Muskingum College

BP’s Rebranding: Green Public Relations

A Senior Seminar Submitted to The Faculty of the Economics, Accounting, and Business Department

By Shuntaro Tadano 5 December, 2008

Table of Contents Introduction…………………………………………………………………………..1 Rebranding…………………………………………………………………………....3 Green PR by BP………………………………………………………………………4 Speech………………………………………………………………………………...5 Publication…………………………………………………………………………….6 Sustainability Report………………………………………………………………….7 BP Magazine…………………………………………………………………………..8 Press Release…………………………………………………………………………..8 Campaign……………………………………………………………………………...9 On the Street………………………………………………………………………….10 Helios House………………………………………………………………………….12 Perception of Consumers……………………………………………………………..13 Survey………………………………………………………………………………...14 Memory and Emotion………………………………………………………………...15 Conclusion……………………………………………………………………………16

In 1998, as a result of a merger between Amoco and British Petroleum, BP Amoco was born, and later Arco and Castrol joined with BP Amoco.１ This combined group took a step forward and became a single brand, BP, in 2000 in order to survive in the 21st century. In the late 1990s, awareness of climate change had grown significantly and criticism of burning fossil fuels became stronger than ever. As a new brand, BP identified its four core brand values; performance, innovation, environmental leadership, and progressive ideas.２３ This rebranding cost "some $7million" for research and preparation.４ The new BP's sunflower-like logo, Helios mark, represents all forms of energies and is named after the ancient Greek sun god. This symbol represents their determination to go beyond petroleum and to become a greener company. John Seifert, chairman of the Global Brand Community at Ogilvy, a PR agency, commented that Ogilvy built real brand equity and an emotional affinity to BP.５ Eight years have passed since the dawn of Helios, and now green advertisements by BP are everywhere. While data suggests a rise in CO2 in the atmosphere, anxiety toward climate change is growing, and oil is being burned around the world. Now consumers are questioning what it is to be a 'green' oil company, and that is what BP is trying to answer. This paper reviews BP's controversial 'green' PR and analyzes how successful it was.

The merger between BP and Amoco in 1998 "made between non-competitors for the good fit available, and to gain cultural advantage, offered a much better opportunity for long-term brand building."６ In 2000, BP Amoco rebranded itself as BP with an entirely new logo to go "beyond petroleum". In 2005, BP created a new business called BP Alternative Energy. This branch of the company was designed to be "green" from the beginning, and therefore this paper will not focus on this brand. Led by Lord Brown, Chief Executive Officer, BP continued delivering messages through PR tools and campaigns. Even after a fatal explosion of the Texas City Refinery in 2005, consistent green PR overwhelmed BP’s bad image and many third party surveys showed BP as having a good reputation after that year. In 2007, an internal brand survey was conducted and BP announced that "[t]he results were very encouraging, with everyone recognizing the Helios even without the letters BP. The research showed that it's the color combination that's recognizable, not simply the Helios shape. People also said that the green and yellow logo symbolized an innovative, fresh, environmental company."７ This paper consists of two chapters: how BP used PR tools to deliver messages, and how consumers perceived these messages. The term Green PR does not frequently appear in a marketing textbooks. However, it has already become a commonly used phrase in certain publications, and

its basic purpose is to enhance the green image of the organization as a whole８. As many other corporations have done, BP has used various tools to create its image as environmentally friendly. This paper will introduce some general PR tools as green PR if they intended to deliver a green image, and it will focus specifically on three types of output: speech, publication, and campaign. It will then examine their effect on consumers and argue it from a psychological point of view. It is important to note that some tools could be identified as institutional advertising or promotion depending on their details. However, all information from BP consistently has an aim; to create a corporate image as green. Therefore, those specific categorizations are not necessary in this paper. Needless to say, speech is a powerful tool of public relations. A speech by someone famous in public can be broadcast or featured by the press, and this media coverage is a very good method of conveying messages with little or no expense. Speeches by BP's workers, especially executives, dating as far back as 1995, can be found on the website. A famous speech was delivered at Stanford University by John Browne, the Chief Executive of BP, in 1997. Its message was so surprising that the speech was featured in many news stories because he, as the top officer of an oil company, addressed cautious concerns about "global climate change".９ Even much later, this speech was referred to in many news stories, which contributed to form a

