How the Big Six Energy Suppliers’ Overcharging Pushed Customers to Switch Providers

Lorna Gill Posted by Lorna Gill

High energy prices set by the big six providers have caused customers to seek better deals online via independent suppliers.

Consistently high energy prices in the UK have motivated customers to search for better energy options. Adthena’s PPC data shows how press coverage of soaring costs has driven people to search engines, seeking more value for their money from independent suppliers.

With the right ads, the right placement, and the right timing, independent suppliers have been snagging the traffic and ultimately paying customers – let’s see how they’ve done it.

Every Reason to Switch

In recent years, loyal customers have been getting a raw deal from Britain’s major energy providers. As The Guardian reports, the average dual fuel big six (npower, EDF, EON, SSE, British Gas, and Scottish Power) customer would have lost up to £234 per year if they did not switch providers between 2012 and early 2014.

Meanwhile, the Competition and Markets Authority found that 40-50% of big six electricity customers in the UK have stuck with their provider for ten years or more. The energy regulator Ofgem said in January that these companies are keeping prices high while benefiting from the falling cost of oil to boost their profits.

Given that the big six is clearly giving customers the short end of the stick, you’d think that other providers would be using PPC to attract customers looking for a better deal. Let’s see what the numbers tell us.

Price-Related Keyword Traffic

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Traffic to top keywords for independent energy suppliers, Adthena data

Take a look at the graph above: it measures traffic that the top keywords channelled to independent energy providers. Apparently, there were two surges in search success – a moderate increase in July, and a more persistent leap leading into December.

The gas prices keyword generated a huge spike at the beginning of January, which is expected because gas prices jumped up at exactly this time. The leading independent suppliers for this period of time, bidding on the gas prices keyword were Sainsbury’s Energy and Co-operative Energy, which shows both supermarket chains were trying to attract their shopping customers by offering an alternative in the energy space too.

In July, This Is Money reported that the Government was urging big six companies to cut energy prices that remained high even as the recession abated, while The Daily Telegraph covered reports of large energy firms overcharging loyal customers.

In December the Daily Mail, one of the most popular UK media outlets on and offline, reported that the big six had fleeced millions of loyal customers out £100 or more. There’s a clear link here between coverage of the big six’s high prices and the traffic that independent suppliers were able to snag.

In terms of keywords, the star of the show is definitely gas prices, with 350 clicks on July 30th and more than 700 clicks on December 27th. Second place goes to gas and electricity prices, with 400 clicks on December 27th.

The independent firms are definitely angling for this traffic: spend on the keyword energy price comparisons increased by nearly 50% in June, for example.

Independent firms didn’t increase their spending quite as much in December, despite the fact that the traffic surge during that month was much higher than the one in July. This is partially due to the fact that interest in energy costs naturally increases during the cooler months.

As overall traffic was higher in December, firms should have spent that month increasing their spend or bid on longer-tail keywords to get a bigger slice of a bigger pie.

Compelling Ad Copy

The ad copy for independent suppliers trying to break into this market is some of the most compelling that we’ve seen.

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Independent energy supplier ads by keyword, Adthena

Take a look at the ad copy breakdown above: the Sainsbury’s ad promoting “gas prices” claims to beat the “big six.” This is just plain great strategy – it gets straight to the point and tells people, especially those disappointed with a big six deal, just what they want to hear.

Meanwhile, OVO’s ad leveraged the energy price comparisons keyword with ad copy (“Switch & You Could Save Up to £255”) that practically calls out the big six by name. Want to create great ad copy like this and beat out your competitors? Try Adthena’s ad copy analysis tool.

It looks a lot like customers really are heading to the search engines to find lower energy prices. With the media coverage continuing (and intensifying – the £100 figure the Daily Mail reported in July has since jumped to £234), this trend shows no signs of letting up. Leveraging this trend to its full potential makes it essential that you maintain a savvy competitive analysis, and that kind of insight can only come from Adthena.

(Main image credit: Steven Depolo/flickr)

About the author

Lorna Gill
Lorna Gill
Lorna is responsible for acquisition marketing at Adthena, communicating their award-winning product and generating demand. She has developed her career in fast-paced, start-up environments, including two tech track 100 companies and is passionate about translating technical information into stories that excite and delight.