On the morning of May 18th, it was reported that Tesla CEO Elon Musk revealed that he will use traditional advertising methods to promote Tesla cars for the first time. In other words, viewers will have the opportunity to see the company’s Model Y and upcoming Cybertruck pickup truck in TV or online ads, and may even see Musk himself.
Elon Musk revealed this plan at Tesla’s annual shareholder meeting on Tuesday, which is a big change for the tech giant who recently acquired social media company Twitter. Musk has never used ads for many years, instead relying on the wide attention he attracts and the enthusiasm of Tesla users for the electric car company to achieve free publicity.
“We will try some advertising and see how it works,” Musk told investors in Austin, Texas. Tesla’s stock price rose 4.4% on Wednesday.
Musk expects macroeconomic pressure in the next year, and Tesla will not be immune. The electric car manufacturer has already lowered prices in major markets, indicating increasingly fierce competition, and Tesla cannot take growing demand for granted.
Regardless of what advertising path Musk chooses, advertising executives and investors expect them to clearly convey Tesla’s advantages in a unique and unconventional way, including technological advantages.
Tal Jacobson, who is about to become the CEO of advertising technology company Perion Network, said: “Tesla is not like other car companies, and Musk will not start now, so we look forward to Tesla conveying its disruptive technology and personalized charm through breakthrough creativity.”
When referring to Musk, Jacobson said, “He has the ability to amplify his brand and his company’s brand through the media, which is an art.”
Musk has not commented on this yet. But in an interview with the media on Tuesday, he envisioned using advertising to emphasize the characteristics, safety, and economy of Tesla cars. A Tesla spokesperson declined to comment further.
Musk previously told the media that he had not developed a “perfect strategy” for Tesla advertising. But he said that these ads should “convey product information” and be “pleasing aesthetically.” He added: “Some artistic elements should be added. You should not regret watching it.”
Although Tesla promotes information about this car through its Twitter account, Musk said that this method is “preaching to the converted, but cannot reach those who have not been convinced.”
Last year, Musk announced on Twitter that Tesla had a valuation of $1 trillion and would not do any advertising for a penny.
Futuristic advertising
Some industry executives speculate whether Musk will try to produce unforgettable TV ads, just like Apple’s famous “1984” Macintosh computer ad. The latter was directed by Ridley Scott and was only played during the Super Bowl. Many people say that this ad, which originated from George Orwell’s dystopian novel of the same name, paved the way for big-budget TV ads.
Bob Gruters, chief revenue officer of streaming platform Loop Media, said: “I don’t think Musk will craft brand images as carefully as Apple, but I think they will adopt minimalism and futuristic styles.”
Many people are curious whether Musk may even appear in the ad himself, but because the outside world has polarized opinions on this CEO, this method may carry risks.
“Is he an effective brand ambassador who can effectively promote the brand? I guess there are more reliable and appealing ways to convey brand advantages than simply using Musk as a spokesperson,” said Kimberly Whitler, a professor at the University of Virginia’s School of Business.
Vivek Astvansh, an assistant professor of advertising at the Indiana University School of Business, said that although Musk did not disclose the marketing budget, Tesla could be seen as an important customer of top advertising companies.
WPP, Omnicom, Publicis, and Dentsu, the top four advertising companies, have not commented on this.
Advertising intelligence company Vivvix stated that Tesla spent $151,947 on advertising in the United States in 2022. In comparison, Ford and Toyota spent $370 million and $1.1 billion on advertising, respectively, and General Motors’ brands spent a total of $1.35 billion on advertising in the United States last year.
Regulatory documents show that General Motors’ global advertising and promotion spending reached $4 billion, and Ford’s advertising spending was $2.2 billion.
Associated with Twitter?
Writer and venture capitalist Claire Diaz-Ortiz believes that Musk’s “new passion for advertising” is not surprising because he acquired Twitter last fall. Diaz-Ortiz held a management position at Twitter and has also written a book about the social media company.
Musk recently appointed Linda Yaccarino, a former NBC Universal advertising executive, as Twitter’s new CEO.
Whitler at the University of Virginia said: “It is difficult for Musk to have a company that needs to rely on advertising fees to survive, while at the same time denigrating the value of advertising as a manufacturing company CEO.”
Thomas Martin, senior portfolio manager at Tesla shareholder Globalt Investments, believes that Musk’s embrace of advertising is a positive sign. He expects the company to demonstrate the differences between its products and competitors. “They will obviously focus on environmental protection and emphasize that this is the car of the future, not your father’s old car,” he said.
