faced disasters, privacy breaches and product recalls that underscore the fragility of corporate reputation and consumer trust in big companies.
Interbrand has released its 2010 ranking of the world's best global brands. The 11th annual assessment of the world's most successful brands for the first time doesn't include BP, which lost billions of dollars of value, and brand equity, due to the Gulf Oil spill.
Before BP could stem the oil gusher at the bottom of the Gulf of Mexico, it unleashed $100 million in ad spending, largely on network TV, to stem the damage to its image. But it also started spending heavily where it had never spent much before: buying ads in Google's search results. How much did BP spend on search? In two months, BP went from spending very little on search advertising -- about $57,000 a month -- to becoming one of Google's top advertisers, dropping nearly $3.6 million in the month of June alone, according to an internal Google document obtained by Advertising Age. That pushed BP into the upper echelon of search advertisers, in a league with Expedia, which spent at least $5.9 million in June, Amazon, which spent at least $5.8 million, and eBay, which spent at least $4.2 million.
With reports that the oil gusher in the Gulf is nearly kaput, BP's new CEO announced Friday that the company would scale back its cleanup efforts in areas where there is no more oil. Makes sense. Still bad for the brand, though. There are two problems with which BP must contend, one situational and the other conceptual.
Could it be that BP may have a naming and branding issue? Of course it does, and their reaction might be to change their name to Amoco. But gas station owners seem to be divided. Some owners feel that the BP brand has cleaned up its image by hiring an American to run the company. And, as the Associated Press reports, others "Believe a successful turnaround with the existing brand will have a bigger payoff."
Tony Hayward, the departing chief executive of BP PLC, is unrepentant about how the energy giant responded to the U.S.'s largest offshore oil spill. In his first interview after agreeing to step down from the top spot this week, Mr. Hayward said he did everything possible once the Deepwater Horizon rig exploded and sank in the Gulf of Mexico, by taking responsibility for the spill, and spending billions of dollars to stop the spewing oil and clean up the shoreline.
In psychology, the term "identified patient" refers to a family member — often a child or a teenager — who gets scapegoated for behavior that is actually just a predictable response to dealing with an unhealthy family. Tony Hayward is BP's identified patient.
A brand crisis can take many forms, which can linger differing lengths of time depending on the survivability of the brand. Every corporate brand crisis is unique; each has a starting point when the CEO becomes responsible for the survival of the company. BP's bumbling management of its Gulf crisis, its seemingly endless decision making process, not to mention post-crisis effects that will last decades, make this crisis unprecedented.
BP’s board is expected on Monday to name an American, Robert Dudley, as its chief executive, replacing Tony Hayward, whose repeated stumbles during the company’s three-month oil spill in the Gulf of Mexico alienated federal and state officials as well as residents of the Gulf Coast. The planned appointment of an American to run the London-based company, which was confirmed by a person close to BP’s board, would underscore how vital the United States has become to BP.
We've reported on Pepsi's consumer-focused activities, in particular the Pepsi Refresh Project, as part of its effort to use social media to engage and empower consumers. Now Pepsi is gaining recognition for outstanding corporate social responsibility (CSR) by using its Refresh Project—which has funded a variety of philanthropic projects, including care packages (see above) for U.S. troops—to help areas affected by the Gulf oil spill. Pepsi's "Do Good for the Gulf" Refresh campaign has pledged $1.3 million to ideas submitted by consumers that could "refresh the communities of the Gulf states." Pepsi invited the public to submit ideas through July 16. Starting August 2, consumers can vote on the ideas they like best. Finalists will be announced on September 2, and grants will be awarded on September 22. Some efforts to associate a brand with a major disaster could be seen as cynical, but this initiative is being hailed by industry experts.
A brand crisis can take many forms, which can linger differing lengths of time, depending on the survivability of the brand. Every corporate brand crisis is unique; each has a starting point when the CEO becomes responsible for the survival of the company. BP's bumbling management of its Gulf crisis, its seemingly endless decision-making process, not to mention post-crisis effects that will last decades, make this crisis unprecedented. Tyco, Texaco, Dynegy, IBM, Enron, Worldcom and Citigroup are a few of the crises we've studied. Some companies survived not only intact but emerged stronger than ever. Others were destroyed, or forced to merge. A handful limped on, weakened but not ruined.
