AN EXAMINATION OF CORPORATE IMAGE ADVERTISING IN THE OIL AND GAS INDUSTRY

摘要

Corporate image advertising is a way that a company can promote itself, with a message about the company in general rather than specific products or services. A company can use corporate image advertising as part of its overall effort to manage its corporate reputation. Both large and small companies engage in corporate image advertising. This study provides a descriptive analysis of corporate image advertising by four of the largest publicly-held firms, as measured by market capitalization, in the oil and gas industry: ExxonMobil, Royal Dutch Shell, Chevron, and British Petroleum. The sample included 41 image-oriented television ads aired by the four firms. The ads aired a total of 25,095 times during January 2014 to February 2018. The ads varied in length from 15 to 60 seconds, with about three-fourths 30 seconds or less. The shortest ads, 15 seconds, were the most cost-effective, gaining the highest engagement rating. BP had the most total ads, 17 different ads, which aired 10,795 times. ExxonMobil ran almost 14,000 national airings of its 14 different ads. To enhance corporate image, the ads featured five different corporate social responsibility themes: operational safety, economic impact, environmental responsibility, philanthropy, and sustainability initiatives. The most prevalent was operational safety, which accounted for 43.9 percent of ads, followed by economic impact and environmental responsibility, each of which accounted for 29.3 percent of ads. Corporate image advertising is sometimes used to counter negative perceptions, but also to bolster a company's existing positive image. For example, in this study BP was found to use corporate image advertising to make the case that the company operates in a safe way. Such ads counter the negative publicity received by the company after the 2010 Gulf of Mexico oil spill. Improving a company's image is connected to its financial performance and market valuation. A better image aka corporate reputation is associated with higher earnings and higher market valuation. The petroleum industry is negatively viewed by the public, ranking near the bottom, 22 out of 25 industry sectors. Only healthcare, Pharmaceuticals, and the federal government ranked lower. The rankings are significantly different, however, depending on political affiliation of who does the ranking. Half of Republicans have favorable views of the oil and gas industry versus on 27 percent of Democrats. At the other extreme, 60 percent of Democrats have favorable views of the movie industry versus 35 percent of Republicans. Corporate image advertising may help improve these favorability rankings. There is a lot of interaction between business and politics. Depending on which political party controls the government, the oil and gas industry will be affected positively or negatively. Climate change is a major political debate, notably, whether change will be catastrophic or not. Recent scientific research indicates that climate change will not have a significant impact one way or the other. However, science may do little to change entrenched political views of catastrophic climate change proponents. Politically, to concede that the opposing political party is right, and you are wrong is problematic. In any event, whatever the outcome of the climate change political debate, corporate image advertising, which highlights the efforts of oil and gas companies to protect the natural environment, will be beneficial to the firm and industry.