BP's image because readers were exposed the same story again and again. Mentioning corporate social responsibility, Browne addressed a need to take precautionary actions. Until his resignation in 2007, he had delivered a number of speeches about BP's achievements and current efforts toward climate change at universities and conferences all over the world. Another example of important speech is the one which Lord Brown's successor, Tony Hayward, gave at the International Regulators’ Offshore Safety Forum, right after the explosion in Texas. This kind of immediate action against negative publicity should be thought of first and foremost to save farther damage.８

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The next tool used for public relations is publication. Varieties of publications and their back issues such as press releases, reports, reviews, presentations and magazines are available on the BP website. These are very powerful PR tools to "convey messages and create images."８ In this section, three examples of publications are shown: a sustainability report, the BP Magazine, and press releases. An important strategy of publication is to deliver the same messages again and again so that company can show that they are doing their job consistently. Consistent communication would be able to overwhelm the company's negative publicity.１１ Consistency in design themes can be seen throughout BP’s publications, with the exception of the full-color version of the BP Magazine, and those contents are

differentiated depending on the main target readers: sustainability reports for stakeholders, BP Magazine for BP members, and press releases for business. BP has released sustainability reports and one can download these back issues from 1998 onward. Due to the growing concerns for both the working and natural environments, the seventy-eight-page report was published in 2005 after the explosion in Texas, and as of 2007, the report which is about a half volume of 2005 and little less than 1998, is now available in five different languages. The reports have been consistent with their corporate colors: green, greenish yellow, and yellow since 2003. The sustainability report is now given the same importance as the annual report: they are "intended to maximize disclosure, transparency and stakeholder dialogue."１２ The design of the sustainability report is done by the VSA Partners, Inc., and so are the annual reports and the corporate web sites.１２１３ Jacquelyn Ottman, author of Green Marketing, claims that the transparency is critical for credibility, and, especially, according to the article, "third-party credibility is vital."１４ Unlike the report in 2003, which is the first report by VSA that focused on overall business, environment and society; the report in 2007 focused on operations, climate change and development. Furthermore, as VSA claimed that the report is consistent with a sustainable image.１２ In comparison, Exxon Mobile publishes a more complex corporate citizenship reports which have five points: environment, workplace, corporate governance, human rights

and development.１５ The BP Magazine is published three to four times a year for external and internal readers of BP in order to highlight the daily activities of BP which cannot be covered through the annual report or by the sustainability report. Archives are, of course, available on the web. Although the text-only versions and the HTML version consist of the same design theme as the sustainability report, the full-color version is rich in color and looks like an industrial journal. The BP Magazine covers world-wide reports on related people and places and is written in a way which helps readers to be proud of BP. A recent issue features topics such as the next Olympic Games in London (of which BP is an official partner), oil prices, Trinidad, the source of natural gas, and more. BP publishes other types of magazines such as Frontiers, which focuses primarily on technology, and Horizon, which focuses mainly on business. After the Texas City Refinery explosion on March 23, 2005, the incident was hardly featured by any of the issues until the third issue in 2006 mentioned it as an example of accidents to talk about safety management.１６ The last tool of public relations is a press release. A press release includes new facts and campaigns with a little commentary, with the company's profile and contact information coming at the end. It uses mainly text, and the usage of tables, charts or photographs is limited. In addition, BP's press release consists mainly of text

and some links for a web site version, and sometimes it includes notes to editors and additional important explanations.１７ Back issues of press release are available on the web, but few press releases which explain the explosion of the Texas City Refinery is found. The press release is one of the most important public relations tools, and PR people have been looking for magic words to get the media’s attention in order to be picked up by search engines. According to PR Newswire president David Armon, "green," "environment," and "foreclosure," have become hot terms in 2008.１８ Surveys from Landor Associates and Shelton Group in 2007 revealed a lack of understanding among consumers about the term "green," and Emma Hall pointed out that there was consequently an opportunity to sell products by simply labeling them as green.１９

