Tesla has become famous for many things over the years, but one of its biggest accomplishments is simply how it did so without having an extensive advertising budget. Something that seems like a given when you are starting a company, namely something that requires public acceptance such as a new car, is advertising. When was the last time you saw a TV commercial, website ad, or billboard pointing you towards a Tesla? Never, right? Yet Tesla’s marketing strategy has made them one of the fastest growing automakers in history. Everyone and their grandma now knows of Tesla and their loud-spoken CEO Elon Musk. So how was Tesla able to accomplish implanting themselves in the public’s psyche and do they even need to bother with traditional advertising?
Exactly how much money does Tesla spend on marketing an advertising? Well, in a traditional sense, none. Tesla’s marketing strategy comes in the form of a handful of unique practices to garner hype and recognition. The more eyes on your product, the better. Getting to that center stage doesn’t necessarily have to be done through traditional means like commercials and billboards, as Tesla has proven.
Having a couple of t-shirts or pens embossed with your car company’s emblem is nothing new, but recently Tesla has been taking their merchandising game to the next level. While Tesla has the standard assortment of appeal, mugs, and other accessories, some of their more recent merchandise has come out of left field and helps garner attention towards the company.
The *real* money comes from merchandising. I learned it from this documentary https://t.co/E4gpqhl6KF
— Elon Musk (@elonmusk) December 3, 2017
One of the recent examples was the Teslaquila, a Tesla-branded tequila. What initially looked like an April fool’s joke eventually materialized itself with Tesla partnering up with a tequila producer to sell a Tesla tequila in a very stylish lightning-bolt shaped bottle. I don’t really think I need to comment on the absurdity of a car company selling alcohol in a custom made bottle, but it clearly got people talking about the company.
Electrek’s article covering the release of that bottle received an absurd half a million views in its first day.
Another recent product was Tesla Short Shorts. Once again, what started as a joke on Twitter about Elon Musk wreaking havoc on short-sellers eventually turned into an actual product. The short red satin shorts with “S3XY’ written on the back were sold at the appropriate meme-price of $69.420. This once again got people talking about the company and the absolute tear that it had gone on in the stock market.
For those that aspire to own a Tesla but can’t afford one just yet, toy cars are available thanks to Tesla licensing out their cars and brand to Mattel. While an automaker licensing out their cars for toys isn’t new, not every brand gets a $400 1:10 limited edition R/C car.
We of course can’t forget about the Boring Company Not a Flamethrower, flamethrower. While it wasn’t Tesla-branded, it is closely enough related to Elon Musk that it still brought attention to the company, because well, it was (not) a flamethrower. Elon Musk has brought the same Tesla marketing strategy to just about all of his companies electing to minimalize spending.
While stuff like a tequila bottle or shorts can be seen as a primary income source for their respected and dedicated companies, Tesla uses these for simple marketing purposes. The limited run of shorts and tequila wont make as much as a dent in their profit (if they even profited after the accounting for all costs associated). So why bother? Because it gets people talking more than a billboard ever could.
Most traditional automakers tend to reveal their new models at auto shows, with 2020 being the exception. Regardless, anytime Tesla needed to unveil a new model or showcase a new technological leap, they hold their own event, unique from most.
Leading up to the event, the company sits in the news cycle as analysts and fans alike try to predict what will be shown at the next big event. With attendance given to Tesla owners and influencers, social feeds are clogged with each owner’s unique experience. Opening up the event to owners and shareholders is a good way to build up further brand loyalty and in turn have those same people exalt how great the company is.
Apple and Steve Jobs have, by most accounts, created the gold standard for what a company’s public-facing presentation should be like. While you knew generally what would be announced at an Apple event, you didn’t know what surprise Job’s would pull out during the close of the presentation. There’s a reason that “one more thing…” was such a cornerstone of Apple presentations. While Tesla doesn’t follow the same script entirely with it’s presentations, the magic of wondering what will we see at the event is still there. On top of events for new car releases, it seems that Tesla also wants to maintain at least one day a year where they go over their technological advancements. Two years ago we had Autonomy Day, last year we had Battery Day, and it seems like this year we may see an AI Day.
Let’s see what surprises we get this year.
Word of Mouth
There is no stronger form of advertisement than word of mouth. Merchandising and events both overlaps strongly with this point. Who wasn’t talking about the Not-A-Flamethrower when it first shipped? Who wasn’t talking about the Tesla tequila that was now reselling on eBay? Don’t even get me started on the news cycle after Tesla’s Cybertruck unveil. Franz breaking the “indestructible” window of the Cybertruck while Elon looked on not knowing what to do with himself was worth more for Tesla than any Super Bowl ad.
Tesla’s focus on word-of-mouth advertising is nothing new with the company using a referral system to their advantage for nearly a decade. Giving prizes to owners who received referrals incentivized them to openly talk about their vehicle purchase decisions. Being so different as an EV in an ICE world didn’t make opening a conversation too difficult. No one really talks about how much they enjoy their Toyota Camry.
