BP Drops $1 Billion in Brand Value

Media firm General Sentiment estimates that BP has dropped close to $1 billion in brand value.

That’s roughly four times the impact on the Toyota brand earlier this year, according to the firm.

General Sentiment uses sophisticated software to scour and analyze over 30 million sources of content on the Internet, including from news, social media, blogs, and web sites.

According to an article today in MediaPost’s Marketing Daily, General Sentiment’s CEO Greg Artzt is pessimistic about the impact of this drop in BP’s brand value. “It will cost BP a fortune to dig itself out of the hole it is in just on the media side,” he says, adding “At the retail level, it will affect them. They are clearly worried about their brand. They do a lot of advertising. But look at their market cap, they won’t recover.”

Based on the comments about BP at the brand social networking site Brandkarma, I would have to agree with Artzt. Comments about BP are generally not favorable and the BP brand ranks poor to bad on all five criteria (planet, customers, employees, suppliers, and investors).

Additionally, the three Boycott BP pages on Facebook have accumulated over 700,000 “friends.”

The General Sentiment one-page report on the effect the Gulf Oil spill is having on the BP brand value is available on their web site. However, it wasn’t working this morning when I tried to download it.

Brandkarma — the social network on brands

How do your views of brands stack up with those of others?

Now you can find out — through the Brandkarma web site.

Started by the chief creative officer of one of Australia’s largest ad agencies, Brandkarma is a social media platform “on a mission to help everyone make better brand choices and to influence brand behavior for good.”

The site was founded on two important truths:

1) that in today’s world, brands that span national, social and cultural divides can be a greater force for good than governments, and

2) that we all, as consumers with opinions, have much greater power to influence brand managers and their actions than possibly we currently imagine.

Brandkarma was started to help answer two basic (and important) questions:

1) what kind of world do you want to live in?

2) what kind of a world do you want to leave your kids?

Through this site, all ordinary consumers have a chance to make a difference, assuming Brandkarma grows strong enough to get brand managements to listen.

On the Brandkarma web site, you can comment and score hundreds of brands for any of five criteria: planet, customers, employees, suppliers, or investors.

As Alan Webber, founding editor of Fast Company magazine says in his testimonial on the site, “Let’s all come together around Brandkarma and use it as a platform to help businesses / brands become a force for positive change in the world!”

Enter your own evaluations of brands and join the brand conversations at Brandkarma network today, and let us know what you think. Will this network grow powerful enough to influence the future actions of brands?

World’s 30 Hottest Brands

Advertising Age has selected the World’s Hottest Brands, a list of 30 brands succeeding on a global, regional, and local level.

According to the advertising industry’s bible, their goal was “not to create a list of the largest global marketers or rank the brands that contribute the most to their company’s market value.”

Instead, the publication set out to “chronicle the brands percolating at the local and regional level.”

Broken into global, regional, and local categories, the 30 Hottest Brands as identified in this Ad Age Insights report are:

Global

BMW

Coca-Cola

Facebook

H&M

Ikea

McDonald’s

Nike

Nintendo Wii

Pampers

Tesco

Regional

ASOC – As Seen on Screen (Europe)

The Economist (UK, Western Europe, India)

Havaianas (Brazil, South America)

Lenovo (China, USA, Europe)

MercadoLibre (South America)

Nando’s (South Africa)

Natura (Brazil, South America)

Tim Hortons (Canada, USA, Western Europe)

Uniqlo (Japan, Asia)

Local

Azul (Brazil)

Banco Hipotecario (Argentina)

Fullerton Bank (India)

Li Ning (China)

Mama Lucchetti (Argentina)

Manchester United (UK)

Tata Nano (India)

Tencent Holdings (China)

Tsubaki (Japan)

Zipcar (USA)

More details on this report are available from the Advertising Age website.

Also, the report can be viewed online or purchased.

What other local or regional brands do you think Ad Age has missed? Share your thoughts and comments.

Trust Sinks as BP Spins

As BP continues to struggle to stop the flow of oil gushing into the waters of the Gulf of Mexico, its corporate brand image is sinking as rapidly as the destroyed Deepwater Horizon drilling rig that started this catastrophe.

The once ingenious branding campaign of Beyond Petroleum has disintegrated into “Beyond Belief” as the company continues to try to spin its message of “it’s not all our fault.”

From Day One BP’s strategy has appeared to focus more on preventing legal and financial responsibility for this ecological and human tragedy than on controlling the real damage being done to the environment and the many industries and businesses being impacted.