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Campaigns are not exactly PR tools but, they play a very important roll in creating a green corporate image. "It's time to turn up the heat on global climate change" and "When it comes to green matters we develop grey matter". These are some of the phrases in BP's advertisements to encourage customers to learn more about what BP is actually doing. Peter Mather, the Head of UK country & Vice President of the European Region commented in the BP Magazine that "[w]e are interested in environment, community and we're thinking about using energy in a more responsible way. These are things we want to engage people in thinking about

with us."２１ BP's campaign was recognized not only by consumers, but also by the advertising industry. BP and its PR partner, Ogilvy, have won many awards since the merger. In 2001, Ogilvy won the PR Week Awards – Brand Development Campaign of the Year 2001.２２ Their rebranding efforts in the U.S. toward internal workers and external stakeholders were recognized through the award. Since the surprise speech by Lord Browne in 1997, BP has been working on differentiating its brand image from other oil producers. The following two campaigns were consistent with an approach to tell customers that BP is different, and that it cares about its customers and the environment, "BP can be a friend -- listening to consumers, speaking in a human voice,” said Michael Kaye, Associate Creative Director at Ogilvy２３. Peter Sandman, the Risk-Communication Advisor, pointed out that BP's success is in part because of its position as a "reformed sinner." He told PR and nine managers from Australia, who were trying to improve their image that "[they have] done a very good job of saying to themselves, 'everyone thinks we are bad guys.... We can't just start out announcing we are good guys, so what we have to announce is we have finally realized we were bad guys and we are going to be better.'... It makes it much easier for critics and the public to buy into the image of the industry as good guys after you have spent awhile in purgatory."２４ The "Man on the Street" campaign started in 2001. It ran nationally for about

two months through TV, magazine and newspapers, and then in 2002 and 2003 it ran in Chicago, New York and Washington, D.C. It again became a nationwide campaign in 2004.２５

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The advertisement included candid discussions with people on the

street about oil companies, energy, alternative fuels, and other issues, and welcomed viewers to experience BP and made them feel like they were being cared for by a large company.２５ The TV commercials consisted of interviews with ordinary people asking their opinions about oil companies or alternative energy, and their concerns were answered by comments of BP.２７ In 2005, BP launched a household carbon footprint calculator page on their website and they made TV commercials to help viewers discover their website. The commercials started by asking, "What size is your carbon footprint?" and then answers of people on the street followed. People had no idea what “carbon footprint” meant. According to BP’s website, the household carbon footprint is "the quantity of CO2 emitted to the atmosphere as a result of household energy use, transportation and waste disposal in one year."２８ Then the commercial continued: "Reduce your carbon footprint," "First find out what it is," and provided an address for viewers go to the website. The purpose of this campaign was to build "more humility, more transparency, more openness to the relationship," said Kathy Leech, BP's Chicago-based U.S. Director of Brand Communications.５ This campaign won the Gold Effie Award in

2007 because it created "a landmark platform for a company trying to change the way the world uses, and thinks about, the fuels that are vital to human progress."２７ The Helios House is a cutting-edge gas station experimentally launched in Los Angels in 2007 as a flagship of the “Helios Power” campaign.２９ The campaign was launched nationally in April 2007, and it was designed to make customer experiences at the stand "a little better" by focusing on environmentally friendly goods and communication at BP stations.３０ In this campaign, instead of showing huge trucks or airplanes, animated babies (Abby, Michel, Frankie and Sal) and characters (Burt, Jackson, and Professor B) demonstrated a “little better” gas station.２９ The target customers of the Helios Power campaign are "22-44 year-olds, split between married couples and singles, with 60 percent having at least one child living at home," and the campaign includes giveaways of sunflower seeds and children’s travel activity books.３１ In addition, the flagship station was made of recycled materials such as steels and glass, and it used less water and electricity.３２ The building was certified as Leadership in Energy and Environmental Design (LEED) by the U.S. Green Building Council and this environmentally-friendly gas station gathered the media's attention.３３ Ann Hand, Senior Vice President of Global Brand Marketing and Innovations, said that the coverage by the media was equivalent to a $1.5 million advertisement campaign.２９ BP took another step in 2008