Most companies are barely prepared to deal with unhappy customers who use social media to air their gripes. Now they must be ready to respond when organized entities, such as Greenpeace, wage massive campaigns against their brands using social media channels.
This week BP successfully recapped its ruptured oil well in the Gulf of Mexico. Test results are favorable and show that oil and gas are, for the time being, confined. This news inspires cautious optimism in the hearts of residents and spectators alike. Online, however, the social effect continues to flow across social networks and social graphs, echoing anger, hope, and the demand for resolution and prevention from BP and the Obama administration.
Even as the world watches to see if BP's new cap can continue to contain the oil spill, market researchers are struggling to get a handle on how deeply "gulf despair" is working its way into the consumer psyche. New data from Kantar Retail show that a majority of Americans -- 56% -- feel they have been affected by the spill, many of them in multiple ways.
Two venerable brands have recently sidelined their names in favor of initials. National Public Radio now wants to be known as "NPR" while the Young Men's Christian Association — the YMCA — has abbreviated its abbreviation to, simply, "The Y." But aren't "NPR" and "The Y" already de facto brand names?
The BP oil spill is hitting close to home for dozens of metro Detroit BP station owners, with many trying to switch brands as angry consumers boycott their businesses. Abdel Berry, owner of three BP stations, has already converted his Ypsilanti and Detroit stores to the Sunoco brand. "It's either change or go out of business," said the retail gasoline veteran.
During Dan Aho’s vacation to the Florida Gulf Coast, he slurped seawater, spirited off shells from an old lady and destroyed a sand castle in progress, often snug in the most horrifying of tourist tog — the dreaded red Speedo. He would seem to be giving visitors to the Sunshine State a bad name, except that his goal is actually to bring more of them here. He is the star, after all, of the most ambitious and humorous effort yet to keep Florida’s tourism empire alive despite the oil spill in the northern Gulf of Mexico.
“The leak in your home town” is an iPhone app that lets users see the BP Deepwater Horizon oil spill whenever they see a BP logo. A user simply launches the app and aims their iPhone’s camera at the nearest BP logo. What the user sees is one of the broken BP pipes coming out of the BP logo, and out of the pipe comes the oil, pluming upward. “This work mixes computer generated 3D graphics with the iPhone’s video camera to create an augmented reality. The user is able to see the computer generated 3D objects at specific locations in the real world. The 3D graphics create the broken BP pipe which comes out of the BP logo. “An important component of the project is that it uses BP’s corporate logo as a marker, to orient the computer-generated 3D graphics. Basically turning their own logo against them. This repurposing of corporate icons will offer future artists and activists a powerful means of expression which will be easily accessible to the masses and at the same time will be safe and nondestructive.”
All of which raises a good question: Will the Gulf of Mexico disaster inspire innovation beyond creative protests and logo spoofs? Virgin founder Richard Branson, promoting Virgin America's new flights to Toronto, says he hopes the spill inspires at least one positive outcome: more focus on cleantech and green energy solutions.
Brands are owned in the minds of target audiences and observers have been quick to redefine BP as “broken promise.” This broken promise is likely to manifest itself in lower stock prices, lower company valuation, boycotted gas stations and decreased market share and profitability over time.
You've seen him in those commercials for BP. An unassuming man wearing an orange polo and wire-frame glasses approaches the camera as he walks along a generic dock and says, "I'm Darryl Willis. I oversee BP's claims process on the Gulf Coast. BP has got to make things right, and that's why we're here." Mr. Willis has been setting up and overseeing BP's claims offices in the affected Gulf Coast states -- a juxtaposition that some commentors on black-focused blogs said has undertones of racial perfidy. Nonetheless, Mr. Willis, a married father of two children, has become the most visible face of BP. Ad Age spoke to Mr. Willis via phone as he was en route from Florida to New Orleans.
Shell Oil hopes to distance itself from BP with "aggressive" campaign, dubbed Let's Go, that includes energygalaxy.com and shell.us/letsgo, plus print and TV ads. BP, meanwhile, is pursuing "risky" drilling in Alaska; based spill contingency plans on faulty U.S. data, reports the Wall Street Journal; reinstalled the cap on its damaged containment unit; rejected 900+ crowdsourced ideas from respected members of InnoCentive community; and dismissed rumors it may shed its Latin American assets. BP's new Gulf Spill chief Bob Dudley also held his first press conference in a bid to offset criticism of the company. Bloomberg Businessweek argues that America can't turn its back on BP, as U.S. executive pay czar Ken Feinberg announces he is stepping down from that role to focus on administering BP claims.
