the talk but never walked the walk.
industry is more loathed and distrusted than big oil. But while people may hate
the industry, oil is a necessary evil that our society depends on. Like it or
not, oil companies aren’t going anywhere.
Like many companies in unpopular industries, BP launched a massive advertising campaign to put a little lipstick on the oil pig. Advertising is not very good at changing strongly-held perceptions, but in BP’s case it actually worked.
well, in fact. Its “Beyond Petroleum” campaign was able to move the BP brand
from the bottom of the barrel to one that was perceived by consumers as one of
the greenest petroleum companies in the world. Actually, BP was at the top of a
list of companies that had become greener in the previous five years.
“holier than thou” tone of BP’s advertising placed the company on a perilously
high green pedestal it was sure to fall from.
A little history might be in order. BP traces its beginnings back to English adventurer William D’Arcy. Bankrolled by Burmah Oil, D’Arcy’s firm in 1908 was the first company to strike oil in the Middle East.
year, the two companies formed Anglo-Persian Oil and in 1914 the British
government took a 51% stake. In 1954, Anglo-Persian changed its name to British
Petroleum, the name used on its popular gasoline stations in Britain and across
Petroleum merged with Amoco in 1998, and changed its name to BP Amoco. Then two
years later, after ARCO, Castrol and a few more companies were added, the
company dropped “Amoco” and became just “BP.”
In a press release announcing the change, the company justified keeping the BP name because of its recognition around the world and because it stood for the new company’s aspirations: “Better People, Better Products, Big Picture, Beyond Petroleum.”
2000, a rebranding effort was unveiled. It included a new green-and-yellow
sunburst logo and a new slogan “Beyond Petroleum.” Launched with a massive $200
million advertising and public relations program, BP was talking the talk of a
new, more environmentally-friendly energy company.
BP never walked the walk. Ten years later, BP is still the big oil company it
has always been. In the first quarter of this year, BP revenues were $73 billion,
only $700 million (less than 2%) were from alternative energy. So much for
moving beyond petroleum.
fact that BP is still an oil company isn’t what hurts the brand. What hurts the
brand is that BP is an oil company with a terrible reputation for safety. Known
for cutting costs on safety and maintenance to increase profits, the company has
suffered several disasters over the past few years. (The spill in the Gulf was just
the latest and the largest.)
· In 2005, an explosion at BP’s Texas City refinery killed 15 workers and injured 170 others.
· In 2006, 267,000 gallons of crude oil leaked from an Alaskan pipeline maintained by PB. Later that year, another BP Alaskan pipeline suffered a catastrophic split which led to a temporary closure of Alaska’s entire oil supply. “Severe corrosion” caused by cost-cutting and lack of maintenance on BP’s part was blamed for the split.
· Numerous safety and environmental violations from these events and others forced BP to pay $485 million in fines in the United States alone in the past five years.
To a company that posted $5.65 billion in profit in the first quarter, the fines are minuscule But the enormous profits show just how greedy and callous management is for not running a safe and ethical company. How could management watch reels of its television commercials knowing all too well it was failing to deliver on its promises?
The spill in the Gulf has pulled the curtain off of a company that has been blowing smoke up our butts for years. No consumer, regulator or politician will soon forget this tragedy. Producing oil is an dirty and dangerous business. Pretending it’s not makes disasters like this all the worse. And make no mistake, these disasters are not easily forgotten.
Exxon-Mobil, the world’s largest private oil company. Its methods of operations
are today considered the gold standard in the production of oil. Yet, Exxon
still remain cursed by the images of oily seabirds from the Exxon-Valdez
disaster 21 years ago.
brands with a reputation for quality, safety and honesty are able to survive
even the worst tragedies and negative PR stories. Toyota, Tylenol and Goldman
Sachs have faced some dark days recently, but for them the future is still
bright because the brands are strong.
For BP, not so much. A brand with a poor reputation facing one of the worst oil spills ever is damaged goods. No amount of advertising can fix this. Anything BP says will no longer be believed. You can fool us once, but never again.