Americans have already spent more than $40 billion on gasoline this year, equal to what was spent in all of 2002, according to Peter Beutel, president of energy-risk management firm Cameron Beutel, who believes the country is headed for a recession spurred by energy costs. "These prices are absurdly high," he said. The oil companies are "sucking billions of dollars out of consumers' pockets."
Yet as consumers pore over websites such as Gas Buddy for information on where to find the cheapest fuel in their area, Shell Oil Co. and BP largely are ignoring the price issue in their marketing. Instead, they are focusing on product and the gas-station experience as they try to differentiate their gasoline brands in a commodity segment.
Shell is sticking to its three-prong strategy in the U.S. developed in 2005 after Hurricane Katrina, a spokeswoman said, dismissing the price jumps as part of a cyclical business. It recently launched a $35 million retail gasoline ad campaign from JWT, Houston, themed "Passionate Experts" that features two male actors playing lab-coated engineers showing how the marketer's gasoline prevents gunky engine build-up. The tag: "Made to Move."
The campaign includes a 15-city "Passionate Experts" tour with demonstrations, interactive games and an exhibit of alternative future fuels.
BP is running an animated commercial from Ogilvy & Mather, New York, that shows children riding in a car singing and drivers filling up at a bright green-and-yellow BP station with whistling gas pumps.
That seems like a big disconnect, coming at a time when there seems to be a lot of glowering and teeth-gritting at the pump. But while Ann Hand, senior VP-global brand marketing and innovation at BP headquarters in London, admitted "people may be upset about pricing" in the "low-involvement category" of retail gasoline, she said consumers are more sensitive about brand differences in fuels. "We are finding people want it all -- price and good service."
Improving customer experiences
BP's mission is to upgrade its 11,500 independently owned U.S. sites because the gas-station experience doesn't rank highly. Its global ad blitz, which broke here a month ago on national TV, is already working, she said. Research has shown the TV campaign is well-liked by consumers and has increased brand consideration, said Ms. Hand. BP will air the spots nationally here through May, then switch to radio and spot TV.
The world's biggest oil company, ExxonMobil, is tackling the energy issue with new corporate ads discussing how it is "Taking on the World's Toughest Energy Challenges," which broke during last month's national TV broadcast of the Masters Golf Tournament. Havas' Euro RSCG, New York, is the agency.
ExxonMobile is also offering $10 monthly rebates for four months or a maximum of $40 -- about the price of a tank fill-up these days -- to Americans who sign up for its branded credit cards through August 31. The company declined to comment.
Shell's Royal Dutch Shell Group arm is meeting with American consumers, government officials and organizations as part of a two-year, 50-plus-city tour to "directly engage" Americans in a dialogue about conservation and how it keeps up with gasoline demands.
Rather than trying to establish an identity against other titans, however, maybe big oil marketers should be trying to separate themselves from independents. When gas prices rise, motorists who normally go to name-brand stations switch to independents, said Bruce Hall, a former researcher at Amoco Corp. (acquired by BP) and now research director at ad agency Howard, Merrell & Partners, N.C. "The difference today between ExxonMobil and independent brands has really eroded."