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Power companies juice up their brands
By LOUIS HAU, Times Staff Writer
Why would a business with a government-regulated monopoly bother to advertise or care about its "brand identity"? It's a question worth asking the Tampa Bay area's investor-owned electric utilities, Florida Power Corp. and TECO Energy Inc. The two companies are the exclusive providers of electric power in their respective service territories. Yet both spend significant sums of money to get their names in front of the public through advertising and corporate sponsorships. For Florida Power, the New Year is bringing a campaign to market a new name. Effective today, the St. Petersburg utility and its corporate sibling Carolina Power & Light are adopting the name of their parent, Progress Energy Inc. of Raleigh, N.C. The switch is starting to show up already on signs and in advertising, although the Florida Power name won't disappear from customer bills until March. The name change is part of an extensive rebranding effort at Progress, which is keen on establishing a unified brand identity and corporate culture following its formation in November 2000 through CP&L's acquisition of former Florida Power parent Florida Progress Corp. As a Progress spokesman has pointed out, many of the company's customers had long confused Florida Power with the bigger Florida Power & Light Co. of Juno Beach. But does it really matter? Even if customers thought the utility's name was "Joe's Donut Shop," they'd still have to buy their electricity from it. Deregulation, which would allow consumers to choose their electric company, has arrived in some states but not (yet) in Florida. But the motivations behind utility branding and advertising aren't that simple, according to Jim Owen, a spokesman for Edison Electric Institute, an industry trade group in Washington. Building a brand develops goodwill, he says, and that can bring intangible benefits, such as fostering more patience among customers if there's an outage. And while deregulation hasn't affected all electricity markets, "Who knows what could happen five, 10 years down the line?" "Electric utilities are still regarded as a crucial part of the public infrastructure system," Owen says. "So anything that can help solidify that bond between the customer and the company is a good thing at the end of the day." Investor-owned utilities in 2002 spent about $200-million on ads in newspapers, TV and other media, which Owen argues is "a relative drop in the bucket" compared to other industries. He adds that advertising and marketing expenses that aren't related to energy conservation or some other public benefit aren't passed on to ratepayers. That means shareholders foot the bill for these costs. Representatives of Progress and TECO declined to reveal their total spending on advertising and sponsorships each year, citing competitive concerns. But their promotional activities are extensive. Progress has a major sponsorship deal with the Tampa Bay Devil Rays that includes signs at Tropicana Field, a mini-blimp, a luxury box, naming rights to the team's spring-training facility and the ceramic-tile mosaic walkway leading to the ballpark that is flanked by flags bearing the company's logo. (Progress owns a 5.8-percent stake in the team. And Rays managing general partner Vince Naimoli is a former Florida Progress board member.) The company also sponsors periodic exhibits at St. Petersburg's Salvador Dali Museum and is a corporate partner of Ruth Eckerd Hall in Clearwater. TECO, the parent of Tampa Electric Co., is a sponsor and "official energy provider" of the Tampa Bay Buccaneers, the Tampa Bay Lightning hockey team, the Tampa Bay Storm arena football team and the St. Pete Times Forum, home of the Lightning and the Storm. TECO also has the naming rights to TECO Arena, a sports and entertainment facility off Interstate 75 in Fort Myers. Ads and sponsorships "fall under the category of professional image," says TECO spokeswoman Laura Plumb. "No matter what path competition takes, that's important to have." Plumb notes that TECO undertook a rebranding campaign of its own following its 1997 acquisition of Lykes Energy, the parent of Peoples Gas System. As part of that effort, the utility adopted a common TECO logo for all of its subsidiary companies. "It takes a lot more to foster a common culture (than) a brand, but that's the visual symbol of it," she says. As for Progress Energy, the company hopes use of the shared name by its two regulated utilities and some of its other business units will help "build a stronger identity with employees, customers, investors and communities," spokesman Aaron Perlut says. Because Progress, like TECO, is a publicly traded company, it is important for the company's current and prospective shareholders to be aware of the diversified nature of its operations, Perlut says. Rebranding under a common name, he says, will help in that effort. Then there's Progress' hope of communicating to customers that their electric utility is now part of a new, improved entity. "We want our customers to know that this is a new company that's committed to better service, lower rates and improved reliability and that it has the resources to deliver on that promise," Perlut says. -- Louis Hau can be reached at hau@sptimes.com or (813) 226-3404
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From the Times Business report
From the AP
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