As BP repeatedly botches its communications efforts around the environmental disaster that is the worst oil spill in U.S. history, nearly every other oil company has gone silent save one: Shell Oil. Shell seems to be going after a space once owned by BP by presenting itself as something more than an oil company -- beyond petroleum, if you will. An aggressive new ad campaign, which includes print, TV, online, outdoor executions and two websites, energygalaxy.com and shell.us/letsgo, kicked off May 28. The effort touts the dawn of a future that will be powered by new and multiple energy sources and cleaner fossil fuels that Shell is "unlocking." It also expresses the notion the world will soon be on the road to sustainable mobility and that Shell is "ready to help tackle the challenges of the new energy future." The London office of WPP's JWT assisted Shell on the effort.
The public image of Goldman Sachs, the investment bank, has suffered in the wake of the credit crunch with a famous article in Rolling Stone magazine describing the organisation as a “great vampire squid wrapped around the face of humanity”. BP is widely perceived to have compounded the damage done to its image by the oil spill in the Gulf of Mexico through a poor public relations and crisis management strategy in its aftermath. What affects reputations in turn affects brands. It is too soon to say how badly the Goldman Sachs and BP brands will be affected but it seems certain that they will be. And what all of these examples highlight is how hard it is to manage reputations.
I think I've finally got the answer, and I can thank two smart CMOs for coming up with it independently of one another (you know who you are): Your brand is what's going on when you and your customers aren't looking. That means that branding is how, when and why you and your consumers choose to see and talk about it.
There’s no doubt that BP’s brand value has been affected by the explosion of its Deepwater Horizon drilling rig in the Gulf of Mexico in April. And as the damaged rig has been dumping thousands of barrels of oil into the Gulf each day and causing massive environmental casualties, BP has been on a social media and advertising campaign to repair some of the damage.
BP PLC, under intense legal and political pressure from President Barack Obama, agreed Wednesday to put $20 billion into a fund to compensate victims of the Gulf oil spill, and said it would cancel shareholder dividends for the first three quarters of this year to offset that cost. BP said it would pay another $100 million to a separate fund to help oil-industry workers sidelined by the Obama administration's moratorium on deepwater drilling.
Summoned by President Obama, the top executives of BP, the company responsible for the catastrophic oil spill in the Gulf of Mexico, went to the White House Wednesday morning to discuss the president’s demand that the company set aside billions of dollars in an independently administered escrow account to pay claims stemming from the disaster.
Florida has begun a national advertising campaign to protect its fun-in-the-sun image from the sludge and stink of the oil spill — spending almost as much in June (about $9.5 million) as the state usually spends in a year. State officials describe it as a necessity: tourism is Florida’s largest industry, employing one million people and bringing in $60 billion a year. The goal, they say, is to show off what the state still has to offer.
The ongoing tragedy of BP’s well disaster makes me both sad and mad at the same time, and I’ve been trying to think if there is anything useful to learn from this difficult situation. As I’ve been reading about the tragedy, I think there are at least three things that leaders who are performing large scale innovations can learn from.
BP's name now is inextricably linked with the worst man-made environmental disaster in U.S. history. No amount of public relations razzle-dazzle can change that reality. And while oil still is pouring into the Gulf of Mexico, almost any step that even seems like PR has a risk of backfiring.
Audi is inviting the public to submit ideas for electric car designs through July 31, following Fiat's recent user-generated contest inviting consumers to participate in developing a new car. It's the latest high-profile crowdsourcing exercise, which used to be restricted to startups and smaller companies. Now, it's much more common among bigger brands. Pepsi's doing it, while Starbucks has generated over 21,000 ideas from coffee-lovers for new drinks. Dell's three-year-old IdeaStorm has received over 10,000 suggestions from consumers, and claims to have implemented almost 400 of those ideas. Last year, Netflix paid $1 million for a new idea for a movie recommendation system.
