BP hiked adspend in response to oil spill

03 September 2010

WASHINGTON, DC: BP more than tripled its adspend following the Gulf of Mexico oil spill, in a bid to make sure its response was "as transparent as possible."

Figures released by the House of Representatives' Energy and Commerce Committee showed the corporation boosted its communications expenditure to $93m (€72.4m; £60.3m) from April 20 to the end of July 2010.

Henry Waxman, chairman of the Energy and Commerce Committee, and Bart Stupak, chairman, of its Subcommittee on Oversight and Investigations, revealed details in a recently-published letter.

"This is more than three times the amount the company spent on advertising during the same period in 2009," they said.

BP's activity covered 17 individual states, including Alabama, Florida, Louisiana and Mississippi – all directly affected – as well as regions such as California, Illinois, New York, Wisconsin, and Texas.

This can be measured against just two regions in the corresponding period in 2009, with traditional media at the heart of the organisation's efforts.

Waxman and Supak added: "BP's increased spending was almost entirely targeted at national and local newspapers and magazines and national and local television advertising.

"BP indicated that it aired fewer spots during the April-July 2010 time period than during the April-July 2009 time period, but a higher percentage were national and longer, 60-second spots.

"A small portion of the increased spending was targeted at internet advertising."

Scott Dean, BP's general manager, press relations, stated its goals were to keep the public up-to-date and provide instructions for seeking compensation where appropriate.

"Our objective has been to create informational advertising to assure people that we will meet our commitments and tell them how they can get help-especially claims," he said.

"It is an important tool to help us be transparent about what we are doing."

While BP's initial executions incorporated print ads featuring Tony Hayward - who was ceo at the time - it soon revised this strategy as the crisis continued and the executive's reputation suffered.

Given that its attempts to halt the leak have absorbed some $61bn, the company suggested such a level of adspend was "really not egregious".

However, BP has also abandoned brand campaigns and diverted the vast majority of its media budget to the US since the spill occurred.

Gene Grabowski, senior vice president and head of the crisis and litigation practice at Levick Strategic Communications, argued this kind of approach was unsurprising.

"I don't know how much they're spending, but it's probably less than they would have spent on a global ad campaign to advertise the benefits of what they generally do," he said.

"You don't see any ads like that from BP. As a matter of fact, you don't even see Exxon advertising like that right now.

"What consumers want to hear now is what they're doing about the environment."

Speaking on a conference call with investors in late July, Carl-Henric Svanberg, BP's chairman, highlighted the potential scale of the organisation's internal transformation.

"We have to recognise that the tragedy of the Macondo well explosion and subsequent oil spill has been a watershed for BP," he said.

"In future, we will be a different company and the challenge of rebuilding our reputation requires fresh leadership."

Data sourced from Wall Street Journal, Fortune, Financial Times, Seeking Alpha; additional content by Warc staff