Feature: Monitor your way out of a crisis

Understanding how media report on your industry is vital to handling a crisis. Steve Hemsley interviews EDF Energy and others about the recent price hikes

Who would want to be an energy company comms person right now? For many, the holiday season will have been a miserable one, defending what seemed to be price rise after price rise.

Over the summer, all six of the UK's largest suppliers announced price hikes, and this month has seen no let-up by the media as they challenge the reasons behind soaring bills. ITV1's Tonight With Trevor McDonald, for instance, asked how the energy firms could continue raising prices while recording multi-million-pound profits. Regulator Ofgem also muscled in, saying it would penalise suppliers failing to pass on to customers any future decrease in the cost of fuel.

Suppliers' PROs have tried to point out that the price at which they buy fuel has tripled since 2003, but the media have had little sympathy, giving the major players largely negative coverage. Indeed, customers are being ­encouraged by brokerage firms such as uSwitch to change suppliers (see p31). So, monitoring and evaluating the success of PROs in this sector has become more important.

Trade body The Energy Retail Association (ERA) has tried to explain how energy retail markets work, and the impact on suppliers of changing gas costs. ERA media and comms manager Nicola Bowles uses Durrants, TNS and Magenta to assess media reaction to price rises: ‘We particularly measure which journalists are saying what.'

Nick Sandham, retail PR manager at Powergen (part of E.ON), says: ‘When you announce price rises, you have to ensure certain messages get across. For us these are: the effect of wholesale costs; our competitive price position; and support for vulnerable customers.'

Although Sandham claims the energy sector is ‘never far from the front pages', he insists that media evaluation ‘has shown it is possible to get positive coverage'. He adds: ‘Powergen's withdrawal from call handling in India, and the creation of more jobs in the UK, were widely reported.'

PRWeek spoke to EDF Energy to find out how it monitored events, with responses from journalists, monitoring companies and the ERA.

CASE STUDY: EDF ENERGY

To say the UK arm of Electricité de France had a difficult July in PR terms is an understatement. EDF Energy serves a quarter of the population. Not only did it announce large price rises for gas and electricity, but several businesses suffered power cuts in London - right in the middle of the heatwave, when demand for air-conditioning hit its peak.

Crisis One Price rises; When July 2006; Measurement type Hourly and daily monitoring of national, regional press and broadcast coverage, followed by retrospective weighted tone analysis.

THE MONITORING
The prices that energy companies charge their customers may be linked to the cost of wholesale gas, yet journalists were unforgiving when EDF hiked its gas prices by 19 per cent and the cost of electricity by eight per cent. The company was not alone, so regular media monitoring and evaluation was essential to assess how EDF Energy was performing against rivals such as British Gas/Centrica and Scottish Power. This was crucial at a time when consumers were being urged to switch suppliers.

EDF Energy used EDS Media for national newspaper and trade press cuttings, Durrants for regional coverage and TNS for broadcast. The latter supplies transcripts of news broadcasts and mpegs of TV and radio coverage within two hours of an item being aired.

EDF used Millward Brown's Precis media influence index to evaluate how the company fared against its rivals. This tool scored each item based on a story's potential exposure to EDF Energy's target audience and the level of coverage within the medium. It took into account the size of the headline and whether visuals were included. The Precis tool then calculated the media impact score and compared it to the ratings achieved by EDF's rivals. The analysis was weighted, because a positive or negative story has more of an impact than a neutral article. Positive and negative impact is weighted by a factor of +5 and -5.

RESULTS
EDF got negative mentions in relation to price versus value in 32 national press articles in July, although this was almost half the number endured by British Gas/Centrica. One of the most downbeat articles was in The Sun, which reminded readers that EDF was hitting customers with a fourth price rise in 18 months, just weeks after splashing out £2m to sponsor ITV's World Cup coverage.

The picture was not much better regionally. Out of 68 articles, 64 featured a negative comment. British Gas, however, got 88 negative items.