Watching a BP senior executive point the finger at the company’s subcontractors during a U.S. Congressional hearing did nothing to enhance trust in the BP brand (or its leadership). Neither did early reports that soon after this disaster BP was offering US$5000 payments to residents affected by the oil spill if they waived their rights to sue for any damages.

Here’s a company with record profits that seems unwilling to assume responsibility and throw all available resources into stopping the oil flow and cleaning up the damage done. Someone needs to tell BP how Johnson & Johnson reacted years ago when some idiot was putting cyanide into Tylenol tablets.

As Ian Berry points out in his So What’s Next? blog: “BP’s story now looks like spin and their reputation is in tatters.”

Interestingly, that same “it’s not our fault, the employees did something wrong” was given by the BP CEO after their refinery near Houston exploded in 2005 and killed 15 workers.

BP’s initial estimates of just 5000 barrels per day of leakage looks like a giant company spin statement now that more reliable sources are estimating the problem to be in the 90,000 to 120,000 barrels of oil per day range. This gap in the official BP line and what others are estimating is simply Beyond Belief.

A brand is a trust mark.

Is there any trust left in the BP brand?

I find it Beyond Belief to believe so.

BP: Biggest Polluter?

According to this story on the CNN International web site, the U.S. government now estimates that the BP oil spill in the Gulf of Mexico has become the largest oil spill in U.S. history.

At the highest estimates, the BP leakage could already be nearly three times as great as the Exxon Valdez spill into Alaska‘s Prince William Sound in 1989. Even at the lower end of current estimates, BP’s leak is 50% greater than Exxon’s.

And, of course, the problem is not yet over.

Could British Petroleum, which goes by the moniker BP, become the world’s Biggest Polluter?

BP: Biggest Polluter is a far cry from BP: Beyond Petroleum.

Not only is this an environment disaster and human tragedy (don’t forget 11 people died when the Deepwater Horizon oil rig exploded), but it is now a monumental marketing and brand catastrophe.

I dare say there is not much trust left in the BP brand.

What do you think?

Trust Is An Issue For Brands

I don’t put much stock in the annual 100 Best Global Brands report from BusinessWeek for two reasons: the valuations by Interbrand never seem to have any relevance and the list is too U.S. centric to truly be called a global brand ranking.

Nevertheless, there is one interesting and pertinent point made in the BusinessWeek article accompanying this annual listing. This concerns the element of trust, or what the article’s two writers refer to as “the most perishable of assets.”

According to the article, recent polling (in the USA) shows that distrust amongst consumers for business as a whole is growing. Citing a phone survey by public relations firm Edelman, only 44% of Americans say they trusted business, a significant decline from the 58% level recorded two years ago.

This point got me to dust off a posting from The Reputation Garage Blog from October 2008 that I had filed.

In that post, a reprint from an article that appeared in HR Leaders magazine, trust is called “one of the defining issues of the emerging century.”

Public trust in big business, governments, and even non-profit organizations has been declining throughout the 21st century. Here are some “fun” statistics that I gleaned from The Reputation Garage Blog:

* As few as 13% of all Americans place their trust in big business (and it’s not much higher for other mature consumer societies!).
* Only 39% of employees in a Watson Wyatt survey said they trusted senior leadership.
* Some three-quarters of US consumers feel that companies don’t tell the truth in advertising.
* Three-quarters of employees in big companies observed violations of the law or company standards in a 12-month period.

As economies start to rebound, marketers and organizational leaders have an important task in front of them: re-establishing their torn and tattered brands and re-building trust with all constituencies.

Failure to do so is not an option. Unless you want the tombstone for your organization’s brand to read “died of trust-related causes.”

Telstra Backflips on Fee for Paying Bills

Telstra, Australia’s largest telecommunications provider, has withdrawn a controversial A$2.20 fee imposed in September for customer payments made over-the-counter or by mail for monthly phone bills.

“This decision has been taken because it is the right thing to do by our customers,” a Telstra spokesman said. Telstra CEO David Thodey announced the decision to cancel the deeply unpopular fee at the company’s annual general meeting last week.

In our Monday Morning Marketing Memo dated 7 September, we wrote “If Mr. Thodey and his colleagues at Telstra are truly serious about improving customer satisfaction across the company, they need to have a serious look at the fees and surcharges that are not only driving customers crazy, but are also driving customers like me away.”

It appears that the senior management of Telstra has listened to customers like me, who spoke out vociferously against the imposition of this new fee, particularly at a time when Telstra’s corporate reputation and customer service levels are both being hammered.

One leading journalist in Australia referred to “the friendless Telstra” in an article last month, while the headline in an article last week read “Telstra arrogance towards customers exposed as Thodey moves on admin fee.”

