Tesla Doesn't Advertise Because They Own Their Media
Updated: Oct 6
Elon doesn’t have to spend a penny on advertising, because he thinks like a media company.
If you check the news or watch CNBC every once in a while, you probably hear the name Tesla on a near daily basis. The company is on your TV, your social media feeds, in the news, in your teen’s memes, and constantly being discussed by financial analysts. Since launching in 2003, Tesla has become one of the major carmakers in the world. Based in Palo Alto, California, Tesla grew from an EV startup into a multi-billion dollar company run by Elon Musk. Note: Elon Musk joined the company in 2004 as a chairman and product architect to eventually become CEO in 2008. He was Tesla’s first angel investor. In 2020, Tesla surpassed Instagram to be the fastest-growing company in the world, growing 64.9% in that year. While the company's exponential growth can be attributed to its groundbreaking electric cars like the Model S, it can also be thanks to Elon’s unique marketing strategy. You may have heard from your local guru digital marketer that Tesla spends $0 on advertising while Hyundai, Lincoln, and Jaguar spend $1.5-2K on ads per vehicle sold. This is true.
Source: Tesmanian However, Tesla does spend money on marketing albeit significantly less than the competition. For example, in 2015 Tesla spent $58.3 million on marketing when competitors like BMW spent $196.6 million. Advertising vs. Marketing To clarify, advertising and marketing are not the same thing. According to the American Marketing Association marketing is “the process of identifying customer needs and determining how to best meet those needs.” In contrast, “advertising is the exercise of promoting a company and its products or services through paid channels.” Tesla has branding, content, and strong marketing channels. You will never see Tesla advertising on Facebook. This is an intentional strategy by Musk. Madison Avenue advertising and Superbowl Ads may sound glamorous, but it rarely shows tangible ROI in the short term. Smart founders like Musk waive promotion in favor of hiring talent, owning their own media, and product innovation. By 2015, Tesla was spending zero on advertising at a time GM was shelling out $5 billion, more than half their annual profit, according to Mediakix. More importantly, Tesla's market cap was higher than GM’s. For old-line marketers, this should have been a signal. How Elon Uses Viral Product Marketing What sometimes can be an overlooked part of marketing but is so crucial to the success of a campaign is the product. Having a compelling product that not only does what you tell your customers it will do but also exceeds their expectations will no doubt get people talking about your brand. Elon Musk has said time and time again that he is focused on creating innovative results over anything else. He uses his in-person experiences and events to show off his cars. These events, by design, not only present the innovative technology in Tesla cars but they are also used in Elons viral marketing strategy. Let’s break down how Elon used unveiling the new Tesla Cyber Truck in his viral strategy.
The event was jam-packed with flames, people in all-black costumes, and video comparisons of the Cybertruck with the speed of the Porsche 911 and the towing capabilities of the Ford F-150. One of the most viral moments, however, was the infamous failed glass demo which generated hundreds of millions of impressions online and hundreds of news headlines. Elon knows how many people want to see him fail. So he played right into that by “accidentally” breaking a window during the Cybertruck unveiling in front of thousands of people. Consider the average CPM in marketing is $10. If we say Elon generated, conservatively, 100M impressions from that event between social media and news publications, you would have to spend $10M in ads to hit 100M impressions. Product innovation and viral moments that get people talking on the internet is Elon’s strategy. Additionally, Elon owns his media attention through the use of his Twitter account. He has 59 million followers. Every one of his tweets receives a minimum 50,000 likes. Most of his tweets collect an average of 100,000 likes. These tweets are generating millions of impressions per tweet. Then, these tweets circulate into memes shared by millions or turned into headlines broadcasted by media companies. All for free. Tesla’s Twitter account also has 10.9M followers.
As a blogger wrote, “Tesla does not spend millions of dollars in a traditional ad campaign. They let us discuss it, rave about it, hate on it, or rejoice in the spirit of going electric in a Tesla, being the catalyst to a viral and brilliant marketing campaign. At the end of the day, Tesla advertising is free.” In 2018, Elon Musk created a global viral moment by launching his newly unveiled Tesla Roadster attached to a dummy payload on the second stage of a SpaceX Falcon Heavy Rocket. The car was driven by a mannequin named “Starman'' wearing a spacesuit. Elon was ridiculed, praised, hated on, or respected. But at the end of the day, everyone on earth connected to the internet was talking about both of his companies - SpaceX and Tesla.
Elon’s marketing strategy is focused solely on manipulating the media to collect earned media attention and creating his own media distribution channels. Elon meets the consumer directly where they are spending their time - on their phones. Elon knows the social status needs humans have and how that incentivizes them to share interesting things to their friends. Musk plays right into this by delivering viral moments to us so we can all rave about it on social media. Elon doesn’t have to spend a penny on advertising, because he thinks like a media company. ROCKET FUEL NEWSLETTER COMING SOON.
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