when it introduced a healthy gasoline called BP Invigorate, which cleaned engines so that it improved gas mileage.３４ It became available on the markets in July, and the message, "younger for longer," will be delivered for five years.３５ By making a Team Invigorate with athletes, BP's lifestyle-focused campaign is trying to clean up engines as well as the image of gasoline itself. Now it is time to see how consumers viewed BP. Having experienced explosion, pollution and investigation, BP has suffered from public criticism over the last few years. These incidents may have destroyed "positive customer attitudes established through years of expensive advertising campaigns and other promotional efforts."２ However, many recent surveys show that the overall image of BP seemed distinguished compared to other major oil companies. These results are quite surprising because a survey from the Shelton Group shows that "72 percent of consumers said that a serious environmental infraction would cause them to take an active-type role at the point of purchase."３６ Katie Paine, CEO of a PR company, said that a decade-long consistent PR effort had saved the company's reputation.３７ In addition to the consistency, a survey from Bentley University Center for Marketing Technology revealed that "perception is key."３８ In this chapter, surveys on BP and its implication from a psychological point of view are examined. Note that the following surveys are conducted in limited location, and consequently BP's reputation might

differ country by country. Many surveys were conducted and the overall reputation from the business-side seemed good regardless of the type of survey, whether it be whole brand image or green image. In 2006 and 2007, BP ranked within the top 100 of the Brandz Ranking Report.３９

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Superbrands, an independent brand survey organization

located in more than 70 countries, awarded BP in their report, and the company was ranked at 5th place in 2007 and 32nd in 2008.４１

４２

The Bentley Center for

Marketing Technology released the Green Brand Index Survey on May 21, 2008 and BP was ranked as the 15th least green brand due to pollution.４３ In the same survey, Exxon Mobile was nominated as first in least green brands and Toyota, on the other hand, was ranked in first for the greenest brand. The °Climate Group, an international non-profit organization, released a study in 2007 called Climate Brand Index. It studied how consumers perceived brand which seemed performing on climate change, and BP was ranked as second in the U.K. and third in the U.S.４４ The same survey was conducted in 2008, showing little change in consumers' knowledge: few consumers could still identify climate change brand leaders (U.K. 34%, U.S. 35%), and they expected big names but not "niche green specialists" to tackle climate change.４５ Though BP's result in the Climate Brand Index was different from 2007, they did not rank in the U.K. survey and dropped to fourth place in the U.S. On the

other hand, Multinational Monitor, a bimonthly magazine published by a non-profit organization, named BP one of the ten worst corporations of 2005.４６ BP was ranked so low due to their reckless operations ranging from the working environment to the natural environment. Now let us examine where BP’s good reputation came from. One might argue that the advantage of BP’s budget was enough to create a green image. However, repetition is not always effective. In his book, Memory and Emotion, McGaugh introduced a study which showed that the repetition of retrieving memory does not always improve accuracy of memory, and he said that an emotional event could be remembered better.４７ In our lives, emotional events are not always happy ones. According to a survey by Baumeister, Bratslavsky, Finnenauer, and Vohs, "the bad material received more thorough processing when it was encoded and was, therefore, retained in a more complex, elaborate memory trace." They also noted that "the greater power of bad than good information in forming impressions has been well documented and recognized by researchers."４８ Similar cases have been found in the movie industry. A survey by Basuroy, Chatterjee and Ravid revealed a positive correlation between critics and box office revenue in the first eight weeks.４９ They suggested in the article that "[i]n the context of a limited budget, studios should spend more to control damage than to promote positive reviews." We can see that it is not

easy to create a positive image of a company. However, the creation of image remains important: A study from Bentley University showed that "[t]here is often a large gap between consumers' perception and the actual action companies are taking."３８ At the same time, some consumers are already skeptical about green appeal. Energy Pulse 2007 showed that consumers wanted proof when they were looking at advertisements of home products announcing their efficiency to save energy cost.５０ In conclusion, to create a green corporate image in consumers’ minds, BP used a variety of tools and had consistency throughout their themes and messages. Those messages were often delivered by the media, but, at the same time, the media revealed BP’s pollutions and violations. Among the paradox, the results of consumer surveys showed BP's success in their green PR effort. Although the magic formula to clean up their “bad publicity” is still unclear, one can conclude that BP's consistent delivery of messages and negative image controls made it go “beyond pollution.” １

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National survey: Consumers face 'green fatigue' focused on price as much as 'greenwashing'. Shelton Group press release. October 9, 2007.

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