Alokananda Chakraborty
Advertising

Of oil and advertising...

As oil companies invest in brand building, the advertising industry gets a much-needed shot in the arm

What has such a crude product like oil got to do with the glamour world of advertising?

A lot. As the administered price mechanism (APM) era comes to an end, oil companies are heavily into brand building. "Earlier oil was just a commodity. You drove into a petrol pump, and bought it. Now, with privatisation, oil companies will not only have to compete on infrastructure and distribution, but will also have to invest in brand building," points out Tapan Pal, president, Zenith Media India.

The result? A Rs 150-crore to Rs 250-crore shot in the arm for the advertising industry. Not a lot, given the fact that the entire advertising industry is estimated at Rs 8,500 crore, but enough, in combination with other industries such as insurance, entertainment, and healthcare products, to pull up the industry, at least in the short term. Or, at least, that is how the optimists see it. Specifically, advocates of this particular view hope that this inflow will paper over the yawning gap caused by the wiping away of dotcom advertising, which brought in an estimated Rs 200 crore to Rs 250 crore in 2000-2001.

The big question is: How soon will the money come in? And how it will be spent? Points out Sam Balsara, chairman and managing director, Madison Communications, "The time lag between a policy decision and it translating into higher advertising expenditure is huge. I don't think there will be a significant impact of this in the current year."

Meanwhile, in a small way, the process has already begun. Petrol pumps are getting spruced up. Bharat Petroleum has successfully initiated its corporate branding exercise in the form of the ‘Pure For Sure' campaign, and the HP Club promotions have also taken off. Public sector oil companies, used to a culture of obfuscation and secrecy, are not willing to reveal how they are going to spend their ad budgets. However, sources in the agency circle say, a major part of the money is likely to be spent on sprucing up retail outlets. That also makes sense if the "experience" rather than the product is what has to be ultimately sold. Points out Mahesh Chauhan, vice-president, O&M, that handles the Castrol and British Petroleum account, "While there will be some increased expenditure, the thrust will be on marketing initiatives, including a dramatic improvement in the retail outlets, and the experience."

Given that, some analysts feel that the campaigns have started off by stating the obvious. For example, Bharat Petroleum's "Pure for Sure" campaign. "By law, oil should be pure. So what is the HP campaign saying?" asks one senior media planner. Yet, the new campaign is also a belated admission by the public sector companies that the old "chalta hai" attitude, when you could not demand pure oil as a matter of right, is over. "It is no longer a suppliers market. Customers are becoming more and more selective, and the retail environment is changing," points out Chauhan of O&M.

While public sector companies are waking up to the harsh realities of the market place, at a deeper level, the campaign also underlines the fundamental problem of advertising oil. "How much can you glamourise a nuts-and-bolts product like oil, which in the end, is an essential commodity?" assesses Anant Rangaswami, associate vice-president, TBWA Anthem, which handles the Servo brand for Indian Oil Corporation Ltd (IOCL). "Beyond petroleum, and beyond services, the challenge is to sell it as an experience, the ‘petrol pump experience', which is how it is sold in the West. The experience is what is important."

But clever advertising alone cannot sell oil, a product that is so vulnerable to external events, from a crisis in the Middle East, to stagnant growth in the industrial sector. Take lubricants, for example. This particular segment was privatised way back in 1992, but has suffered due to the stagnation in the automobile accessory category. "Privatisation and the need to advertise meant that after 1992, we had to spend more on packaging and on advertising. That, by itself, did not help the sector," laments a senior official at Hindustan Petroleum Corporation Ltd (HPCL).

At the same time, history asserts that oil advertising can have a significant impact on the fortunes of the advertising industry. In the west, oil advertising has emerged as a major contributor to advertising. Led by the oil industry, the 1970s witnessed significant investment in television. Reeling from the public relations fallout of rising energy prices, American-based petroleum producers became a presence on the Public Broadcasting Service. As historian Laurence Jarvik notes, Mobil soon displaced the Ford Foundation as the single largest contributor to public television, raising its initial programme grant of $390,000 in the seventies to $12 million by 1990.

However, in India, it is likely to take some time for any remarkable impact. And some sectors stand to gain more that the others. The new campaigns, analysts say, will affect all sectors of the advertising industry - print, outdoor and television - but certain sectors such as the outdoor are likely to benefit the most. One major reason for this will be transformation of dreary petrol pumps into one-stop connection points. "Fuel stations will become connection points for the oil companies, where they can connect with the consumer," says Ashish Bhasin, president, Initiative Media.

Boring petrol pumps will change the way they look. Among the proposals that several companies are considering are the installation of ATMs, interactive kiosks, vending machines and other luxuries at petrol stations. A key advantage that oil companies have is their properties at prime locations. Such places can not only be effective outlets for the companies to display their wares, but also be revenue gatherers, as the companies allow other industries to display their advertising there.

Oil companies like IOCL are banking on their huge network. So how does a large network translate into a brand advantage? Points out Rangaswami, "It gives the McDonald's advantage. Whether you are in Jabalpur or in New Delhi, you head for the nearest Indian Oil pump. The network is the brand equity."

All this will benefit the outdoor industry the most. Currently, the billboard industry is passing through a crisis, as empty billboards starkly stand out against the skyline in cities like Mumbai. Industry analysts, and sources in the outdoor industry, see at least 50 per cent of the new ad spend being directed to outdoor. "By its very nature, oil and other products are commodities that are best put forward when one is driving. And, for that reason alone, it makes sense to display them on billboards," says a marketing executive at one of Mumbai's leading outdoor space selling units. One major area of growth will be the rural market, where outdoor advertising will be an effective medium to get across the message to farmers, and others who consume quite a lot of oil.

So will the oil industry save the advertising industry? Analysts point out that while the infusion of funds is welcome, the current flow of funds cannot be expected to turn around the industry by itself, but could be a major shot in a long awaited upturn. © 2002 agencyfaqs!

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