CLOSE-UP: LIVE ISSUE/BP AMOCO - BP Amoco fuels global strategy with agency rejig/O&M has dumped Shell to head BP’s global ad drive, Francesca Newland writes

BP Amoco’s Sir John Browne is one of the world’s most highly regarded company heads. Since 1995, under his stewardship, the oil giant has quadrupled its market capitalisation to about pounds 80 billion. And, in a move which bodes well for the advertising industry, he has become directly involved in the ad strategy for the company, and was instrumental in its decision last week to appoint Ogilvy & Mather to handle its global ad account.

BP Amoco’s Sir John Browne is one of the world’s most highly

regarded company heads. Since 1995, under his stewardship, the oil giant

has quadrupled its market capitalisation to about pounds 80 billion.

And, in a move which bodes well for the advertising industry, he has

become directly involved in the ad strategy for the company, and was

instrumental in its decision last week to appoint Ogilvy & Mather to

handle its global ad account.



The appointment ended BP’s 12-year relationship with Doner Advertising,

and US-based Amoco’s three-year relationship with Leo Burnett.



It also means that WPP’s two networks will be running global accounts

for two rivals. J. Walter Thompson’s grip on the Shell account has been

growing over the past two years. It has the business in all markets

except the US, where it was handled by O&M. O&M resigned that account to

secure BP Amoco.



However, the clients are, apparently, easy about the arrangement. Raoul

Pinnell, global head of brands and communications at Shell

International, says: ’I’m satisfied they (JWT and O&M) are competing

organisations.’ Pinnell has good reason to say so, having watched the

sparks fly as he gradually shifted Shell’s global account from O&M to

JWT.



He was less satisfied to discover that O&M had been in top-level talks

with BP Amoco, however. ’I am concerned that it would appear that O&M

was talking to BP prior to resigning the (Shell) account. I’m concerned

about the ethics,’ Pinnell says.



The spark for the BP Amoco review came last year when BP merged with

Amoco. Browne has promised pounds 1.2 billion of savings through the

integration of the two companies and, no doubt, expects some of that sum

to come from hiring a neatly aligned single network.



But the decision to move will also have been driven by Browne’s energy

and ambition for the company; he believes the business can move forward

by changing its advertising agency. Since the beginning of the year, he

has met the industry’s most senior figures, including Bill Muirhead, a

partner in M&C Saatchi, Martin Sorrell, chief executive of WPP, and

Shelly Lazarus, chairman and chief executive of O&M.



Browne’s ambitions seem to have outpaced those of Doner, a relatively

small, privately owned network. The review leaves Doner’s London office,

which was set up as a satellite to service BP, without its main

client.



However, it seems unlikely that the review was driven by any failure on

Doner’s part to develop credible work; the agency’s ’for the journey

ahead’ global campaign has been praised. As one observer says: ’I’m

surprised by the timing of the review. The work Doner Cardwell Hawkins

has done seems to establish a global campaign and a strong

identity.’



Creating a strong identity for a brown, smelly liquid that costs a lot

and pollutes the environment is no easy task.



As one petrol marketer says: ’The category is low interest, low consumer

involvement. Everyone talks about sexy brands like Orange, but people

fill up with petrol every week, so what’s the big deal?’



Lack of consumer interest in the substance has, historically, led petrol

marketers to sell on price. Insiders say that there is a need to move

the marketing position on.



’We have to find ways of challenging the internal mindset, which says

that people only buy petrol on price. People will pay more if you give

what they want,’ one source says.



Another adds: ’The pressures on the business generally are on the

prices. There is excess capacity in refining and service stations and

this is reflected in (oil companies’) operating profits. The majors are

going to have to change their thing and offer a premium product.’



BP neatly attached environmental issues to its green livery with the

Doner campaign and the introduction of ’cleaner fuels’. But a ’green’

positioning is not enough to sustain a strong global brand. The

protection of the environment is a salient issue in Europe, particularly

northern Europe, but in other parts of the world it is not

important.



’In some parts of the world, the car is seen as economic liberation. In

fact they are offended if we would try to deny them that freedom. And in

the US, if you try to stop people using their car, your life’s over,’ an

industry expert says.



The rebranding of BP Amoco, undertaken by the identity consultancy,

Landor, in San Francisco, also throws up serious brand equity problems.

’There is great affection for the Amoco brand in the States, which will

be a big challenge,’ an executive familiar with the American market

says.



All of which leaves O&M with a difficult task. BP Amoco and O&M were

unwilling to comment for this piece, so the direction the campaign will

take remains a secret.



But O&M must have come up with an impressive strategy to convince BP

Amoco to go with the agency that Shell was gradually rejecting - a point

Pinnell is keen to point out when asked if he is unhappy that O&M is

moving to a rival advertiser. He says: ’O&M doesn’t seem to have any

pride in the work it has done for Shell.’



What O&M does have on its side, however, is the energetic and

entrepreneurial Browne. Since he took over, he has applied a Midas-like

touch to BP Amoco - with that kind of backing, good advertising is very

possible.



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