Tesla’s advertising originally adhered to a non-traditional approach, focused on social media posts and company-sponsored media events. CEO Elon Musk mocked legacy automakers who spent profits on paid advertising. Instead, free media opportunities and internally-constructed blog posts and videos allowed the all-electric carmaker to position itself as the sole industry representative looking for solutions to real planetary problems.
Arguably, however, the effect of that winning approach has thinned over the last few years due to Musk’s mercurial. He’s interjected himself into politics (“Give people their freedom back!” he exclaimed as he objected to the Covid mask mandate), resorted to hyperbole (“A Tesla with 8 cameras, radar, sonar & always being alert can definitely be superhuman,” he insisted), or insulted workers (this week he called remote work “morally wrong” and said that the “laptop classes are living in la-la land”).
In fact, the bulk of Musk’s tweets have spurred great controversy. There was the “funding secured” faux pas. His accusatory “pedo guy” comment during the Thai soccer team cave rescue attempt is hard to forget. He sparred about the existential plight of Ukraine with its president, Volodymyr Zelenskiy, and ended up walking back his original argument, acquiescing to Ukraine’s right to independence.
Musk’s tweets have never been a secret, as the SEC acknowledged in its 2018 settlement press release about Tesla. As the years go on, however, it seems as if the company’s original insistence that it doesn’t really advertise, that it’s alternative approach to sharing information is emblematic of how it does cars differently than has ever been done before, has diminished.
Musk spent the first decade+ at Tesla uttering a “no advertising, no dealerships” mantra. His notorious tweeting aroused fan support and inspired customer enthusiasm for Tesla’s vehicles. That is, until the May 2023 Annual Shareholder Meeting. “We’ll try out a little advertising and see how it goes,” he announced to investors in Austin, Texas. Musk told CNBC following the meeting that he envisioned advertising that emphasized the features, safety, and affordability of Tesla vehicles, yet acknowledging he did not yet have a “fully formed strategy” for Tesla advertising.
He did describe how it should be “informative about a product,” “aesthetically pleasing,” and “have some artistic element to it. And it should be something that you don’t regret watching after it’s done.”
Tesla spent $151,947 on advertising in the US in 2022. Ford and Toyota Motor Corp. spent $370 million and $1.1 billion. General Motors Co. spent a total of $1.35 billion. GM last year spent $4 billion globally on advertising and promotions, according to US regulatory filings.
It is probably not coincidental that this advertising announcement coincided with another revelation last week in which Linda Yaccarino, the former head of advertising for NBCUniversal, was named Twitter’s new CEO. Not to be ousted entirely, Musk will continue on in charge of product, software, and systems operations at the social media network. Tesla’s first stop in its advertising run will be at Electrify Expo Long Beach — the first EV event that Tesla has participated in for years.
Why Would Tesla/Musk Decide to Switch Course and Attempt Traditional Advertising?
Let’s make a few logical guesses about why Tesla’s advertising is going traditional, shall we?
The company has been building inventory and cutting prices, which has compressed profit margins while helping to sustain slowing sales growth. Tesla needs to spur more growth.
Musk purchased Twitter, an ad-supported social media platform, in October 2022. Since then, he has seen firsthand the power of advertising to support some useful businesses and may be reluctantly accepting its necessity.
Twitter’s new CEO, Linda Yaccarino, knows advertising and may have pushed Musk to accept that advertising is necessary beyond social media posts to achieve fiscal balance.
While Tesla disseminates information about its vehicles via its Twitter account, Musk reinforced during the CNBC interview that Twitter is “preaching to the converted and not reaching people that are not already convinced.” Ads for the Model Y crossover or upcoming Cybertruck pickup could pique consumer interest in places where social media just doesn’t reach.
Musk’s social media impact has become a toxic combination of ego + negative impact. Twitter comments about Musk’s tweets variously are often dismissive, insulting, oppositional, and condescending. His tweets may no longer be producing the intended effect of promoting the all-electric car company in healthy ways.
Musk said during the annual meeting that Tesla is not immune to macroeconomic pressures which he foresees building over the next year. Reuters suggests that Tesla’s “tweaking of prices” in its major markets is symptomatic that its demand can no longer be taken for granted in the face of growing competition. Traditional advertising could be a mechanism to head off such pressures by building new consumer demand.
Some shareholders have been voicing dissatisfaction about the level of attention Musk is paying to the company. Maybe traditional advertising can better represent the impact he has behind the scenes.
Tesla’s advertising could help Musk to reimagine his public persona. Professional image still matters, and depicting Musk as a credible US authority in the auto industry could diffuse some of the controversies that have plagued him over the past few years.
Turning to traditional advertising is a type of rebranding. It would allow new opportunities for Tesla’s mission, vision, and values to be disseminated. It might even reduce Musk as a perpetual symbol of the company.
Final Thoughts about Tesla’s Advertising
It’s time for some changes in attitude at Tesla.
Another company shift took place at the May meeting. Perhaps to pacify unrest, Tesla agreed to have an independent analysis describing if and how Tesla plans to eradicate child labor and forced labor from its automotive supply chain by 2025. Proposed by As You Sow in conjunction with Investor Associates for Social Justice, the advocacy groups want Tesla to introduce more supply chain transparency. “We will do a third party audit,” Musk acquiesced.
Then again, failing to learn much about the negative impact his tweets have on Tesla stock, Musk this week was highly criticized as a result of a tweet he sent out connecting George Soros and a recent mass shooting event in Allen, Texas. Instead of humility, Musk insisted on CNBC, “I’ll say what I want, and if the consequence of that is losing money, so be it.” That Musk tweet about George Soros lent credence to conspiracies — again.
As I was pouring my sustainably sourced organic chocolate java mint frappucino into my reusable cup in the CleanTechnica break room, I thought I overheard some of my colleagues mutter that Musk’s meandering into the world of advertising was little more than a way to prop up Twitter. Following Musk’s takeover of the social media platform, advertisers left in droves, with concerns about the hate speech escalation, dismay over the company’s dismissal of a whole lot of ad and safety teams, and general ennui about the platform’s future with Musk at the helm. The announcement about Tesla’s advertising could be little more than a soft opening to a pattern of little more than Tesla buying ads from Twitter.
If that prophesy becomes real, then Tesla’s advertising won’t be a new direction at all: it will be little more than Tesla shareholders propping up Musk’s poor decision to purchase Twitter. If so, shareholders are going to be pissed.
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