Peter Walshe explains why it’s worth investing in brand building to change public perceptions
As one of the most scrutinised industries in the world, moves made by major oil companies to demonstrate greater responsibility can be met with scepticism by media commentators and other influencers. When Shell, BP, ExxonMobil and Total backed the US carbon tax, for example, Greenpeace called it a ‘PR stunt’.
Evidence from the latest BrandZ Top 100 Most Valuable Global Brands research, however, shows that efforts made by oil brands to be perceptibly more conscientious are having a positive impact on their reputation, value and – as a result – their bottom line.
As one of the most important intangible assets a business possesses, alongside its IP and data, brand is a major source of shareholder value. Strong brands predispose customers to purchase, build long-term loyalty, protect a business from risk and help it recover from a crisis. Brands exist in the minds of consumers, which is why the BrandZ research measures the opinions the public holds about them as well as their financial strength.
The world’s ten most valuable oil and gas brands increased their value to the businesses that own them by five per cent over the last year, in contrast to a drop of 20 per cent the previous year. This turnaround was in part due to more favourable geopolitical climate, recovering oil prices and businesses streamlining their operations, but it also reflects the focused investment companies made in developing the consumer-facing part of their brands.
Oil and gas brands have increasingly recognised the importance of public opinion, and re-examined their communications strategies to reach a wider audience beyond legislators, journalists, academics, lobbyists and other influencers. They are also making a concerted effort to engage millennials, who are inclined to select brands which are aligned with their values.
The value of Shell’s brand has increased 23 per cent to $18.3 billion in the last year, following its merger with BG and investment in marketing, brand-building and corporate social responsibility (CSR). It is the 57th most valuable brand in the world.
Shell’s aim is to own the conversation about the future of energy. Its Make the Future clean energy advertising campaign has proved extremely popular with consumers, topping 2016’s viral video charts for number of views. The brand’s actions have spoken as loudly as its words, demonstrating a shift away from fossil fuels – it acquired BG to strengthen its position in liquid natural gas (LNG), partnered with Toyota on fuelling stations for hydrogen cars, and is also looking to develop offshore wind farms.
Shell scores well across the five characteristics our research has shown indicate a healthy brand with future growth potential. Consumers perceive it as having a strong sense of purpose, and a high level of innovation, which it brings to life in creative, powerful, and memorable communications and through a great brand experience. Over time, this leads people to feel ‘love’ for the brand – a word that is not often used in relation to the oil industry, but it is there in Shell’s case.
Also aiming to reframe the climate change conversation was ExxonMobil, which communicated with consumers about its brand purpose – summarised as ‘Powering the world’ – and used advertising to explain how its investment in Gulf coast natural gas facilities will both create jobs and reduce emissions. The world’s most valuable oil and gas brand, ExxonMobil grew its value 11 per cent to $18.7bn in the last year.
BP increased its value +5 per cent to $11.1bn, helped by a major advertising campaign that focused on the launch of its dirt busting fuels. It also highlighted its innovations, which included collaborating with GE to develop a diagnostic system of sensors that monitor offshore platform performance and safety to enable preventative maintenance.
Oil and gas brands with aspirations to accelerate growth by delivering purpose to a high level and better connecting with their audiences should:
Find a point of differentiation. Once this has been identified it must be amplified through a long-term marketing strategy that is geared towards repositioning the brand and improving its image.
Stay the course. Don’t deviate from long-term strategies to lower carbon impact, even if regulations are relaxed. Being responsible will deliver greater shareholder value.
Speak up. Aim to reach audiences beyond those who directly influence regulations and contracts. Public opinion will have an increasing influence on corporate reputation.
Shape the story. Communicate about new technologies and innovations that are good for the environment, emphasising how people can’t live without the products of the oil industry.
The signs indicate that consumers believe the efforts made by oil brands to demonstrate more responsible behaviour are authentic. It’s likely that consumers and NGOs concerned with climate change and ethical issues will raise both the volume of their voices and the pressure they put brands under in coming years.
Every brand will need to have a long-term strategy in place to shift and sustain perceptions.
Peter Walshe is Global BrandZ Director at Kantar Millward Brown. The BrandZ™ Top 100 Most Valuable Global Brands study has been carried out by WPP’s marketing and brand consultancy Kantar Millward Brown annually since 2006. It is the only study that combines interviews with over three million consumers globally about thousands of brands with analysis of their financial and business performance.
For further information please visit: millwardbrown.com