Propane promotion

Fifteen years ago, the propane industry thought it was doing a major advertising push by collecting $1 million in voluntary contributions from marketers to run television commercials during the NFL Game of the Week.

Today, industry leaders are realizing it takes a lot more research, marketing expertise and – most of all – money to convince what experts claim is a primarily female, home-owning decision-maker to use more propane.

This spring, the Propane Education & Research Council launched the $9 million second phase of a five-year national television, radio and magazine advertising campaign designed to influence homeowners to switch to propane. Last year, the program cost $4 million in an escalating framework geared to improve consumer awareness, make a favorable impression and inspire them to buy more.

Television spots: Comfort and reliability continue to be the primary themes of messages aimed at consumers in TV, print and radio ads.

Building on last year’s “House sitter” television ad, the new phase includes two commercials meant to convey the comfort and reliability of propane. In one, a self-assured mother snuggles with her children on a couch in front of a propane-fueled fireplace while a dad showers in a house that exudes warmth and contentment.

In another, a lightning storm disrupts electricity in the middle of the night, but a young mother confidently warms a bottle on the propane-fueled stove to soothe her crying infant. Propane’s reliability is underscored against the vagaries of electricity.

The commercials are high-quality, professional productions that seem on par with those of other branded products. They are being shown an average of 34 times a week for 16 weeks in March, May, September and November on HGTV, the home and garden cable network. They also will appear on A&E, The Discovery Channel, The Learning Channel and Do-It-Yourself Network.

Three print ads are being placed in national consumer lifestyle magazines – Southern Living, Country Living, and Country Home – plus trade magazines and many publications that sell home plans directly to consumers, all with the hope of catching homeowners when they might be building or remodeling and willing to consider propane.

Print ads placed in national consumer lifestyle magazines and publications that sell home plans hope to catch homeowners when they are ready to build or remodel.

One of the print ads features a woman enjoying a shower against the backdrop of a quiet rural home as the sun is rising. A headline says, “Propane. A decision you’ll live with quite comfortably.” The smaller type promotes the advantages of a propane water heater and directs readers to the Energy Savings Calculator on the PERC website at www.usepropane.com.

A second print ad focuses on a little girl sleeping peacefully against a backdrop of her home on a snow-covered hillside. The copy reads, “Propane. It also comforts your mind.” Smaller text speaks to the efficiencies of a propane furnace versus an electrical one.

The third ad is in production.

2002 Local Media Markets

This year, the campaign reaches into 22 medium-size local markets – each representing 260,000 to 550,000 households that researchers believe arelikely to buy propane. Area viewers saw the commercials 20 to 25 times each week from March through May on their local network affiliates in addition to the national cable spots. Two humorous, 60-second radio commercials are also running in these areas on stations featuring country, news and adult contemporary formats.

Targeting a buyer

What distinguishes this campaign from everything that has gone before is the level of expertise that was lassoed and the money spent to accomplish the goal.

In 1999, PERC hired Wirthlin Worldwide, an international market research firm, to determine the core values that would motivate consumers to switch to propane. In 2002 alone, that expertise cost the industry $613,100, more than half of which was spent to determine and track the homeowner audience.

Through focus groups and surveys, Wirthlin found two dominant values for determining whether to use propane – peace of mind and personal satisfaction.

Unlike the 1980s effort that appealed to the predominantly male NFL audience, today’s propane commercials are designed around issues of family, security and comfort because surveys indicate women are the primary decision maker when it comes to heating the home.

The campaign – engineered by the Washington, D.C.-based Porter Novelli ad agency – targets adults (primarily women) age 35 to 64 with a household income of $25,000 to $75,000, living in small towns, on farms and in rural areas without gas pipelines. Some in this group would own a vacation home, are interested in home improvement, remodeling and gardening, go camping and hunting, and listen to country music.

Strategists sought out rural areas that were growing, but not so rapidly that developers might lobby for extension of a natural gas line. They also looked in areas that currently use some propane as logical opportunities to expand use.

“The sense is if you have propane use in an area, you’re going to have more opportunities for expanded use of propane rather than going into a new area,” says Debra P. Abell, Porter Novelli’s executive vice president. “What we learned is there is propane being used in little pockets across the country. That’s been the challenge. We don’t want to waste our money talking to people in areas in which propane is not feasible. But how do you reach these pockets?”

Subsequent research found the 22 “pockets” that yield a concentration of the target audience. Commercials were test-run in five of those local markets, followed by surveys that prompted some changes before their national launch.

Money, money, money

All of this expertise costs money, and PERC is sensitive to concerns of marketers who fear their dollars, culled from the propane industry’s check-off program, are being spent on fancy materials.

Walter H. Cressman, president of Cress Gas in Richlandtown, Pa., and chairman of PERC, says he understands those concerns. As a smaller marketer who sells about 4 million gallons annually to 7,500 customers, Cressman says he, too, had a hard time understanding why the industry needed to spend millions of dollars with no immediate payoff.

“It’s shocking until you get to understanding how large this country is and what it costs to get into each market,” he says.

Cressman points to the $100 million “Got Milk?” campaign, which spends another $30 million to $50 million each year on “maintenance advertising.” Comparably, the $9 million PERC spent this year still is negligible compared to the task, he observes.

“There’s never been a (comprehensive) national campaign to raise the awareness of propane,” he says. “People buy a home, and they never think of using propane as a fuel because it’s never been out in front of them. We’ve never had the resources as an industry. We don’t have the resources now to do the job adequately.”

