Longtime opponent of advertising Elon Musk is considering running ads for Tesla, but not for an obvious reason.
In an interview, Musk said that Tesla might advertise to counter editorial bias: “Maybe we should advertise because the traditional media will not run negative pieces about automotive because automotive is one of the biggest if not the biggest advertisers in papers,” Musk said. "It’s safe to say that if they run a negative piece about General Motors next to a General Motors ad, General Motors marketing executives are going to call them up and ask: ‘Why did you do that? We will be spending nothing with your publication next year.’”
In its 18 years of existence, Tesla has never run ads. The company is an outlier in the auto industry. Auto companies spent $8.7 billion on advertising in 2021, a 15% increase over 2020, according to Borrell Associates. General Motors spent $3.3 billion on advertising in 2021, per Statista.
Of course, it’s not completely true to say Tesla does no advertising. In late 2021, Tesla struck a deal with Hertz to advertise that Teslas were available in Hertz’s fleet.
But Tesla’s rationale for not advertising makes some sense. According to InsideEVs, demand for Teslas is so strong that advertising would only potentially make delivery delays much longer.
Arguably, Musk’s notoriety acts as a halo for Tesla. He can make news with a tweet (and that will become even more of a possibility if he succeeds in buying Twitter), which he frequently does.
Musk’s alternative way of selling cars has had an impact on Jim Farley, Ford’s CEO. In an interview transcribed on Seeking Alpha, Farley recently said that “we’ve got to go to non-negotiated price. We’ve got to go to 100% online. There’s no inventory (at dealerships), it goes directly to the customer. And 100% remote pickup and delivery."
Farley continued that, “Our model is messed up. We spend $600 or $700 on the vehicle to promote it and we spend nothing post-warranty on the customer experience.” He also noted that big showpiece ads aren't a silver bullet: “If you ever see Ford Motor Co. doing a Super Bowl ad on our electric vehicles, sell the stock.”