That’s why you don’t see Tesla ads on TV
Tesla is now one of the largest automakers in the world specializing in electric vehicles. Based in Palo Alto, California, Tesla has grown from an EV startup to a multi-billion dollar company led by Elon Musk. The company’s meteoric rise can be attributed to its groundbreaking electric cars such as the Model S, but also to its unique marketing strategy.
Unsurprisingly, large corporations, including the auto industry, are spending millions of dollars promoting their products, especially on traditional channels like television and print, and even targeting celebrities like Brie Larson. Because the more people know about their products, the more customers they can have. Of course, the effectiveness of the advertising depends on the reach, but the way in which the message is structured and conveyed is also an important factor.
However, Tesla defies tradition. Although it does not advertise its products through traditional channels, its sales have increased. This is significant for a company that relies on other channels to sell its Model S, Model X, Model Y, Roadster, and now Cybertruck.
How automakers advertise their vehicles
Auto companies spend billions of dollars promoting their new and existing products on television, radio, newspapers, magazines, billboards, and online campaigns. Some automakers would even invest in racing teams, take part in auto shows and use celebrities as brand ambassadors. They would also expand their reach by opening new dealers.
However, these are logical choices for automakers. With classic advertising, you can reach as many potential customers as possible. For example, an automaker would likely consider running an ad during the live broadcast of the Super Bowl. After all, more than 100 million people in the US watch the big game on their television screens or via online streaming. Aside from having a very long reach, the typically special Super Bowl commercials stay in the minds of viewers. To do this, a company would have to spend around $ 5.5 million on a 30-second Super Bowl advertisement.
Automakers also run paid advertising on major social platforms such as Facebook, YouTube, Instagram, and Twitter. In 2019, Ford spent 55 percent of its social media budget on Facebook, while Porsche distributed 47 percent of its social media budget on YouTube.
No need for traditional advertising
However, Tesla will not advertise any of its vehicles through traditional channels. Tesla has spent zero dollars on advertising in recent years. Tesla won’t even spend a single dollar on paid advertising on Facebook, YouTube, Instagram, and Twitter. Musk even said on Twitter that he hated advertising. In addition, the company currently has no PR department since October 2020, as it has not found a use for such a unit.
Tesla has essentially one of the most loyal fan bases in the automotive industry. Loyal customers have become a free advertising power, and fans are spreading their love for Tesla electric vehicles through word of mouth and even online videos. Thanks to the free excitement of its dedicated customers, Tesla is able to sell more electric vehicles every year.
Elon Musk as Tesla’s main advertising power
So far, Tesla’s foremost front line in promoting products has been Musk himself. He is considered the most outspoken, liveliest top honcho a company has ever had. Musk’s words – whether on Twitter or in interviews – are so heavy that they easily influence other people’s buying decisions, stock prices, and even cryptocurrency values.
Almost as effective as a Super Bowl advertisement, Musk could get its companies and products noticed, but not as costly. He has around 56.9 million followers on Twitter, a free social platform. While the Super Bowl only happens once a year, Musk can post to Twitter anytime, any day. Additionally, Musk is able to generate free coverage from the media treating him as both a news source and a celebrity.
The effort for zero advertising pays off
Tesla EV charging on superchargers
In the company’s latest annual report (10-K Securities and Exchange Commission filing), Tesla said it was able to generate sales without relying on traditional advertising and at a relatively low marketing cost. While other automakers are willing to pay millions of dollars for a Super Bowl ad slot, Tesla hasn’t bought any TV or print ads.
Tesla said its marketing, promotional and advertising costs were negligible for fiscal years 2020, 2019 and 2018. This is evidenced by the fact that Tesla produced 509,737 vehicles and delivered 499,647 vehicles in 2020 despite the COVID-19 pandemic. It is currently expanding production and capacity while introducing its next vehicles.
In 2020, Tesla had total sales of $ 31.54 billion, an increase of $ 6.96 billion from the previous year. Additionally, Tesla posted its first annual profit in 2020 with net income of $ 721 million attributable to stock shareholders. This is just some of the evidence that the company’s strategy of not relying on traditional advertising is paying off.
Source: US SEC, Elon Musk on Twitter, BrandTotal
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About the author
(1320 published articles)
Julybien Atadero writes from the island of Cebu on various automotive topics, including new sports cars, classic muscles, pickup trucks and SUVs. I like peace and quiet, but I love to play with my child. When I have nothing else to do, I watch documentaries and animations.
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