Lost in translation. In the aftermath of the US presidential election, it has been difficult to change the subject, no matter where one looks, reads or watches. The political upheaval that is unfolding in the land of the free is palpable, fissiparous and oddly inchoate. Amidst this tectonic shift in campaign finance quarters was a piece of business news that was drowned in the hoopla. It was the announcement by Snapchat that its IPO could be priced on an alleged valuation of $25B. This stratospheric level recalls the earlier purchase of Linkedin by Microsoft far a staggering $26B. The election, Snapchat cap and Linkedin deal share common, surreptitious thread that can teach all industries a valuable lesson, especially those operating under public opprobrium. The lesson is simple enough: the message matters more than the substance. This is a profound lesson that the hydrocarbon industry must heed in earnest.
The delivery, not the media, is the message. The importance of mastering the message has long been understood by the political class. No campaign should ever allow itself to be defined by an opponent. Controlling the message, and hammering that message far and wide, is arrantly crucial to the success of an election. Candidate Trump masterfully embodied this ideal as vehicle of transformation into President-Elect. Twitter is utterly convinced of the merits of its business mantra. Linkedin managed to convinced Microsoft that it was worth more than 50% of a behemoth like General Motors (market cap: $50.85B as of 17 November 2016). Now, ask yourself this question: what do the likes of Scnapchat, Facebook, Twitter and their kin sell, exactly? What is their contribution to national economies? They sell digital ads, mostly, and contribute little in terms of employment, job multipliers and tax receipts. A glance at the table below tells the story.
Market cap ($B)
(17 Nov 2016)
|Exxon Mobil||355||268.9||75 300|
|General Motors||50.85||152||216 000|
Amazingly, despite their insignificant contributions to employment, these firms continue to be hailed as leaders of the new economy. They manage this feat because their message is carefully crafted to resonate with global audiences. The message is both inspirational and aspirational, notwithstanding the fact that, in the end, their wares and service offerings are superfluous at best, deleterious at worst. The message is glitz, it is irreverent and disruptive, it is unabashed, braggadocious and self-aggrandizing. And it works.
Black as the new green? When we contrast this delivery with that of the oil and gas industry, we cannot be but aghast at the inadequacy of the latter. The industry is vilified in the press, by governments, by GAR (green and renewable) activists, by politicians and by snowflakes of all ilk. Its response is always poised and measured, gliding above the fray, and wedded to facts and reality. Unfortunately, ours is an age of image first, of self-righteousness, of instant victimization.