(September 2012) Our annual financial ranking shows some remarkable shifts among the industry’s shareholder value leaders. Despite flat demand and low commodity prices, investor-owned...
Advertising & Branding: Are Utilities Getting It Right?
IN THE EARLY 1970s, WHEN THE "ENERGY CRISIS" DAWNED, New York told electric utilities to stop advertising to promote electric use. State judges deemed such promotion as lacking in "any beneficial content," or even "detrimental to society." It took an appeal to the U.S. Supreme Court for utilities to win the right to tout their product.
Today's questions target the bottom line: Can advertising boost sales for energy suppliers? If so, what does it take?
"This has been the challenge of the advertising industry from day one," says Eileen Arbues, the new senior vice president of marketing for PG&E Energy Services. "Does it really have an impact and can I directly correlate an ad I have run, or a direct mail piece I have sent, to actual overall sales awareness and stick rate of a customer or a product?"
California, in her words, is a "flagship market." For her company, that means a goal "to be the number one player in California by the year 2000 and in the top three, nationally, in that same time frame." It also means a "very healthy budget" for advertising and marketing. The unregulated energy services subsidiary of Pacific Gas & Electric is currently running a print campaign in business journals and trade publications, and it has a radio spot in multiple markets. Since the company isn't targeting residential customers, it's not using television ads.
Enron Corp. is also establishing a presence in the state. Gary Foster, head of public relations for Enron's retail group, says the company is spending more than $10 million on its California ad campaign, and that it, too, has ambitious goals out West and throughout the country. "When the entire market is open," he says, "Enron wants to have from 10 to 20 percent of the $300 billion market, nationally."
Enron expected to have close to $1 billion worth of contracts in hand by Jan. 1, Chairman Kenneth Lay told attendees at an energy conference in Houston last month.
Foster admits that branding won't happen overnight. It's "a huge undertaking for the entire country to get to know this company with the funny name [that] they've never heard of before."
Arbues, representing a utility affiliate, worries about more than introducing a new company name. The problem, she notes, is to figure out how to make an intangible product - electrons and services - interesting and real, and what to emphasize: "The best price isn't always the best product or service or the best value."
To some, however, price is everything.
Image Building: The Traditional Refuge
Many early ad campaigns in New Hampshire featured small-scale product giveaways, such as bird feeders. The more interesting promotions involve corporate image-building on a large scale, building a national or even international presence. Sports teams and stadiums mark the vehicles of choice.
In 1996 Cinergy signed a five-year deal with Cincinnati to rename Riverfront Stadium as "Cinergy Field." Merchandise sold at the stadium carries the Cinergy name. The company has a "big ad at right center field, too," says Cinergy spokesman Steve Brash. It may be