The difficult art of marketing ‘Big Oil’

Given the historical and perhaps customary negativity surrounding oil and gas majors in the best of times, working on their marketing pitches and brand equity enhancement is not for the faint hearted.

Environmental disasters and subsequent public relations fiascos in wake of incidents such as Exxon Valdez and BP’s Gulf of Mexico oil spill have only reinforced negative perceptions about ‘Big Oil’ in the minds of many. 

It all dates way back to Standard Oil, a company often castigated for its practices in the last century, writes Mark Robinson, professor of marketing at Virginia International University, in his recent work Marketing Big Oil published by Palgrave Pivot.

With pitfalls aplenty for oil and gas marketing professionals, the author has attempted to offer guidance on the arduous task by going well beyond the mundane 'do’s' and 'don’ts' in a book of just under 160 pages, split into five parts and 17 splendidly sequenced chapters. As it happens, Robinson knows more than a thing or two about marketing Big Oil, having been an industry executive at Deloitte’s Global Energy & Resources Group and ExxonMobil.

His book provides adequate subjective treatment, lessons from history and what approaches to adopt if marketing Big Oil is what you do or intend to do. Starting with the historical context provided by Standard Oil, the author leads readers on to present day challenges faced by oil and gas companies as we’ve come to know them.

The Oilholic really liked Robinson’s no holds barred analysis of marketing and branding exercises undertaken by industry participants and his detailed examination of what worked and what tanked given the millions that were spent. The author says throwing money at a campaign is no guarantor of success as many companies within the sector have found out to their cost.

Managing pitfalls forms an integral part of Robinson’s message; just ask BP with its ‘Beyond Petroleum’ slogan. Perceived disconnect between the slogan, what the company was up to, and subsequent events made it sound farcical. The saga, what went wrong with the campaign and lessons in its wake are described in some detail by the author.

Additionally, a part of the book is dedicated to managing a brand crisis. The entire text is well referenced and accompanied by 14 brand lessons treating various crucial marketing facets. Analysis of the industry's use of social media, e-commerce, mobile apps and digital advertising is fascinating too.

Overall, Robinson’s engaging and timely book on a complex marketing arena brings forth some 'crude' home truths, backed up by historical context and lessons from the corporate world, all weaved into a balanced industry perspective on the state of affairs in a digitally savvy world.

Budding marketing professionals as well as industry veterans, and those interested in how some of world’s biggest oil and gas companies succeed (or fail) in etching their global brand equity would find this book to be a thoroughly good read.

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© Gaurav Sharma 2014. Photo: Front Cover – Marketing Big Oil: Brand Lessons from the World's Largest Companies © Palgrave Macmillan, July 2014.

Splendid dossier on a secretive "supermajor"

In 1999, the merger of Exxon and Mobil created what could be described as an oil & gas industry behemoth and, using some financial metrics, perhaps also one of the most profitable among the international “supermajors”. Despite being a global entity, for many people ExxonMobil remains an enigma.

 

Its sheer presence on the world stage has its admirers yet critics have labelled it as a polluter, a climate-change denier, a controversial lobbyist, a bully and more. For Pulitzer Prize winning author Steve Coll, there is more to it than meets the eye when it comes to ExxonMobil and its financial performance which is more durable than others in the Fortune 500 list.

 

Minus generalisations or a linear exercise in big oil bashing, this latest work of Coll's – Private Empire: ExxonMobil and American Power – is a pragmatic book about a global brand which, in the author’s words, became the "most hated"  oil company in America after the Exxon Valdez oil spill off the coast of Alaska in 1989.

 

That incident itself provides the starting point for a detailed narrative of just under 700 pages, split into two parts – The End of Easy Oil and The Risk Cycle – containing 28 chapters. Banking on his journalistic tenacity and detailed research work including over 400 interviews, declassified documents, legal and corporate records and much more, Coll has pencilled his unique description of this “Private Empire” and it does not disappoint.

 

ExxonMobil has its dogmas, fears, idiosyncrasies, pluses and minuses and the author delves into these based on anecdotal as well as observed evidence. From an obsession with safety post Exxon Valdez to the moving of its headquarters to Irving, Texas, from “the merger” to an insistence on R.O.C.E (Return on Capital Employed) – Coll has tackled it all.

 

The author opines that far from being an attention seeking ruthless corporate giant in bed with politicians, as popular conjecture would have you believe, ExxonMobil’s legendary lobbying in Washington DC was cleverly and aggressively targeted for maximum effect. While it shunned overt politicising of its presence and affairs, the company benefitted from new markets and global commerce that US military hegemony protected the world over. After all, when fighting a tight corner, ExxonMobil often called in a favour from power brokers on Capitol Hill.