Broadcasters also took a tough line. Of the 54 negative mentions, 52 came between 24 and 31 July, with the highest-impact pieces on BBC1 Breakfast, Channel 4 News and BBC Radio One.

THE RESPONSE
Early evaluation confirmed that the tone of coverage would be helped if journalists could talk to those making the decisions, rather than PROs. So PROs were dropped in favour of senior management, who were briefed on the need to explain to media the reason for the rises.

‘Once we knew the tone of the negativity, we stressed the mitigating circumstances,' explains EDF head of media relations Andrew Brown. ‘This told us we should try hard to get coverage for our social tariff, which helps vulnerable people.' The latter was achieved when chief executive Vincent de Rivaz appeared on Radio Four, Five Live and BBC2's Newsnight, repeating these messages. Analysis confirmed that, particularly in regional press, he had managed to focus the debate on how EDF could invest in nuclear energy in the UK.

EDF was also able to measure the tone of more influential journalists by using Millward Brown's third-party freelance readers to interpret coverage. ‘We found that careful comms could influence tone. Journalists had access to the widest sources of information to enable a more holistic judgement,' says Brown.

It was found that regionals were more sympathetic. Promoting positive news, such as sponsorship of the Exeter Summer Festival during July, meant that EDF did better than its competitors in the South-West and South-East.

Crisis Two Power cuts in London; When July 2006; Measurement type Hourly and daily monitoring of national and regional press, and broadcast coverage, followed by retrospective weighted tone analysis.

THE MONITORING
When the lights went out in the heart of London, EDF Energy's PR team had to make sure the city was not left in the dark.

Three days after EDF announced it was raising prices for its domestic customers, extreme heat in the capital forced the firm to shut down its power supply in some areas. Journalists went to town on the story, giving EDF as much negative press in two weeks as it would expect in a month. EDF Energy's comms team relied heavily on media monitoring and evaluation to look at what was being said.

RESULTS
The nationals were particularly scathing, with 19 negative articles. These included The Sun's ‘Shops In A Sweat' headline. There was also a stinging attack by the Daily Mail's Melanie Phillips, which received a high negative impact score using Millward Brown's Precis tool. ‘The surge in refrigeration and air-conditioning meant the electricity supply provided by EDF Energy packed up under the strain,' moaned Phillips on 31 July.

Broadcasters gave more negative coverage to the power cuts than they did to the price rises.

THE RESPONSE
EDF director of comms Gareth Wynn says the ability to measure the tone of particular journalists, such as Phillips, was useful, and allowed the firm to present its engineers as ‘stars' working round the clock: ‘Analysis showed that if journalists see a company trying to solve its problems, it can encourage positive coverage and improve the tone.'

An unexpected twist was the discovery that the power blackout in London was bigger news in the regionals than EDF Energy's price hikes. As a result, Wynn says he is now considering investing in an online measuring tool to provide real-time monitoring information so his team can respond more quickly.

THE MEDIA MONITORING COMPANIES' VIEW

The energy market is fiercely competitive, which keeps the media monitoring companies on their toes. It is also a sector of the economy where all the leading players tend to release details of their price rises within a two or three-week period. This means the suppliers invest heavily in media monitoring and evaluation to assess how well their announcement has been received by the media and their customers, compared with their competitors' news.

Keir Fawcus, MD of Precise Media Monitoring, says the tactics of EDF Energy and others meant they avoided a bigger crisis: ‘It was clear that our major energy clients were working hard to engage with the media and stakeholders on the issues that mattered most.'

According to Paul Chapman, account director of EDS Media, a specialist monitor for government and the energy sector, coverage of the sector in July was up by more than 20 per cent on the previous year. Joint MD of TNS Dean Wading says one dilemma faced by the energy firms is ascertaining the effect that being the first or the last supplier to raise prices will have on coverage.