The company focused some of their advertising goals into simply making a better product and experience. You’ll have to look hard for a Tesla owner who isn’t ecstatic about their ownership experience. Breaking norms in all corners of the auto sales world has created an abundance of happy customers.
Depending on your definition of commercials and advertising you might disagree with the sentiment that Tesla advertisements don’t exist. If you pop on over to the Tesla YouTube channel you will see that in the past few months Tesla has been releasing more videos than usual. These videos are all between 30-60 seconds long (one could say, a commercial length) showcasing individual features of the car.
Once again, depending on your definition of “advertising” or “commercial”, you may or may not consider these commercials. To our knowledge, Tesla’s advertising budget is still nonexistent as we have not seen these videos as an ad in YouTube videos or as commercials on TV. As such, we are hesitant to count these as advertisements. Still, it is the closest thing to a traditional commercial we have seen from Tesla’s marketing strategy, but yet they remain different from the usual car ad tone.
These videos toe the line between feature commercial and basic tutorials regarding the features they cover. Two of the videos that we appreciate have to do with charging at home and charging on the road, respectively. We have continued to maintain that misinformation even about the simplest of topics, like “Where can I charge a Tesla?” is one of the largest barriers to acceptance of electric cars. Rather than simple shots of Tesla’s going through roads with no substance, the videos at least try to bring attention to the viewer that there are an adequate amount of places to charge your Tesla. This allows owners to answer simple skepticism with quick links to specific clips in Tesla’s video library, only helping and promoting word-of-mouth advertising.
Quick, what’s the name of Volkswagen’s CEO? Toyota’s? BMW’s? I imagine that you probably couldn’t name them (and if you did, hat’s off to you, and here’s a gold star). But you know who Elon Musk is, and not simply because you are a fan of Tesla or EVs in general. According to friendorfollow, Elon Musk is the 33rd most followed person on Twitter with the only non-celebrity/athlete/company with more followers being Bill Gates and Barack Obama.
I can assure you Tesla has not delivered 42 million cars just yet. Simply put, Musk’s activity on Twitter does more than any traditional advertising ever could. He will share silly memes and respond to questions at random. Rather than a stiff corporate account ran by some PR company, we get straight to the source with a real, likable, human being.
There have been moments where I can imagine that Tesla wished Musk wasn’t so candid on Twitter, such as the infamous “going private at $420” tweet. But it’s all the same in regards to exposure. Musk makes an announcement, the news then shares. Shares a silly meme, the news once again shares. Says something he probably shouldn’t have, double news and shares. There is no CEO more well known to the general public and if you bothered to know who Elon Musk is then you probably know what a Tesla is at that point.
Social media in general plays a large part in Tesla’s marketing strategy. With a Tesla owners so content on their cars and seeking incentive through the referral program, a Tesla community is bound to be found on every platform. These groups of owners typically are very willing to talk about their experiences and spread any news that they have. Shoot, sometimes they’ll just make the commercials themselves.
Another big way Tesla has been able to get away from traditional advertising is their famously loud announcements. Tesla has not been sitting idle and it seems like at least every two months or so there is some sort of update whether it be a new model, new software update, or factory news, there is constantly something for the news to write about.
Given the high speed at which Tesla works and the multi-faceted nature of their business, it would be hard for a traditional automaker to be able to constantly be in the news cycle with new products or updates. Just look at the number of things yet to be finished/unveiled that Tesla can give an update on to get back in the news if they need to: Cybertruck, Roadster, Semi, ATV, possible S/X refresh, FSD update, general software update, Hardware 4.0, robotaxis, construction progress on Giga Shanghai, progress on Giga Berlin, Giga Texas, and the $25,000 car. That’s an overwhelming amount of future news and I am sure I still missed a couple of things.
When needed, Tesla can think ahead and unveil the simple idea of a future project. Nothing is more sharable than the forward looking statements regarding self-driving cars. The next-gen Roadster and Tesla Semi were both unveiled years ago for this reason. Sometimes these “unveils” never make it into fruition but still played their part in promoting Tesla.
Does Tesla Need a Traditional Advertisement Budget?
For the time being, it doesn’t seem likely. Tesla’s brand recognition has probably met the levels of Apple, Nike, and Ferrari. Anyone that is in a position to buy a Tesla, most likely knows what a Tesla is, and so it would seem silly that their brand recognition would go down in the next decades, requiring them to go ahead with traditional advertising.
However, there is a place for advertising campaigns aimed to educate people about electric cars. Sure, everyone knows of Tesla, but heaps are still misinformed on EV’s as a whole and refuse to even consider such a shift in lifestyle.
Previously, Electrify America had done an advertising campaign looking to tackle just that. While your dad might know what a Tesla is, he might not necessarily know that it has more than enough range or if the charges at home he will wake up with a full ‘tank’ every morning. That’s why we liked the Tesla videos regarding charging, it tackles an aspect that many people might still be unsure about.
Whether Tesla takes it upon themselves to educate the masses will be on them. But for a increase in brand recognition, I cannot imagine that Tesla will pursue traditional advertising means for that purpose unless something had gone catastrophically wrong with their demand.