In one sense, the public has never been more informed. This is the first spill that has been covered in real time, with streaming high-definition video on desktops and televisions everywhere, network anchors racking up miles flying back and forth, and throbbing info-graphics that track the mess. We can all see the video for ourselves: an angry plume that looks like hell has been breached and is sending a dark, massive emissary to the surface. But to look for clarity amid the murk is a daily riddle. The size of the spill has been a moving target, with estimates recently doubled to 25,000 or 30,000 barrels a day, even after BP stanched some of the flow.
As BP's shares continue sliding in trading on London's FTSE, its social media outreach and search engine marketing is being criticized as off the mark. Part of the problem, argues the Financial Times, is the British oil giant's "cultural failings" and "shortage of native knowledge of America and how it responds to crisis has been painfully exposed."
BP hasn't asked Twitter to shut down @PBGlobalPR, but it appears to have asked that the site comply with Twitter's terms of service, and more clearly label the feed as parody. Last night the bio of @BPGlobalPR was changed to: "We are not associated with Beyond Petroleum, the company that has been destroying the Gulf of Mexico for 50 days."
Search any of these phrases on Google: oil spill, BP, or Deepwater Horizon. Take a look at the sponsored link on top of the page. It doesn't direct you towards, say, an oil disaster recovery group or news about the spill's impact on the Louisiana economy. In each case, the sponsored link goes to BP's Gulf of Mexico response page--essentially, BP's propaganda page about the Deepwater Horizon disaster.
It seems unthinkable, even now, that the disastrous oil spill in the Gulf of Mexico could bring down the mighty BP. But investment bankers get paid to think the unthinkable — and that is just what they are doing. The idea that BP might one day file for bankruptcy, particularly as part of a merger that would enable it to cordon off its liabilities from the spill, is starting to percolate on Wall Street. Bankers and lawyers are already sizing up potential deals (and counting their potential fees).
Between the BP oil spill and privacy issues at Facebook and Google, the concept of brand trust is coasting at mighty low levels these days. But some marketing experts -- including Paul Parkin, founding partner of SALT Branding, an integrated brand consultancy in San Francisco -- don't think the issue is always that brands are less trustworthy. It's that most companies haven't kept up with swiftly changing definitions of brand trust, especially among different age groups.
Undeterred by criticism of a new TV commercial featuring its leader, BP PLC is pressing ahead with a major ad campaign—in an effort to rescue its badly damaged image—as torrents of oil continue to spew into the Gulf of Mexico. "We are preparing a series of ads to air over the next days and weeks," said Andrew Gowers, a spokesman for the British oil company. President Barack Obama blasted the company on Friday for reportedly spending $50 million on television advertising as the company scrambles to fix its leaking well.
Six weeks after oil began gushing into the Gulf of Mexico, BP is letting the public see live pictures from all 12 of the underwater cameras that are trained on its damaged well. There it is, streaming at all times on a panoply of Web sites, hard to miss in the lower right corner on CNN and other cable news channels: the oil gusher cam, a remarkable view of an unfolding disaster. “Among viewers, the initial reaction is shock and awe,” said Travis Daub, the creative director for the “PBS NewsHour,” which is one of the outlets that has encoded the live feeds so that any Web site can republish them. Commentators have called the images of the gusher grotesque, frustrating and simply too distressing to watch.
BP's new commercial featuring CEO Tony Hayward hit YouTube and US TV yesterday. The damage control isn't just aimed at BP's brand, but the "gaffe-prone" Hayward and images such as AP's latest. After addressing BP on CNN last night, a "furious" President Obama is heading to the disaster site again today. And crowdsourcing solutions to the spill is officially a cottage industry.
As Brandchannel noted earlier, BP's "oil spill disaster is turning out to be a boon for satirists." Everyone from Deapair.com to Zazzle.com to Greenpeace's (and its "Rebrand BP" competition) have offered (for sale in some cases) their own humorous takes on the BP catastrophe. But just like branding, brand satirization is an art where just the right attributes and subtle design details can make all the difference. With this in mind, Brandchannel took a look at ten satirized BP logos and rated them in terms of effectiveness.
One caller raised the fascinating issue of forgiveness, raising the legitimate concern that punishing failures like what happened with BP in the Gulf would lead inevitably to people denying responsibility, blaming others, and seeking to hide their failures. She highlighted the importance of allowing people to communicate bad news without fear, as well as learn from their failures. She advocated a culture of openness and forgiveness that would contribute to learning.