As Mr. Thodey told the Telstra annual meeting audience, “We tried to impose this charge without first listening to the people it would affect.” He also admitted that the payment fee has caused customers to defect. [Nothing surprising in that!]

Removing this fee is a major first step in renewing customer preference for the Telstra brand. Hopefully Telstra has learned a great lesson about the need to listen to customers and engage its customer base in a proactive, two-way dialogue.

The other critical lesson here is the need for Marketing to have a presence in the Corporate Boardroom. Telstra’s Board is stocked with lawyers, accountants, financial managers and technical experts. Someone with a marketing focus could have easily advised the Telstra Board that this payment fee was not going to be readily accepted by the company’s customer base.

Walmart’s Sustainable Product Index

The world of FMCG manufacturing and marketing may never be the same again.

As highlighted in our previous post Walmart Creates Green-Tag Program, the world’s largest retailer has announced plans to develop a worldwide Sustainable Product Index. The index will establish a single source of data for evaluating the sustainability of products.

In a press release on its corporate web site, Mike Duke, Walmart’s president and CEO said, “Customers want products that are more efficient, that last longer and perform better. And increasingly they want information about the entire lifecycle of a product so they can feel good about buying it. They want to know that the materials in the product are safe, that it was made well and that it was produced in a responsible way.”

Walmart will introduce this initiative in three phases, beginning with a survey of its more than 100,000 suppliers around the world. The survey includes 15 questions that will serve as a tool for Walmart’s suppliers to evaluate their own sustainability efforts. The questions will focus on four areas: energy and climate; material efficiency; natural resources, and; people and community.

As a second step, the company will help create a consortium of universities that will collaborate with suppliers, retailers, NGOs and government to develop a global database of information on the lifecycle of products — from raw materials to disposal. Walmart has provided the initial funding for the Sustainability Index Consortium, and invited all retailers and suppliers to contribute.

The final step in developing the Sustainable Product Index will be to translate the product information into a simple rating for consumers about the sustainability of products. This will provide customers with the transparency into the quality and history of products that they don’t have today.

I heard a quote in a movie while flying between Singapore and Seoul last week that seems most appropriate in this case:  “this is bigger than humungous….this makes humungous look small.” [I'll send an authographed copy of our book Powerful Marketing Minutes to the first reader who correctly identifies the name of the movie from which this line is taken.]

This is a powerful marketing step by Walmart, with implications throughout the world’s consumer products supply chains and with global reverberations likely to impact more than just the retail industry.

The green hues in the corporate image of Walmart continue to be strengthened and become more believable with each passing day.

Walmart Creates Green-Tag Program

Walmart will soon start requiring manufacturers to compute the full environmental costs of making and distributing their products.

The world’s largest retailer wants to use this information to create a simple green-tag program so its customers will see green label ratings alongside prices on a wide range of goods and products.

“I envision the day that you look at a piece of apparel, you flip a tag over, and learn about how sustainable it really is,” said Walmart Chief Merchandising Officer in an article yesterday in the Wall Street Journal. “It would be like the nutritional labeling is today. But there is some standarization that needs to take place.”

Walmart is reportedly making this move to get ahead of potential U.S. environmental-labeling regulations, something the company sees an inevitable and following similar requirements in Britian and Japan.

If Walmart is successful in implementing this system with its diverse supplier chain, it will certainly redefine how products are produced and sold, and add another criterion to the purchase decision process of millions of consumers.

It’s a great step by an organization that is clearly trying to reduce its environmental footprint while remaining the world’s largest retail operation.

10 New Rules of Branding

I came across the following list of so-called new rules of branding in a recent issue of Marketing magazine here in Australia. The list was developed by the folks at www.BrandingStrategyInsider.com.

Personally, I’d say the list is more valuable as a set of new considerations to be taken into account for marketing strategy, not just branding. But that’s just my opinion!

Anyway, here’s the list:

1. Brands that influence culture sell more; culture is the new catalyst for growth.

2. A brand with no point of view has no point; full-flavor branding is in, vanilla is out.

3. Today’s consumer is leading from the front; this is the most well-informed generation to have ever walked the planet.

4. Customize wherever and whenever you can.

5. Forget the transaction, just give me an experience.

6. Deliver clarity at point of purchase; be obsessive about presentation.

7. You are only as good as your weakest link; do you know where you’re vulnerable?

8. Social responsibility is no longer an option; what’s your cause, what’s your contribution?

9. Pulse, pace and passion really make a difference; has your heartbeat been checked recently?

10. Innovation is the new boardroom favorite.

Can’t say I agree with all of these….but it’s a good way to start a dialogue. Any comments?