Analysis

Air Canada sticks by Enbridge after Tim Hortons bails

Why Air Canada continues to work with Enbridge while Tim Hortons flew the coop presents an interesting case study in marketing, oil partnerships and public relations.

Doughnut chain dumped the pipeline company after an online petition

Tim Hortons bailed on Enbridge ads after a consumer backlash, so how do Air Canada's Enbridge advertisements avoid controversy? (Geoff Nixon/CBC)

As you fasten your seatbelt on an Air Canada flight, the seatback screen begins to play a commercial for Enbridge, the same type of 30-second spot that landed Tim Hortons in a public relations melee earlier this summer.

How does Air Canada skate away from controversy, while Tim Hortons sparked outrage from both oil lovers and haters? The reasons are wrapped up in branding, expectations and head office decisions.

When it comes to customer relations, expectations go a long way. Tim Hortons and Air Canada contrast significantly in this regard.

The in-restaurant entertainment system at Tim Hortons was still relatively new and customers were still becoming accustomed to what it was all about. Tims TV can run advertisements, promote Tim Hortons products or provide news as you wait in line for coffee or as you sit down with a honey cruller.

That was one factor in the problems that arose for Tim Hortons. Customers didn't know what to expect, according to marketing expert Jacqueline Drew, with Calgary-based Tenato Strategy Inc. 
Enbridge sponsored Air Canada's inflight entertainment system in August. (Kyle Bakx/CBC)

"I don't think they had an established roster of advertisers, so when they jumped in with Enbridge, it just seemed like, 'What's this?'" says Drew.  "People were more used to seeing things promoting Tim Hortons summer kids camps and suddenly you throw an Enbridge ad in there and it seems like, 'Why is this promoting Enbridge's values at a Tim Hortons?'"

It didn't help that the Enbridge commercials were not selling a particular product, but more promoting a positive image of the company and its role as an energy provider.

Drew suggests that's one reason why the advertisements rubbed some people the wrong way, leading to complaints against the coffee chain.

Air Canada is in a very different position with its in-flight entertainment. Even occasional flyers are accustomed to having to sit through a series of commercials before being able to surf through TV shows and movies while soaring through the sky. It's accepted that the advertisements aren't related to Air Canada, but simply a way for the airline to make money and cover the cost of the programs you can watch. Air Canada has established itself as an advertising medium, similar to billboards and transit buses, for example. 

'A very knee-jerk reaction'

Tims TV could have grown into a revenue source for Tim Hortons, similar to the extra cash generated by similar in-store systems south of the border such as the Walmart TV Network and the McDonald's Channel.

But the company suspended the ads and later reviewed the program once all the complaints started coming in from anti-pipeline advocates upset about Tim Hortons working with Enbridge. Enbridge is the company behind the proposed $7.9-billion Northern Gateway pipeline, which would ship oilsands bitumen from Alberta to the west coast. It's a controversial project, one even the current Alberta government is not endorsing.

"I thought Tim Hortons had made a very knee-jerk reaction," says Debi Andrus, a marketing professor at the University of Calgary. "But they have to look at what could my audience perceive, what will I lose in terms of revenue, how can I be perceived to be a good corporate citizen — they have to weigh all of those issues."   

Andrus says social media is making it more difficult for companies who want to always present a good image in the world. Not only do companies have complex relationships with suppliers and customers, but there are special interest groups to also work with.

Air Canada hasn't had to face any online petitions or fierce social media campaigns about its involvement with Enbridge, although there are some instances of people raising the issue with the airline. 

 

In a statement, Air Canada says it is pleased to work with the company, adding "Enbridge is a major Canadian company that advertises regularly and extensively in various media throughout Canada."

More options for coffee than flights

When customers begin to complain, companies have to figure out how serious the concerns are and whether they will dissipate or build in strength. Tim Hortons, in particular, is a relatively easy business to boycott, since it sells frequently purchased products. Caffeine-deprived Canadians have many options when it comes to buying a cup of coffee, no matter their loyalty to the double double.

Air Canada, on the other hand, is much tougher to avoid.

"Air travel is dictated largely on location, schedule and price," says Ken Wong, a marketing professor at Queen's University in Kingston. "I might not have as many options if I choose to boycott Air Canada and I want to fly somewhere within the Canadian border."

Wong suggests companies weigh the risks of a potential boycott because they "can be damning." The decision to pull the plug on the Enbridge advertisements and review the Tims TV system likely factored in how much money was at stake.

Tims TV was still in its infancy and probably wasn't a major line of business for Tim Hortons. It's much different for Air Canada, since in-flight advertisements are a part of an airline's ancillary revenue, a significant revenue source that includes everything from selling food and ear buds to seat selection and upgrades.

"When something represents a big revenue stream, you are willing to accept a little more risk," says Wong. "When something is rather insignificant to your overall business, any risk is probably too much."

'Be careful' vs. 'We all need energy'

The Tim Hortons fiasco with Enbridge raises questions about whether companies may think twice before partnering with an oil and gas company. Marketing experts are divided over that notion. 
Marketing professor Debi Andrus suggests companies shouldn't shy away from partnering with the oil industry. (Kyle Bakx/CBC)

Drew suggests some companies might give some extra thought whether it's a good idea to work publicly with players in the oil and gas industry.

"You have to be careful when you are partnering with oil and gas because if your customers have the other mindset that everything should be green energy and that oil and gas is somehow ruining the planet, that could be a bad reflection on their brand," says Drew.

Others, such as Andrus, suggest the hoopla over Enbridge and Tim Hortons was overblown and most people accept the work of oil and gas companies.  

"This issue is overemphasized because we all need energy," says Andrus. "No one wants to destroy the planet."   

Instead, she suggests companies should pay more attention to the people behind online protest campaigns and petitions to understand what agenda they might have.

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