[SteamshipTime]

I remember seeing Enron ads on TV and reading articles like this. My opinion then was that their primary operation, stripped to its essence, was that of a middleman. Middlemen have been squeezed relentlessly out of most industries and I concluded then that their prosperity would not last. Historically, IMHO, when companies like Enron go on a merger binge, they're trying to cover a fundamental flaw in their business plan.

In case anyone's keeping track, this would appear to be the second Enron-cide.

[aristeides]

In case anyone's keeping track, this would appear to be the second Enron-cide.

And let's not forget that Goldman Sachs guy that jumped out of a window a couple of weeks ago.

[tallhappy]

SteamshipTime: ___I remember seeing Enron ads on TV and reading articles like this.___

Interesting observation. Here is another article by Myerson.

(BTW, I am not implying anything with these posts).

The New York Times


View Related Topics


January 14, 1997, Tuesday, Late Edition - Final

SECTION: Section D; Page 6; Column 1; Business/Financial Desk

LENGTH: 922 words

HEADLINE: THE MEDIA BUSINESS: ADVERTISING;
Enron, seeking to be a household name, plans to start its campaign on Super Bowl Sunday.

BYLINE: By Allen R. Myerson

DATELINE: HOUSTON

BODY:
EVEN IF it is the nation's largest independent natural gas company and even if it does aim to dominate an electricity market that is larger than the nation's telecommunications market, the Enron Corporation has found that just telling people what it is can pose unexpected challenges.

Simply choosing an appropriate replacement for the name "Houston Natural Gas/Internorth" almost foundered in the mid-1980's when Kenneth L. Lay, the chief executive, learned days before the public rollout that the first choice, "Enteron," meant the digestive tract -- not exactly the image a natural gas company craved. Today, Enron plans to announce its first major advertising campaign to build its image, starting with television spots before and after Super Bowl XXXI on Jan. 26, in markets including New York, Washington and Houston. Two-page newspaper spreads will follow the next day, with advertisements in business magazines and on cable television as well.

The goals: to persuade Americans to demand faster deregulation of the electricity industry, teach them the Enron name and then win them over as customers.

To match the new image, Enron is striving to transform itself from a natural gas and electricity trader, transporter and wholesaler into a competitive electricity retailer as well, with a brand name as familiar as AT&T, MCI or Sprint.

"Enron is not a household name; we know that," Mr. Lay said at his office yesterday. "But we have a chance to create an AT&T for the electricity business."

Starting with a system that serves about 5,000 wholesale customers, Enron is installing enough telephones and billing systems to handle as many as six million retail customers, more than any electricity company has, the company said.

An initial advertising budget of $25 million to $30 million for about six months is likely to exceed $200 million annually -- roughly what a company like Sprint spends to court telephone customers -- in five years, as companies like Enron are allowed to compete for electricity customers in more states, the company said.

The advertisements feature customers around the nation and the world testifying that Enron has brought them cheaper, cleaner, more reliable energy. The television ads will explain how the company helped citizens in Peterborough, N.H., cut their electricity bills by 10 to 20 percent; allowed the Columbus, Ohio, school district to save millions, and enabled businesses and residents in the Philippines to avoid chronic, aggravating power failures.

"Nobody likes a monopoly, and particularly in a place where the state motto is 'Live Free or Die,' " one Peterborough customer says in the ad.

Then an announcer concludes, "You can choose your neighbors, and soon you may choose your energy company: Enron.".

To reach opinion leaders, Enron will run 30-second Super Bowl spots in New York and Washington as well as in a few other cities, including Houston, where Enron's employees are concentrated. The six print advertisements will be distributed in three more localities. When focus groups responded to these advertisements by asking how they could sign up, Enron added an "800" number. Operators will tell callers how they can switch to Enron or help lobby for speedier deregulation.

Several states, including Massachusetts and California, will begin to open their electricity markets to competition within about a year. New York lawmakers are likely to debate the matter this year. Enron, pressing Washington to mandate nationwide competition, predicts that the nation's $200 billion electricity market will be entirely open in about a decade.

Many utilities, however, are lobbying to delay deregulation, which they say would force them to swallow the costs of power plants that were built with regulators' encouragement.

Enron's approach would benefit Enron, not the public, said John M. Castagna, a spokesman for the Edison Electric Institute in Washington, which represents utility companies. "You can't act in a thoughtful, prudent manner if you're racing into a burning building, which may be what this particular company is doing," he said.

Analysts, though, applauded Enron's initiative. Given the brawl over deregulation, Curt N. Launer, an analyst at Donaldson, Lufkin & Jenrette, said, "it's critically important to do this now."

To carry out its offensive, Enron named Elizabeth Arendall Tilney, a former Ogilvy & Mather executive, as marketing chief a year ago. Her former company created the advertising and ran the campaign until Shell Oil, another client, complained of a possible conflict of interest.

On Jan. 1 the account went to Conquest, which made Enron the first client for its New York office. Conquest, based in Paris, is, like Ogilvy & Mather, a unit of the WPP Group, based in London.

The company also has a colorful new logo, featuring a tilted E. It was the last design by the late Paul Rand, who had also done logos for I.B.M., ABC and Westinghouse Electric.

Enron plans a Hollywood-style campaign debut at a hotel ballroom in Houston today. But besides fireworks, searchlights and celebrity impersonators, the company will demonstrate that it is not taking all this too, too seriously. In a five-minute film to be shown at the event, responses from people around the world who are asked to define an Enron range from a cosmetics company that nearly went bust to "something from 'Star Trek' -- a Klingon would use it as a weapon." Mr. Lay then plans to say that the company has its work cut out for it.