 

While the whole book is a thoroughly good read, for the Oilholic, reading Coll’s description of ExxonMobil’s grapples with "resource nationalism" in developing markets (as its oil output in developed jurisdictions started declining) and its management (or otherwise) of operations in inhospitable countries, were the two most interesting passages.

 

From Aceh in Indonesia to the Niger Delta, from the Gulf of Guinea to Chad, ExxonMobil found itself in alien territory and conflicts it had not seen before. But it strategized, adopted, called in favours and more often than not emerged with a result in its favour; if not immediately, then over a period of time, writes Coll.

 

Every saga needs a cast of characters and this one is no exception. One individual and his portrayal by the author stand out. That’s Lee ("Iron Ass") Raymond, ExxonMobil’s inimitable boss from 1993 to 2005. With a doctorate in chemical engineering, boasting Dick Cheney among his friends and a history of denying climate change, Raymond was by all accounts a formidable character and Coll’s description of him does not disappoint. One mute criticism the Oilholic has is that its borderline gossip in parts but one supposes the gossip joins the dots in a weighty narrative.

 

In summation, this blogger found the book to be a definitive one on ExxonMobil and by default a glimpse into the wider ‘crude’ world, it’s wheeling and dealing. The Oilholic would be happy to recommend it to anyone interested in the oil business, its history, market dynamics and the geopolitical climate it is inextricably linked with.

 

Those interested in business, finance and economics would also enjoy this book as would the mainstream non-fiction reader in search of a riveting real world account. Finally, it would also be well worth the while of students of financial journalism to read and learn from Coll’s craft.

 

© Gaurav Sharma 2012. Photo: Front Cover – Private Empire: ExxonMobil and American Power © Allen Lane / Penguin Group UK.


To Drill or Not to Drill Mr. President?

One cannot but help feeling for President Barack Obama. As a candidate and Democrat nominee for the highest American office, Obama was often sceptical about offshore drilling. While his opponents were screaming “Drill Baby Drill,” the then young senator from Illinois was not convinced for his own reasons – some sound, others well – not all that sound.

As President, facing the ground realities and very real concerns about US energy security, Obama made the correct call on March 31 to permit offshore drilling off the US coastline. His opponents claimed the President was not going far enough. Some on his own side claimed he was pandering to the Republicans.

Sadly, before the dust could settle, on April 20th, an environmentally tragic oil spill in the Gulf of Mexico that followed an explosion on an offshore rig, complicated the scenario further. More so executives, from both - oil giant BP which commissioned the rig and Transocean, one of the world’s largest offshore drilling companies, and the rig's operator - did not acquit themselves well in front of American legislators by trying to shift the blame for the incident.

As both companies were trying their hardest to ensure that they do not endear themselves to the American public, the President summed up the emotions, “The American people could not have been impressed with that display, and I certainly wasn’t...There’s enough responsibility to go around, and all parties should be willing to accept it. That includes, by the way, the federal government.”

Trouble is, even though he says oil exploration and drilling must still be part of US energy strategy, the issue has become more political than ever. Following the spill, Obama announced a moratorium on new offshore drilling projects unless rigs have new safeguards to prevent another disaster.

Governor of California Arnold Schwarzenegger said the accident had caused him to drop his support for new offshore drilling in his state. "You turn on the television and see this enormous disaster. You say to yourself, 'Why would we want to take on that kind of risk?” he added.

Across the political divide politicians are asking the very same questions, albeit not for the same reasons. Let us take things into perspective. No one, not least the author of this blog, or people within or outside the oil world including BP (who may have to foot most if not all of the bill to clean up the mess), are suggesting for a moment that what has happened is not terrible and tragic in equal measure.

However, the spill will make it harder for America to follow an energy policy that could actually deliver long-term satisfaction. Some in political circles would try their best to pander to the voting public’s fears for their own gains. Here is a telling fact - before the latest oil spill began on April 20th; the last “big” oil platform leak in the US was 40 years ago. Exxon Valdez incident, though related, cannot be brought into the equation.

So, while any such incident is regrettable to say the least, the figure not only speaks for itself but also indicates that safety standards have improved markedly. However, the figure is something the politicians risk even raising, let alone rely upon to justify offshore drilling and the list does include the President. The oil spill, will be contained and hopefully soon, but US energy policy is currently in a mess and all at sea. Actually it could be both and that in itself is no laughing matter.

© Gaurav Sharma 2010. Photo Courtesy © The White House website