‘If you are one of the last, you can get drawn into a wider industry debate when you might only be comfortable talking about your own company's position,' says Wading. ‘Go first and you can face a scathing attack for being more expensive than your rivals. It is a tricky situation.'

He believes the onus is to react the most quickly to broadcast coverage - something not all the energy companies measure because of its expense: ‘It may be that the monitoring is telling the PR team the wrong person has been put forward as a spokesperson. If this is the case, it will need remedying immediately. The main job of energy firms' comms has been to push the fact that there is help available if customers are struggling to pay. Our analysis shows that not all have been equally successful at this.'

Millward Brown senior account manager Dan Coombes prepares monthly media analysis reports for the energy companies subscribing to its media influence index.

‘Although all energy companies were getting negative press, if a PR team can see that its company is not doing as badly as its rivals, it demonstrates there are still gains to be made from being proactive,' says Coombes.

It can certainly be hard for the energy companies to get their positive messages across. A Factiva Insight analysis run across 650 news and business publications between 1 September 2005 and 31 August this year reveals what journalists covering the energy sector were really interested in.

Of the 2,182 mentions of market leader British Gas/Centrica, 1,696 (78 per cent) focused on price rises, while for Scottish Power, 734 (77 per cent) of 951 mentions were about price. In October 2005, Npower launched a campaign to educate its call centre staff about customers who may be in fuel poverty, and this did generate positive media interest.

‘What we are seeing is the energy companies' PROs shifting to more of a proactive role and using monitoring tools to see where the positive and negative noise is being generated, and focusing on four or five main issues they know will be covered. This increasingly means monitoring influential blogs before news hits the mainstream media,' says Patrick Kervern, Factiva Insight business marketing director.

THE JOURNALIST AND ENERGY TRADE BODY VIEW

John Casey, deputy head of news at financial news channel CNBC Europe, accepts that for any PRO, a price rise is a difficult story, but says it is important to stick to the facts. ‘We're interested in transparency. We need the truth as quickly as possible, rather than disguising something by clever positioning,' he says.

Some journalists have praised the way in which some energy suppliers' PROs communicated price rises. The Sun business editor Ian King says British Gas and Npower were particularly open, but others, such as Scottish & Southern Energy, were less forthcoming.

‘The relationship between soaring wholesale energy prices and higher domestic bills is now established in the eyes of the media,' says King. ‘What I would do is highlight what the company is doing in terms of shoring up energy supplies.' King urges other companies' PROs to try harder to interest the broadsheets in weightier issues. He cites British Gas, which ran a seven-week advertorial series in The Daily Telegraph during June and July.

But journalist Mike Scott, a Financial Times writer who now covers the energy and environmental sectors, felt that many of the energy suppliers' PROs were not bothered about defending their price rises. ‘This was despite the fact there was a good explanation for the price rises and why they are likely to remain high for some time,' he says. ‘The price rises gave suppliers an opportunity to focus on how customers can become more energy-efficient, but I feel they did not do this.'

The number of people using uSwitch jumped 700 per cent when British Gas announced its first price rise in February. USwitch thrives on the media excitement generated by price rises, and its own monitoring reveals the benefits. When British Gas made its last announcement on 26 July, journalists were keen to get uSwitch's director of consumer policy Ann Robinson on the radio and TV. On 27 July she appeared on Radio 4's Today programme, Radio 5 Live's breakfast show, and Radio 2's Jeremy Vine Show.

‘The suppliers blame wholesale gas prices, but much of their gas was bought in advance so this is not the whole story. They are not publicising enough their schemes to help vulnerable people,' says Robinson.

Former Powergen retail director Duncan Sedgewick heads up the ERA. In July he appeared on Sky News and Radio 4 to talk about price rises, and on regional radio to discuss how lone parents can afford energy bills. He also appeared on BBC News 24 to respond to Ofgem's report that more than half of users have switched.

‘Media monitoring has shown how the appetite for information on the energy industry has also raised the importance of being more energy-efficient,' says ERA media and comms manager Nicola Bowles.

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