Consumer Advertising Campaign

Because revenue is tight, the council is “ramping up” the campaign’s reach and expense over five years as check-off funds increase. PERC hopes to spend $10 million to $13 million next year, $15 million to $17 million in 2004, and $18million to $25 million in 2005. The plan is to build awareness each year as more people are exposed to the message. Strategists believe behaviors will start to change by years four and five.

“We want to produce results for the industry, but it’s important for people to understand that success is not going to happen overnight,” says Kate Caskin, PERC’s vice president of communications. “Hopefully there will be those near-term wins along the way that tell us we’re on the right track, but to think that we’ll achieve overnight success is not a realistic expectation.”

Early results from the campaign’s initial run were less than inspiring, although Caskin quickly notes that outside factors – most notably last winter’s enormous leap in energy prices – were likely to blame.

Before last year’s commercial ran, Wirthlin surveyed the level of “propane awareness” at an “off-the-charts” rate of 21 percent. But in June, after the commercial ran, propane awareness among the same demographic group actually sank to just 9 percent.

“We knew there was that issue of the volatile energy prices,” Caskin says. “We really did not get out of the margin of error in any of the areas we were measuring, and Wirthlin told us that would happen because of (how little) we were spending and it being the first year.”

Other results were more encouraging, with the percent of homeowners associating propane as a “good value” increasing 7 percent.

Wirthlin will repeat those surveys in June and report results to PERC at its July meeting. Wirthlin also is working to create a survey for the 22 local markets to ask retailers how their numbers – such as tank installation figures – compared before and after the commercials aired.

Cressman says his support for the program depends on those survey results.

“If those measurements are showing we’re not moving the needle on awareness, particularly in the 22 local media markets, I’m not willing to keep spending the money,” he says. “We’ll have to go back to the drawing board and find out what works. I’m not willing to commit the dollars unless I know it’s going to work.”

More outreach needed

While the national ad campaign is significant, it is only part of the equation. PERC hopes marketers will take its lead and develop their own ads in their markets using PERC materials, such as camera-ready art and CD-Roms with electronic photos and copy containing the “Exceptional Energy” brand. The “tool kit” allows marketers to personalize their services with professional-quality designs that link with the national campaign.

Moreover, PERC will give states money toward producing ads through its Consumer Education Partnership with States program. States can recoup 50 percent more than they request in state rebates if they use the council’s materials. About 1,600 marketers have requested kits since March 2001.

“It helps to maximize the reach and frequency of this national campaign through their efforts,” Caskin explains.

Glenn R. Saunders, president of White Mountain Oil & Propane Inc. in North Conway, N.H., and chairman of PERC’s Consumer Education Advisory Committee, says the campaign, with all of its expertise, is a vast improvement over NPGA’s early marketing attempts. But Saunders, who was NPGA president 1993-1994 and served many years on its marketing committee, says the industry also needs to focus energies on promoting propane water heaters, fireplaces and manufactured housing.

For now, Cressman says he is willing to trust the advertising experts.

“I want someone who does not use propane today to think about buying propane and using propane for their home,” he says. “I know how to deliver propane pretty well and pretty efficiently, but I don’t know how to change the market.”

The national marketing effort launched last year by the Propane Education & Research Council might be the industry’s biggest advertising campaign, but it wasn’t the first.

In 1946, the Market Development Council was formed to initiate a $1 million radio and print advertising campaign from voluntary contributions. Working with propane producers and manufacturers, the council asked marketers to return a portion of their income to pay for the campaign.

Dan Myers, NPGA’s executive vice president, says the campaign was “fairly successful” through the 1950s, until marketers who participated complained that others were benefiting without paying into the fund. Participants stopped contributing, and by 1962, when the council and the existing National LP Gas Association merged, marketing efforts ceased.

When President Ronald Reagan ended price regulations in 1980, the industry launched new advertising efforts. Once again, industry leaders tried a voluntary Market Promotion Program, intending to raise $1 million for advertising. Marketers were asked to contribute $150 per bulk plant to pay for TV, radio and print advertising.

Like the current campaign, this one paid for market research and created professional commercials for prominent time slots, including during the NFL Game of the Week. Much of the money was spent in partnership with the American Gas Association for commercials that promoted “gas energy.” Similar, propane-specific commercials and print ads were made available to individual marketers who wanted to add their own information and advertise locally.

Even though $1 million bought a lot more air time in the 1980s, it wasn’t nearly enough, Myers says.

“Everyone told us we needed $25 million to do what we wanted,” he says. Still, surveys showed consumer attitudes toward propane increased “a few ticks” following the campaign, he said.

Despite these gains, voluntary contributions once again tapered off as marketers realized others reaped the same benefits without paying into the fund. In 1989, the National Propane Gas Association folded those fees into its due structure. Even then, members complained that non-members still benefited from the ads without paying for them, according to Myers.

“That’s when PERC came about,” he says.

Under the national check-off program, PERC receives three-tenths of a cent from the sale of every propane gallon sold. Some of that money pays for the consumer education advertising campaign.

Even though earlier efforts contained elements similar to the current campaign, Myers maintains there are two differences: the amount of money being spent, and the expertise of the advertising agency and PERC staff.

“It does take dollars,” Myers says. “That’s the bottom line, and everyone knows that. … It’s something the industry has wanted to do for a long time, and it’s something the industry can only do through an organization like PERC where you’ve got everyone in the industry (participating) … and you’ve got sufficient funds where you can begin to see a real effect.”