Tesla to embrace advertising, Musk hints at unique approach
Elon Musk has announced plans for Tesla Inc to venture into traditional advertising, marking a significant shift for the electric vehicle (EV) manufacturer that has previously relied on its CEO’s star power and customer enthusiasm. Speaking at the company’s annual meeting, Musk stated that Tesla would “try out a little advertising and see how it goes.” The news led to a 4.4% increase in Tesla shares yesterday.
The 51 year old business magnate acknowledged that Tesla is not immune to the macroeconomic pressures expected in the coming year, and the company’s price adjustments in major markets suggest that it can no longer take ever-increasing demand for granted amidst growing competition. Advertising executives and investors predict that Tesla’s advertising approach will be unique and irreverent, emphasising the company’s technological advantages.
Tal Jacobson, the incoming CEO at advertising technology company Perion Network, commented on Musk’s media prowess, stating that “his ability to use the media to amplify his brand and his company’s brands is an art form.”
In an interview with CNBC, Musk suggested that Tesla’s advertising would focus on the features, safety, and affordability of its vehicles, and should be “informative about a product” and “aesthetically pleasing.”
Although Tesla currently disseminates information about its vehicles via its Twitter account, Musk believes this method is “preaching to the converted and not reaching people that are not already convinced.” Last year, he boasted on Twitter about the company’s “US$1 trillion valuation with US$0 advertising spend.”
Some industry insiders have speculated whether Musk might create a memorable TV ad, similar to Apple Inc’s iconic “1984” commercial for its Macintosh computer. Bob Gruters, Chief Revenue Officer at streaming platform Loop Media, suggested that Musk’s approach would likely be “minimalistic while futuristic.”
There is also speculation about whether Musk will feature himself in the ads, although this could be a risky move due to his polarising nature. Kimberly Whitler, a professor at the University of Virginia’s business school, questioned whether there might be a “less polarizing, more motivating and compelling way to communicate the brand’s benefits than using Musk as a spokesperson.”
While Musk did not reveal a marketing budget, Tesla’s advertising account would likely be viewed as high-profile by top advertising companies, according to Vivek Astvansh, Assistant Professor of Advertising at Indiana University’s business school, reports Channel News Asia.
In 2022, Tesla spent US$151,947 on advertising in the US, a fraction of the amounts spent by Ford (US$370 million), Toyota Motor Corp (US$1.1 billion), and General Motors Co (US$1.35 billion), according to data from advertising intelligence firm Vivvix.
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