Update: BP's advertising budget during the spill neared $100 million

By Shelley DuBois


FORTUNE -- Late Monday, BP (BP) responded to a request from the Congressional Committee on Energy and Commerce that asked the company to report how much money it had shelled out on advertising after the oil spill in the Gulf of Mexico in April.

According to a letter released today, from committee chairman Henry Waxman to member Kathy Castor of Florida, at whose suggestion the inquiry was made, between April 2010 and July 2010, BP spent over $93 million on corporate advertising, which is three times the amount that the company spent on ads during the same period last year. This dwarfs the estimate reported by the British newspaper the Telegraph on August 28, which suggested that BP spent over $1 million a week. The actual amount is over $5 million per week.

In the letter, BP claims that it increased money for advertising for many reasons, one of which was to inform Gulf Coast residents about the recovery effort. BP also breaks down how it increased ads in local newspapers, a strategy that Mother Jones questioned back in July.

The full press release and letter from the committee:

Committee on Energy and Commerce

Rep. Henry A. Waxman, Chairman

FOR IMMEDIATE RELEASE: September 1, 2010

Karen Lightfoot: (202) 225-5735

Committee RELEASEs details on bp's advertising expenditures related to the gulf oil spill

WASHINGTON, DC  Chairman Henry A. Waxman and Subcommittee Chairman Bart Stupak today released information from BP regarding its spending on corporate advertising and marketing following the April 20, 2010, explosion at the Deepwater Horizon drilling rig.

At the suggestion of Representative Kathy Castor, on August 16, 2010, the Chairmen sent a letter to BP requesting details on the company's spending on corporate advertising and marketing relating to the Deepwater Horizon oil spill and relief, recovery, and restoration efforts in the Gulf of Mexico.

Today the Chairmen sent a letter to Representative Castor, summarizing BP's response and acknowledging her leadership on this issue. According to BP, the company spent over $93 million on advertising between April 2010 and the end of July 2010 more than three times the amount the company spent on advertising during the same period in 2009.

The full text of the letter follows:

September 1, 2010

Dear Representative Castor:

At your suggestion, the Committee on Energy and Commerce and its Subcommittee on Oversight and Investigations sent a letter to BP requesting information regarding the company's spending on corporate advertising following the April 20, 2010, explosion at the Deepwater Horizon drilling rig. On Monday, we received a response from BP relating to this request.

BP told the Committee that they have increased advertising expenditures for a number of reasons, including to keep Gulf Coast residents informed of issues relating to the oil spill and recovery and to ensure transparency during the recovery process. For the period covering April 2010 to the end of July 2010, BP spent $93,429,175 on advertising. This is more than three times the amount the company spent on advertising during the same period in 2009. BP's increased spending was almost entirely targeted at national and local newspapers and magazines and national and local television advertising. A small portion of the increased spending was targeted at Internet advertising. With respect to television and radio spots, BP indicated that it aired fewer spots during the April-July 2010 time period than during the April-July 2009 time period, but a higher percentage were national and longer, 60-second spots.

BP also indicated that it significantly expanded the markets in which it ran local newspaper advertisements during the 2010 period. From April to the end of July 2009, the company ran local market newspaper advertisements in two states and the District of Columbia. In that same period in the 2010, the company ran local newspaper advertisements in 126 markets in 17 states, including the states directly impacted by the oil spill -- Florida, Louisiana, Alabama, and Mississippi -- as well as California, Connecticut, Delaware, Georgia, Illinois, Indiana, Ohio, Maryland, Michigan, New York, Pennsylvania, Wisconsin, and Texas.

BP also provided $89.5 million in grants to aid tourism promotion efforts in Florida, Alabama, Mississippi, and Louisiana following the Deepwater Horizon explosion and oil spill. Some of these funds may have been used for advertising by each state or its tourism agency.

We appreciate your leadership on the issue of BP's advertising expenditures and hope that this information helps answer your questions.

Sincerely,

Henry A. Waxman Chairman

Bart Stupak Chairman, Subcommittee on Oversight and Investigations To top of page

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