Tesla CEO Elon Musk seems to spend part of every single day making sure we are exposed to the Tesla brand on our personal technology devices. Part and parcel of the company’s “no advertising, no dealership” policy, Tesla’s marketing strategy maximizes social media opportunities while posing solutions to real planetary problems. However, a prominent shareholder recently raised the question, Should Tesla advertise through traditional media? The discussion arose as a possible mechanism to broaden the company’s already devoted consumer audience.
The shareholder’s statement was provided for a vote at the upcoming Tesla annual meeting in July. The question, more specifically, is whether or not Tesla should join ranks with the world’s legacy automakers and incorporate traditional advertising channels into its marketing strategies.
What are the pros and cons to incorporating traditional media into the Tesla marketing mix?
James M. Danforth, a San Diego-based holder of 850 Tesla shares (worth $799,569.50 at the time of this article going to press), highlights the following points in his proposal that the company spend at least $50 per vehicle produced to advertise its products:
“Advertising can increase brand value, product awareness, and interest. Tesla ads can help mitigate and dilute substantial FUD (‘Fear, Uncertainty, Doubt’) and misinformation campaigns sponsored by competitors and detractors worldwide and steer the narrative more favorably.”
Should the all-electric car company that boasts the most loyal of all car customers take a chance on trying something
Tesla’s vision to accelerate the world’s transition to sustainable energy has never wavered, even when introducing new products and a new business model in an industry dominated by entrenched and backward thinking (largely successful — at least until recently). Musk has not eschewed advertising, per se — he is astutely aware of the genre’s capacity to produce results.
However, he asserts that the company should reinvest available cash into continuous product and service improvement instead of advertising. He argues the media landscape has dramatically changed over the past decade, with traditional media (e.g., newspapers and television) now supplanted by social media (e.g., blogs, online communities, interpersonal networks). He argues that social media communication and online engagement are positively related to Tesla sales volume.
As an example, profits of its new products within 6 months of being launched rose above competitors in the same period due to Tesla social media pre-release buzz that stimulates word-of-mouth excitement in retweets and likes.
Musk appeals to his 36 million Twitter followers and inspires a keen sense of consumer yearning. He has substantially increased public attention about electric mobility, and his positions on a slew of topics — sometimes spontaneous and occasionally controversial — garner the interest of journalists around the world, who reconceptualize and editorialize his opinions. And, yes, often those journalists publish in traditional media, so Musk participates in what cultural critic John Fiske calls “intertexuality” — a reframing of primary sources into secondary and tertiary compositions.
Of course, every social media activity carried out by Tesla/ Musk can have a positive or negative effect on the company’s reputation, and contentious acts can have an adverse effect on the corporate brand.
Why is Advertising So Important in Today’s Consumer World?
Advertising combines with and is a complement to other mediating factors, such as customer predispositions and personal influences. Advertising raises brand visibility and consumer awareness. Branding creates a symbol or design that identifies and differentiates a product from other products.
Tesla’s corporate branding and Musk’s personal branding are inextricably tied and cut across the organization’s services, products, employees, corporate culture, and social responsibility.
Take SpaceX, for example. Musk draws upon SpaceX stories to increase consumer appreciation for the Tesla brand. He loaded a Tesla aboard one mission and another time transported 2 astronauts to the Falcon 9 launch pad via Tesla Model Xs (one for each of them). Throughout countdowns, retrospectives of launches, and editorials, commentators discuss the viability of SpaceX travel beyond the International Space Station, the name “Elon Musk” is frequently uttered, and Tesla is intertwined with SpaceX as companion commercial successes.
How Embracing Metaphors & Other Language Devices is a Major Part of Tesla Advertising
Owning a Tesla, a luxurious electric car, is a major status symbol that signifies casual elegance, understated wealth, and action to reduce carbon emissions.
People want to listen to the Tesla CEO, as he is perceived by many people as a great visionary. When it comes to personifying Tesla for the world, the theater of Tesla Musk directs and stars in sometimes serves Tesla well and sometimes hurts the brand. Musk has single-handedly constructed a narrative of Tesla, which provides a dynamic allure that is extremely powerful (whether positive or negative), all without traditional media.
Does Tesla actually need advertising to go beyond that, or to supplement it?
The Tesla shareholder who asked “Should Tesla advertise in traditional media?” believes brand loyalty can be accentuated through a more even balance of traditional and social media channels. Research, however, may not back up this position, nor the desired result of higher Tesla sales. Galak at Carnegie Melon University argues in a classic paper that, while the effect of a single unit of traditional media activity has a larger sales impact than a single unit of social media activity, the greater frequency (and therefore volume) of social media activity results in it having a comparable effect to traditional media in the case of blogs, or a much larger effect in the case of online communities.
Overall, online social media — so interactive and conversational — drives sales and affirms the central and critical role played by non-traditional media.