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B-to-b marketers go green

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One interesting effect of the spike in energy costs is that it has made Jeffrey Immelt, General Electric Co.'s chairman-CEO, look prescient in championing the company's Ecomagination initiative, an ambitious strategy launched a year ago to remake the industrial giant as an environmentally conscious business.

Immelt pledged, among other things, that GE would search for energy alternatives in wind power, nuclear power, clean coal and energy efficiency to reduce reliance on oil. At the time of Ecomagination's debut in May 2005, Immelt said, "Ecomagination is GE's commitment to address challenges such as the need for cleaner, more efficient sources of energy, reduced emissions and abundant sources of clean water."

GE is not alone in positioning itself as a company focused on energy conservation. B-to-b marketers ranging from the massive (Boeing Co.) to the less massive (civil engineering firm Vanasse Hangen Brustlin) are marketing their products and services as environmentally sound and energy efficient.

This kind of marketing draws skeptics. "Most of that kind of advertising comes across as very false and phony," said Laura Reis, president of marketing consultancy Reis & Reis. "It comes across like when the cigarette companies were producing anti-smoking ads." Additionally, environmentalists have pointed out that including coal and nuclear power in an eco-friendly strategy, as GE has done, is suspect.

But many of the companies engaging in green marketing are not presenting themselves as altruistic tree huggers. Instead, they are portraying themselves as redirecting their businesses to make them more environmentally conscious.

A hard-nosed edge characterizes the communications efforts, which tend to emphasize the short-term economic benefits of energy efficiency for a company's customers and investors, rather than dwelling on the potential long-term benefits for the planet in reducing emissions.

In a recent document that detailed Ecomagination's performance in 2005, GE emphasized that "green is green": "Ecomagination is a business strategy to help meet customers' demand for more energy-efficient, less emissive products and to drive growth for GE-growth that will greatly reward investors." So far, the stock has remained steady since the implementation of Ecomagination. GE's adjusted share price on May 9, 2005, the day Ecomagination was announced, closed at $35.25. At press time, the company's share price stood at $34.07.

Energy industry hits the gas

Among the industries that have seen a rise in green-oriented advertising are those where petroleum is a central resource as well as a ballooning line item in the budget: energy, transportation and construction.

GE has featured its wind turbines in its corporate advertising and communications. In 2005, GE said, it installed more than 1,300 new wind turbines, which generated more than $2 billion in revenue, a more than 180% increase from 2004.

The wind energy industry as a whole installed more than $3 billion in new generating equipment in 2005, according to the American Wind Energy Association. This growth is attributed not only to the recent rise in the cost of oil but to the growing political uneasiness of depending on a region gripped by political unrest for such a critical resource.

U.S. automakers have begun to move toward emphasizing fuel efficiency, but this is a long-term project for such a huge, slow moving industry that was caught flat-footed by hybrid technology. Automotive News, a sibling publication of BtoB , has recently seen some manufacturers experiment with advertising trumpeting a green message.

In the magazine's pages, for instance, Bill Ford, chairman-CEO of Ford Motor Co., promised innovation that would put 250,000 hybrids a year on the road by 2010 and 250,000 ethanol-ready vehicles this year. At the same time, General Motors Corp. lauded the ability of its cars to use ethanol.

Auto industry supplier Interface Fabrics, which sells fabrics made from recyclables and renewable material, presented itself as a company that can "help the auto industry shift sustainability into higher gear."

Quieter, cleaner aircraft

In the aviation sector, Boeing (which uses GE's GEnx jet engine in its planes) has presented its commercial aircraft as quieter, more fuel-efficient and producing less emissions. The successes Boeing has had of late in its battle with Airbus may be attributed, in part, to this marketing strategy.

At the same time, jet engine manufacturers such as Pratt & Whitney have positioned their products as fuel-efficient and environmentally conscious. "What companies are finding is that being environmentally sensitive is good for business and it's even better for people," said Bill Fields, president of Mintz & Hoke Communications Group, which does work for Pratt & Whitney.

Another industry where green advertising has taken hold is construction, particularly in the design and building of commercial and civic projects. At first glance, it may not seem that construction is an unusually fuel-dependent industry, but as Boyce Thompson, editorial director of Hanley Wood's Builder magazine pointed out, most homes use more energy than two cars, according to the Department of Energy.

Over the past few decades, the construction industry has in many ways committed itself to sustainable building, which incorporates more than the obvious solar power; it also includes engineering to reuse rain water, designs that require less heating and cooling, and the use of renewable or recycled building materials. The U.S. Green Building Council has developed the LEED (Leadership in Energy and Environmental Design) Green Building Rating System, which is standard in the industry.

Both media companies and construction industry marketers have moved to leverage this trend. McGraw-Hill Cos. recently launched GreenSource, a magazine covering the green building movement. Additionally, Zweig White, a media and consulting company serving the architecture and construction industries, has seen one of its environmentally oriented events, the Land Development Conferernce and Expo, increase from $125,000 in revenue two years ago to $500,000 this year, according to Zweig White CEO Dick Ryan.

Vanasse Hangen Brustlin is running ads on the back cover of Zweig White's new publication, Revitalization, which covers urban renewal. VHB's thought leadership ads, which show a pile of discarded tires contrasted with a tire swing, discuss sustainable building practices.

"The green angle has really become more mainstream," said Leo Roy, VHB's director-environmental and energy services. "It's not an add-on anymore. It's what every customer should be asking for."

"The industry is getting green," said Peter Goldstone, president of Hanley Wood's magazine division. "It's a big movement."

Few observers expect that this mind-set of fuel conservation will be fleeting in construction or any industry. Global politics and petro-economics seem to indicate that higher energy prices are part of the present as well as the future.

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