You would think that BP would be fretting over the hijacking of its brand on Twitter, because, in less than a week, the handle @bpglobalpr has amassed a following double the size of BP's real feed. But part of the reason the impostor is still going strong is the company hasn't contacted Twitter to take it down, and it might not, BP told Ad Age today.
P&G's Dawn dishwashing detergent is facing an immense and somewhat delicate opportunity: it has been donating product to help clean wildlife impacted by oil spills since the Exxon Valdez in 1989, and it is already making a contribution to BP's Gulf disaster relief. I understand that its marketers are considering how much more it might do without getting accused of opportunism.
Any oil company finding itself in this situation would be in trouble. But there is, of course, a very specific reason why BP, of all companies, is going to suffer more spectacularly than any other from this disaster. BP, as we now all know, now stands for “Beyond Petroleum”. In the most famous repositioning case of the century, Ogilvy and Landor helped BP to change its logo, its name and its positioning to reflect the fact that the company was now actively “exploring new ways to live without oil”.
For big companies, bounding back from corporate scandal, financial malfeasance or public disaster is difficult--but it isn't impossible. Looking at companies that have come back after business downturns, product problems or corporate scandal, several experts on corporate reputation and crisis management helped Forbes identify 10 companies that have made, or are making, turnarounds after corporate hard times.
BP's chief said the company could have done more to prepare for a deepwater oil leak, as the British oil giant met with affected residents Thursday and embarked on fresh efforts to stem the vast slick now threatening the Gulf of Mexico shoreline. BP PLC Chief Executive Tony Hayward has come under mounting pressure over the spill, caused after a drilling rig BP was leasing, the Deepwater Horizon, caught fire and sank last month. The accident killed 11 workers and raised fears of widespread ecological damage.
BP isn't all bad any more than Petrobras is all good. But, unlike Petrobras (and its informal boss), BP seems to have forgotten the number-one rule in marketing and management: walk the talk. BP is a victim of a disingenuous ad campaign that worked too well, and you have to wonder if its reputation will ever fully recover. Writing in HBR in 2007, reputational risk consultant Robert Eccles and his co-authors presciently noted, "When the reputation of a company is more positive than its underlying reality, this gap poses a substantial risk...BP appears to be learning this the hard way." BP doesn't yet seem to have absorbed the lesson, but other companies can surely learn from its mistake.
It's not the kind of luck Procter & Gamble Co. was looking for, but its Dawn dish soap is one of the few brand beneficiaries of the massive Gulf Coast oil spill. Dawn launched a new ad for its wildlife rescue efforts on Earth Day and was still in the midst of a related promotional fundraiser just as the environmental catastrophe was unfolding. Earlier this week, it helped drive the point home further, shipping 1,000 bottles of Dawn to animal rescuers in the Gulf Coast, and plans to follow with another 1,000 by week's end, said spokeswoman Susan Baba.
Tony Hayward thought he had finally slain all of BP PLC's demons. Now a new one has reared up, and it's the size of Puerto Rico. BP's chief executive is coming under mounting pressure over the vast spill spreading in the Gulf of Mexico, which was caused when a giant drilling rig there caught fire and sank, with the loss of 11 crew members. The oil, still spewing from the well on the ocean floor, threatens to blacken the Louisana shoreline, and BP's reputation.
BP says that the offshore drilling accident that is spewing thousands of barrels of oil a day into the Gulf of Mexico could cost the company several hundred million dollars. But regardless of the out-of-pocket costs, the long-term damage to BP’s reputation — and possibly, its future prospects for drilling in the Gulf of Mexico — is likely to be far higher, according to industry analysts.
In the contemporary era of heightened green awareness and ‘ethical consumption’, major companies have quickly realised that consumers are looking for greener brands, writes Lynne Ciochetto. Design has played a key role in reinventing company profiles with new environmental messages, and designers should question these claims.
I gave myself a deadline of January 15 to do a recap of identity work in the 2000s, assuming that it wouldn’t be an editorial faux pas to do a list of this sort well into the new year. So here it is. An admittedly incomplete — it would take months to do this exhaustively — compilation of the most relevant identities of the past decade. The choices are listed chronologically and there is no ranking system, they are simply there as records of the corporations, products and services that shaped the decade and the identities that helped (or didn’t help) shape their perception in consumers’ eyes and minds.
Copyright © 2009 Davis Brand Capital. All Rights Reserved.
