Electricity Authority takes its own advice and switches to Y&R

Last week, the Labour Party said the $15 million campaign that aimed to prompt consumers to check out the prices offered by different electricity suppliers was a failure after a Ministry of Business, Innovation and Employment report found it had not led to lower retail prices overall and didn’t increase competition. The Electricity Authority’s agency FCB won plenty of awards for the campaign, with 350,000 people visiting the sites and 70,000 people saving $16 million as a result of switching. But that relationship is now over, with Y&R thought to have won the business after FCB declined to pitch. 

Y&R Wellington’s general manager Grant Maxwell said he “was not in a position to comment at the moment” and Electricity Authority’s comms manager Nicky Chilton said it was close to being able to announce the winner but didn’t respond when asked if Y&R had won (it’s thought six companies were invited to tender, with Clemenger BBDO, GSL Promotus and Y&R choosing to take up the offer). 

FCB’s managing director Brian van den Hurk said it had a three-year contract with the Electrcity Authority and confirmed it didn’t take part when asked to re-tender. 

“At the time the future of the Consumer Switching Fund was uncertain and therefore funding for the programme was not confirmed. So we made a business decision to decline to be part of the tender process. Being involved with something uncertain also precluded us from other opportunities in the energy sector, and that wasn’t a position we were prepared to be in. We’re very proud of what we’ve achieved in partnership with the Electricity Authority. The campaign has won numerous awards for effectiveness across multiple channels [it also won Best in Show at the Media Awards in 2011 and Best in Show at the RSVPs in 2012and, more importantly, changed consumer behaviour for the better.”

It’s thought the reason the Electricity Authority is not willing to announce the winner is because it is currently pitching for funding to continue the scheme (the government is reimbursed for the cost of funding through a levy on industry participants and that levy also funds the electricity efficiency programmes delivered by the Energy Efficiency and Conservation Authority). Like most government departments, it doesn’t want to rock the boat in an election year and proclaim it has appointed a new agency for fear of being seen as presumptuous and then having that funding taken away, but it also needs to be prudent and appoint an agency that it can hit the ground running if the funding is approved. 

While Labour’s David Shearer told Morning Report the government should have just mailed the 70,000 people who switched a cheque, What’s My Number, which was based on the Consumer Powerswitch site, was also an education campaign intended to decrease consumer apathy and, according to FCB, it was certainly effective, with Statistics New Zealand saying it even influenced the nation’s interest and inflation rates

“Statistics NZ said the cost of rent, rates, insurance and food had risen in the three months, but the market was caught out by a fall in other household bills that had consistently risen in the past decade. Electricity prices dropped 0.3 per cent in the September quarter [2011], only the third time in the past 40 quarters that retail prices fell.”

When we talked with planning director David Thomason back then, he said the campaign had smashed all expectations and he was amazed at how quickly some of the power companies responded (Contact changed its prompt payment price from 12 to 22 percent and acknowledged the campaign was the main reason for it, while Mercury came up with the Name My Number site).

“I suspect that most of the power companies didn’t think it was going to do anything,” he said.

“[The reason people weren’t switching] was all about apathy, so we had to make it simple and fun, not rational,” he says. As such, the post-it notes on foreheads was an appropriate platform to get people interested and check out the site. And Powershop even used one on Che Geuvara’s head for one of its ads. 

It followed that campaign up with one featuring tigers and bears. 

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