Need for Tesla Advertising / PR

[Buckminster]

https://twitter.com/x/status/1646945984138604544

 

[Buckminster]

https://twitter.com/x/status/1647259147128172545

 

[Buckminster]

What is the best <2min Tesla video that could do some damage if it went viral on TikTok and Instagram?

 

[Buckminster]

We are beyond the chasm in Norway but in the US?

When do Tesla start advertising on this curve?

 

[Buckminster]

https://twitter.com/x/status/1648664002912829443

 

[golferguy]

And more price drops today by Tesla. M3's down $2K, MY's down $3K.

The money off the top that they forego could easily fund a small advert campaign. Would be an interesting market test.

 

[Hiline]

And more price drops today by Tesla. M3's down $2K, MY's down $3K.

The money off the top that they forego could easily fund a small advert campaign. Would be an interesting market test.

If Tesla ever does advertising, it'd start this year. It's quite clear that the planned production volume is already exceeding demand by a fair amount. There's a limit to how much price cutting can do, and Tesla needs to clear their inventory fast. The recent price cuts will make potential customers very hesitant to take delivery for the next several months.

 

[Buckminster]

Possible plan:

• Hire advertising team now to prepare for end of the year
• 1st December - Elon tweets that a run of 10 TV adverts will air on the 20th December at 9pm on Fox and NBC (each advert shown once only)
• 19th December - Tesla run adverts worldwide in the top printed newspapers telling them to look out for TV adverts
• 20th December - Adverts go live on TV plus Youtube, TikTok etc.
• 21st December - Elon retweets YouTube adverts followed by retweets from fanbase

Cost will be single digit millions I would guess.

 

[Buckminster]

https://twitter.com/x/status/1648723872144048128

 

[Buckminster]

1. Booking and going on a test drive
2. Ordering on-line, leasing
3. What's different when you pickup car - screen, no buttons
4. Superchargers, range
5. Charging at home
6. Impact on environment
7. Safety
8. Perfomance - faster than a Lambo
9. Servicing, little maintenance, rangers
10. Autopilot
11. FSD coming

Solar etc in future campaigns.

 

[Buckminster]

Spoiler: Mongo talks advertising, who do you want to buy a Tesla and where are they?

Yes, writing this could go badly for me, but it occurs to me that Tesla not advertising may address generalized complaints about Tesla in the past

Common talking points (real or imagined) :
Lack of charging
Lack of service centers/ availability
Lead time for car

Tesla has grown its service and delivery, but is still not at the location saturation of traditional OEMs, especially if you lump the major automakers in one group.
Tesla has grown its Supercharger locations, but they are still not as common as gas stations, especially if you lump all the brands together.
Tesla has increased its inventory, but not to level of traditional OEMs where the desired model, trim, and color combinations may be either on the lot or in the next town over.

My point? Tesla is better and continues to improve, but its still lumpy. There are places with better coverage of centers and chargers and areas with less. These areas also have something else... more Teslas. The inherent result of more cars is more people seeing the cars and checking out the cars and buying the cars.

Who doesn't see Teslas? People living where coverage isn't as good.

Who do you typically advertise to? People who don't know about your product.

See where I'm going here? Tesla and new owners are well served when volume and regionality track with infrastructure. Tesla is still sparse. Tesla advertising to the unaware could increase demand the most where experience is the worst (relatively speaking, I'm not claiming it's bad). Else, they advertise into a more saturated market increasing the load on the existing infrastructure.

Delivery and service locations:
View attachment 930796
Supercharging locations:
View attachment 930798
Then there is the buyer type. Transitioning from ICE to EV is a change. Better to have new owners who understand that versus unaware ones who get annoyed at the differences once they find them. In this, the opening of Superchargers to other brands is advertising to non Tesla EV owners who might choose Tesla as their next EV.
Supercharging open to others:
View attachment 930799

 

[Buckminster]

interesting thread on price cuts vs advertising...

https://twitter.com/x/status/1649897415426621457

Frustrating how this topic is so decisive .

Should Tesla do the traditional advertising of dumb auto commercials that I see during my NBA playoffs? The ones where there’s practically zero useful information in the add…..just tugging on stereotypes and feelings? Absolutely not. Would be a waste of time.

Should Tesla figure out how to educate the masses about how cheap their EV’s have gotten, how large their supercharger network is, etc..? Absolutely. And sorry to say but that’s going to require some form of traditional advertising.

We’re quickly approaching a price point for the 3/Y that put them at the ASP for their ICE counterpart segment. And I’m not talking about their luxury counterparts. A couple more price cuts and it becomes absolutely obvious that some form of educational advertising needs to happen to inform the masses.

