Just like other industries, the energy sector is experiencing supply chain bottlenecks.
Most of the attention is on the clean energy sector. The sector experienced tremendous growth last year—but faces challenges like cost-inefficiencies, fragmentation, and a lack of mature industrial partnerships.
As you and your sales reps enter advertising conversations with energy sector brands, it’ll be essential to know what’s going on in their world and what the most recent spending patterns have been.
Energy sector pressured to change, but responds slowly
Renewable energy saw the largest amount of growth in 2020 than it had since 1999 (a 45% jump in growth rate), but now faces significant headwinds with rising prices.
The price of steel, one of the key materials in solar panels and their racks, has tripled since last year. Freight costs, labor, and coal rates are also soaring—cutting into the overall bottom line.
Some developers in the US and Europe are responding by putting ‘soft holds’ on projects until prices come down. Other solar developers in China are increasing their overall prices to maintain margins.
Despite these challenges, the IEA says that clean energy is “expected to account for 90% of total global power capacity increases” over the next two years.
Much of this can be attributed to the growing governmental and public pressure on energy companies to pledge to an emission-free future. “Big Oil” companies are now discussing clean energy solutions in new ways and investing in renewable technology.
But it’s worth noting they’re still investing significantly more in new oil and gas than “green” alternatives.
Consulting firm Accenture recently surveyed 179 oil and gas companies to ask how they were approaching new energy sources. Muqsit Ashraf, head of global energy at the firm, says that companies are talking about reducing carbon and sustainability more than they have in the past, but “only a very small fraction of companies are truly thinking of a radical reinvention.”
The key takeaway here is that moving the traditional multi-billion dollar energy sector takes tremendous work. But it’s happening. Solar and wind are expanding rapidly—but oil companies are still largely holding onto traditional business practices at the same time.
As the energy industry navigates rising prices, potentially new legislation, and increasing public pressure to become cleaner, how’re energy companies spending on advertising?
In 2021 to date, there are 359 companies who have spent $4mm in print and digital advertising within the B2B energy industry. In the same period from 2020, there were 330 companies who spent $6.45 million.
There are more companies spending so far this year, but together their spending is down 38% YoY.
This drop in spend may be a result of the disruptions in the supply chains. With rising prices and without raw materials on hand, companies are waiting on projects until prices come down. They’re likely not trying to attract more business until processes and pricing smoothes out.
Another interesting note for print publications: Though the overall B2B field has seen a significant rise in digital spend since the beginning of the pandemic, the energy sector still places a large portion of their spend in print.
Across this sector, there was a 53% ($1.4mm) drop in digital spend between 2020 and 2021 (Jan – May). Print, on the other hand, only fell only 28% ($1mm).
To learn more about the data behind this article and what MediaRadar has to offer, visit https://mediaradar.com/.
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