Oil's New Sell

Among the notable effects of the energy shortage is a radical change in oil-company advertising. Surprising as it may appear to readers and TV viewers who see a sudden gush of oil ads, few major oil firms have increased their advertising much, and many have cut back. But the ads that do run are not aimed at selling gasoline; they tend to be institutional ads that seek to explain the energy crisis and the companies' high profits. Says Paul Haynie, a Needham, Harper & Steers executive who handles advertising for Atlantic Richfield: "It didn't make sense to promote traffic into Arco stations when there wouldn't be enough gas to go around."

At first, the new ads were mostly treatises on the origins of the shortage or exhortations to conserve energy. Amoco, which last April dropped a $1 million product campaign aimed at luring vacationers into the company's gas stations, now runs print and TV "progress reports" on subjects such as "America's great natural-resources appetite." With cameras, Atlantic Richfield followed two overweight men around while they attempted to live without their cars. Each of them lost 35 pounds in three months of walking and watching their diets. Arco commercials now advise weight watchers: "Leave your car in the garage."

Harder Line. Lately the companies have been taking a harder line against criticism. Last month Texaco headlined full-page newspaper ads: "We're not holding back anything." The ad said that Texaco was supplying comprehensive statistics to federal officials that proved there was a genuine shortage of fuel. Mobil warned in newspapers: "Don't read these ads if you've made up your mind about oil profits." Justifying the corporation's 47% earnings increase in 1973, the ad said: "A company cannot continue for many years to make new investments unless it earns a satisfactory rate of return."

Many companies are spending less on energy-crisis ads than they did on their old product pitches. Oil firms tend to guard their advertising figures jealously. But Standard of California cut its advertising budget by 70% last year; Atlantic Richfield's 1974 ad budget is 40% lower than last year's. Standard of Indiana executives predict that in 1974 their advertising outlay will be less than half the $28 million it was in 1970. One of the few firms that plan to advertise more is Exxon, which anticipates a "substantial increase" over last year's expenditure.

Are the ads successful? According to a survey by the D'Arcy-MacManus & Masius advertising agency, Amoco's "Dial Down" campaign, which urges householders to lower their thermostats, was considered "believable" by 95% of those who saw it; 68% of those surveyed thought that Amoco was "sincerely concerned in helping solve the shortage." On the other hand, three U.S. Senators and three Congressmen have petitioned the Federal Trade Commission to demand substantiation for such statements as Shell's claims that it has a solution to oil spills with its "oil herder," a chemical pollution fighter, and that its offshore drilling platforms in the Gulf of Mexico are enhancing the environment for marine life. Within a few weeks, the FTC may ask the companies for data to back their claims. If the commission deems any ads misleading, it may demand that the companies run corrective ads. In that case, there could be a legal battle. The FTC has jurisdiction over product ads, but institutional ads may well be covered by the free-speech provisions of the First Amendment.

At their best, the institutional ads are truthful and informative. One example: Exxon's recent explanations of how it will spend $16 billion on expansion and exploration over the next four years. Other ads are heayyhanded, self-serving and sprinkled with half truths. Asks one Mobil ad: "Are oil profits big? Right. Big enough? Wrong. So says the Chase Manhattan Bank." That is like asking American Motors whether small cars have a future. A Gulf ad correctly states that the energy crisis is partly a result of Government regulations that kept oil and gasoline prices so low that they encouraged overconsumption; the ad naturally does not mention that the oil industry's advertising, which for years exhorted customers to consume ever greater quantities of its products, is also partly to blame.

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