NEW YORK – Before its downfall, energy giant Enron Corp. trumpeted its New Economy-style creativity in slick television ads that concluded with the line: "It's how we're changing the way industries think."
Without a doubt, Enron Corp. changed the way the energy industry thinks: Companies are turning themselves inside out to distance themselves from the now-bankrupt energy trading company.
Fearful of being put in a guilt-by-association category, other energy companies are taking drastic measures to clean up their balance sheets and reassure investors about their accounting practices and risk handling procedures.
Some are now taking pains to buff their public images. After a period where they reined in their advertising -- amid confusion over quite what profile to present in the wake of the Enron collapse -- a handful of companies are using the media to retool their images.
Never mind the information-age, New Economy glitz that Enron used to dazzle investors during its meteoric rise. The new breed of advertising clearly shows energy companies are reverting to type as conservative and reliable entities, after some attempted only last year to jazz up their old-economy images.
"There has been a shift back toward reliability from adventurism," said John Lister of brand consultant Lister Butler Consulting.
"It's a sign of the times in one way. Enron has sort of contributed to the whole energy sector taking a more conservative stance," he said.
One company, Dynegy Inc., deeply intertwined with Enron last year as it made a later-abandoned $9 billion bid for Enron last November, launched in mid-January a series of ads in newspapers like The Wall Street Journal and The New York Times, featuring mid-level executives exuberantly talking about their work, using a question-and-answer format.
Many analysts believe the ads, aimed at investors and government leaders alike, are a bid by Dynegy to overcome its association with Enron. But a company spokesman said that's not the case. He said the ads, part of a campaign launched late last year, are meant to address "timely" issues, such as how the energy industry works and supports its customer's needs.
Dynegy will spend $8 million on advertising in 2002, slightly more than last year, he added.
Historically, advertising by power companies has been dominated by local utilities responsible for delivering power to households and businesses. Their ads featured the unexciting industrialism of power plants and men in hard hats.
But with the advent of deregulation in the mid-1990s, utility companies like Southern Co., Progress Energy and Duke Energy Corp. stepped up their advertising aimed at highlighting their newly deregulated businesses.
Last year, the companies' annual reports could have been irony-tinged covers from New Economy magazines like Wired or Fast Company: Southern featured an 800-pound gorilla on the cover of its annual report a few years ago.
Not to be confused with a mere utility, Progress ran a television commercial with a man in a suit who got into a street fight. It was meant to show, said Sam Tornabene, director of communications services at industry association Edison Electric Institute, that the company could "scrap when they need to."
Never mind Enron's campaign, which featured a man in a tin suit walking stiffly around global landmarks such as the Arc de Triomphe in Paris and the Bund in Shanghai, while voices made statements like, "The more you learn, the more inquisitive you become." Such statements seem ironically appropriate in light of Enron's precarious situation. In the background, other voices asked "Why? Why? Why?"
In the midst of the industry makeover, advertising spending by the industry surged in 1995 and 1996 to $190 million a year, up from about $80 million in the year prior to that period. Spending through the third quarter of last year hit $167 million, according to Tornabene. Given the pullback after the Enron debacle, he is skeptical that last year's total would have approached the $190 million level.
With a return to business as usual for utilities, he thinks that ad spending will fall this year.
"The category's never really spent a whole lot of money and when you have stock prices that have taken a bit of a hit, advertising's clearly one of the things that goes first," he said.
Uncertainty over financial accounting practices and commodity prices will also take their toll, Tornabene said.
"To use an expensive and somewhat permanent medium when you don't really know what the competitive situation's going to be... it's difficult to be out there with real solid claims when you're not even sure how it's going to play itself out."
But one thing is certain. The new ads will take a more conservative, public service tack and send the message: "We're not Enron."