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British energy giant BP Plc spent almost $100 million on advertising after the April 20 Deepwater Horizon oil spill to repair its image. (Tim Boyle/Getty Images)
NEW YORK—British energy giant BP Plc spent almost $100 million on advertising after the April 20 Deepwater Horizon oil spill to repair its image and tout the progress of its cleanup efforts, lawmakers revealed this week.
BP shelled out $93.4 million on such promotions from April 20 to the end of July, nearly triple the amount of money it spent on advertising during the same period in 2009.
According to a document released by the House Committee on Energy and Commerce, BP said that it had to increase advertising spending to keep Gulf Coast residents informed during the cleanup efforts and ensure transparency.
Almost all of the funds were used on national newspaper, magazine, and television advertising, the document revealed—its advertising focus had also increased from 2 states last year to more than 17 states in 2010. A small portion was spent on internet advertising.
Perhaps the most famous ad was run on television in June and featured outgoing CEO Tony Heyward stating, “We will make this right.”
Wrong Focus?
Critics say that BP has spent far too much time and money to repair its image and not enough to repay its liabilities.
Rep. Kathy Castor (D-Fla.), who requested the report on advertising expenditures, said in a statement, “As small businesses, fishermen and mom-and-pop motels, hotels and restaurants struggle to make ends meet, they are bombarded by BP's corporate marketing largesse day after day.”
The company said, in a statement, that its advertising expense is not exorbitant given that total oil-spill cleanup and compensation cost BP more than $61 billion so far. It has also scaled back its advertising efforts in other countries to focus on its efforts in the United States.
BP also gave $89.5 million in grants to states affected by the spill—including Alabama, Mississippi, Florida, and Louisiana—to help promote tourism, which had subsided this summer as oil reached the shores of Alabama and Western Florida.
Some indicators reveal that the increased publicity may be working to BP’s favor. An AP poll indicated that residents approving of BP’s handling of the oil spill clean up rose to 33 percent last month, compared to around 15 percent in June. Still, a large majority of Americans—66 percent—did not approve of BP’s efforts.
The Gulf of Mexico oil spill was caused by an explosion and subsequent fire on the Deepwater Horizon oil platform on April 20, killing 11 workers and destroying the platform. The well was capped in mid-July, and BP is currently attempting to permanently seal the well.
The spill, the cleanup, and the negative publicity for BP have damaged its value. U.S.-listed shares of BP have declined in value by around 40 percent since April 20.
