Tesla Advertising: It’s All About PR
Published on March 10, 2017, at 10:25 a.m.
by Josh Downey.
Tesla … Many have heard the name, but it’s not the famous inventor Nikola Tesla (1856-1943) whose patented AC induction motor helped bring electricity to homes throughout the world that this article features. Tesla is the Silicon Valley luxury automotive and technology company that is leading the way in electric automobile production. In addition to producing high class, electric automobiles, Tesla is also leading the way in home battery and solar roof tile advancements.
Tesla is run by a famous billionaire, Elon Musk. Musk is the CEO of both Tesla and SpaceX, a privately owned space exploration company. Musk also co-founded SolarCity, which Tesla recently acquired, and he co-founded PayPal. Musk is seen as a visionary and was ranked 21st on the list of most powerful people in the world by Forbes. Most of Tesla’s successes are attributed to Musk and his unique strategies.
Tesla takes a different approach to selling its products: it does not have a large advertising budget. According to a report from Global Equities Research, Tesla spends as little as $6 per vehicle on advertising. The next lowest spending company is Toyota, spending $248 per vehicle. Some companies, like Jaguar, spend a few thousand per car on advertising.
So how does a brand that spends so little on advertising book 400,000 reservations for its latest car model? The answer is public relations tactics like the use of owned media, earned media and a strong brand identity.
Robert Klara, senior editor at Ad Week, explained why Tesla does not need to pay for traditional advertising.
“Tesla doesn’t really have to use traditional advertising because it is unique and the brand perception is so strong,” Klara said. “Tesla doesn’t need to take out a national TV ad because its market is people who already know about Tesla.”
People already know about Tesla because it does a great job of using its owned media. For example, Tesla releases new information through Musk’s Twitter account. With over 7 million followers on his Twitter account, Musk’s tweets get retweeted by his loyal followers, which in turn creates a lot of buzz on social media.
Cameron Ramos, a SpaceX intern and original Tesla Model S owner, explained how Tesla’s social media works.
“Tesla is really effective on social media because there is a huge cult community that follows the company closely,” Ramos said. “They generate a lot of hype.”
The buzz generated on social media forces media outlets to pick up the story, and the owned media becomes earned media. The news outlets’ stories imply a third-party endorsement, which can mean a lot to viewers. People see the news outlets’ stories about Tesla, and the news stories generate more interest for the brand without so much as a dime spent on advertising by Tesla.
These tactics are different than the traditional automotive company because Tesla relies heavily on its famous CEO to make the company stand out, whereas traditional automotive companies rely on creative advertising to set them apart.
Klara likened the Tesla brand and Elon Musk to Apple and Steve Jobs.
“It’s like Apple and it’s overpriced as hell, but people are buying the feeling they get from buying the product,” Klara said. “I see a lot of similarities with Tesla. People feel like they are buying a part of the future like people did when they bought an Apple product under Steve Jobs.”
Tesla has a “cult” following the same way Apple does. Tesla is run more as a Silicon Valley technology company than a traditional car company, like its competitors, Ramos said.
The company already stands out from the rest, and it is able to take advantage of its famous CEO’s image to boost its brand image.
“Tesla is known because Musk is known. People know who Elon Musk is. He has a cachet to what he does and what he puts his name on,” Klara said. “Every time he opens his mouth he makes the news.”
