6 Proven Digital Marketing Strategies for Oil and Gas Companies

There have been two massive shifts that have impacted the crude oil and natural gas industry.

• The rising demand for clean energy supply.
• The transition to an entirely digital world.

Interestingly, it is the second point that is helping to accelerate the first.

Thanks to new tools, such as AI and customer relationship management (CRM) software, many of these companies are better equipped to respond to changes in the energy supply and rebrand to meet changing demands.

While marketers have occupied a unique position within the hydrocarbon supply chain, the role of marketing communications has never been more important for companies looking to evolve in this sector.

In this article, we’ll explore the role that marketers have historically played in the oil and natural gas industry and how they will help shape the future of energy production as energy companies look to diversify their portfolios and rebrand their businesses.

Understanding The Oil And Gas Business Model

The hydrocarbon business model is traditionally divided into three parts:

• Upstream: Otherwise known as E&P (exploration and production) companies, these businesses are responsible for extracting crude oil and natural gas from the ground.
• Midstream: These businesses are responsible for transporting raw materials to refineries, where they can be made into their final form for sale.
• Downstream: These businesses consist of refineries and gas stations (crude oil) or residential/commercial distributors (natural gas) responsible for delivering hydrocarbons to their final customers.

It’s important to note that oil and natural gas companies rely on a diverse mix of end-stage customers to market their products to, including regional supplies (most prominent in heavily regulated states), individual refineries, distributors, and gas stations.

Before we explore the marketer’s role in this complex supply chain, I think it’s important to understand how external factors can impact the sale of hydrocarbon products and their supply chains.

Factors That Influence Hydrocarbon Markets

Location

Unlike crude oil, natural gas markets are highly regionalized, and the location of energy sources matters immensely when it comes to transporting (added cost) these materials and finding customers.

Similarly, crude oil typically flows to the nearest market because that is the one that tends to provide the highest value.

For marketers, factoring in these inputs is important when determining the best customers to reach with your messaging.

Pricing

Similarly, pricing has a massive impact on the return on investment (ROI) of any marketing strategy, whose profit is often measured on a margin-by-barrel basis.

There are also fundamental differences in spot vs. wholesale pricing, which influences the ROI of a sale.

Financial Markets

For the most part, we are only concerned with buying and selling physical hydrocarbon products.

However, it’s important to note that natural gas and crude oil trading over financial markets greatly influences the price of these products and their supply.

Cyclicality

The global interconnectedness of many energy products – which can be influenced by various inputs, such as war, bad weather, and OPEC (Organization of the Petroleum Exporting Countries) – makes the price and supply of hydrocarbons extremely volatile.

End-Stage Customer

Finally, the business model of the company you are marketing for greatly influences its strategy.

For example, some downstream refineries are solely invested in commercial sales to factories and power plants, while others are connected to a regional network of gas stations that rely on them for supply.

The Role Of Oil And Natural Gas Marketers

Oil and natural gas marketers – whether hired in-house or as an agency – play an important role in bolstering existing supplier networks and assisting in the digital transformation of these companies through the fourth industrial revolution.

As a middleman in a complex supply chain, marketers can offer lots of supporting roles to oil and natural gas companies, including:

• Sales and B2B Marketing: Finding new clients to support local cash flows to the business.
• Reputation Management: Helping energy companies rebrand for the future and increase their loyalty among distributors and individual consumers.
• Hiring: Promoting businesses to prospective employees who can help support and advance that business.

Ultimately, the primary role of marketers in the hydrocarbon supply chain is to ensure the sale and transportation of hydrocarbon products to their respective end-stage customers.

Marketers can use various strategies – which I will discuss in much more detail beneath – to foster the continuous growth and digital transformation of these companies, including:

• Ongoing customer…