This is only going to grow more obvious as Tesla grows in 2024 and 2025 and we’re talking 3-4 million a year. Yes the Cybertruck will be amazing advertising in itself once it ships. But the average consumer that’s looking at an Accord or a RAV4 needs to know just how much they would be saving on a 3/Y along with the other benefits of owning a Tesla. My family back East still repeat the typical stereotyping of Tesla including that their cars for rich people. Tesla’s gotta actually put in the work to change this.


Essentially put it this way. My parents only got their smartphone a few years ago. Like 17 years after the IPhone came out. It takes a long time for the masses to inform themselves on new technology. It seems to me that Tesla’s growth is simply outpacing the natural word of mouth/education growth for EV’s and for Tesla’s especially

 

[Buckminster]

1. Booking and going on a test drive
2. Ordering on-line, leasing
3. What's different when you pickup car - screen, no buttons
4. Superchargers, range
5. Charging at home
6. Impact on environment
7. Safety
8. Perfomance - faster than a Lambo
9. Servicing, little maintenance, rangers
10. Autopilot
11. FSD coming

Solar etc in future campaigns.

Need to split our 2, so critical in this environment.

1. Booking and going on a test drive
2. Ordering on-line, leasing
   1. Ordering on-line
   2. Leasing
   3. Loans
3. What's different when you pickup car - screen, no buttons
4. Superchargers, range
5. Charging at home
6. Impact on environment
7. Safety
8. Perfomance - faster than a Lambo
9. Servicing, little maintenance, rangers
10. Autopilot
11. FSD coming

Solar etc in future campaigns.

 

[Buckminster]

I wonder if Tesla ads would have a higher return than the industry average because Tesla vehicles are so differentiated from other offerings on the market.

I mean, if someone wants a truck there’s not much about an F-150 vs a Silverado 1500 that would be novel or surprising to present in an ad, but Tesla has lots of great unique features to present that most of the population doesn’t know about.

What do you think about a campaign to educate people about the advantages of Tesla EV ownership aimed at correcting the misconceptions and FUD (ie prices, TCO, range, convenience, etc), but simply sent out organically via Tesla's Twitter account (ie "free")?

Of course the decision is with Tesla, and that’s why there has been no advertising. We wouldn’t be discussing advertising if Tesla already did it. Today, Emmet Peppers (who used to be on TMC since 2012, and not active now) even created a GoFundMe for Tesla fans/investors so that people can pitch in and advertise for Tesla.

Link to vote -

https://twitter.com/x/status/1650389349882826752

Concerning advertising-seems like I read that GM alone spends somewhere on the order of $1500 per vehicle sold, just on marketing. Now, let me ask-if Tesla were to spend $1500 per vehicle, would you spend it there?

Or would you invest it in design/manufacturing improvements to reduce manufacturing costs and allow lower sales prices?

Or spend it to upgrade standard features that most cars in the price range of a 3/Y already have as standard. Things like vented seats, Homelink and a HUD (you could likely do all 3 for less than $1500).

Or maybe offer different paint or interior colors without jacking up the price?

Or build out the charging network even faster?


I think people already know about Teslas, and understand their technological advantages. But still question the price (you can still get a Rav-4, CRV or Equinox for a MSRP <$30k) and many that live outside of major metros still don't have DCFC anywhere near conveniently located. Until DCFCs are as common as gas pumps, that will be an issue for some buyers, and rightly so. The average user of this site likely has a far higher discretionary income than the average vehicle buyer-for a great many buyers, value is a major factor-what vehicle serves their needs for the lowest cost. They don't care about virtue signaling or climate change; they worry about basic transportation, putting food on the table and a roof over their heads. Advertising dollars don't change that. Now you can argue that there are a lot of people spending even more on high-end pickups and SUVs...but those aren't necessarily the same people buying compact CUVs and compact sedans.

I think the main mission-aligned reason to pay for promoting Tesla/EV education campaigns would be to reduce demand for ICEVs and influence general public opinion.

Convincing people to delay buying a new car until they can buy an EV that meets their needs and budget would accelerate the transition. It would put more pressure on legacy auto to move faster and stop fighting the inevitable. It also would influence public policy decisions around stuff like clean energy incentives and streamlining permitting for critical mines for nickel and other key raw materials.

However, this is still a decision that I’d defer to Tesla management on. They have surely been considering this question and have much, much more information than we do.

 

[Phil Seastrand]

I can't remember the last time I actually paid attention to ANY advertisement. I watch recorded shows and skip all the commercials. I don't read newspapers or magazines. Any adds that appear in my Twitter/FaceBook/whatever feed I quickly recognized as an add and skip over it without comprehending what they were advertising. I couldn't tell you the last add I remember.

I'm sure I'm not that unique, so I don't see any value in advertising in the traditional sense. Maybe I'm more unique than I think....

 

[Moon Buggy]

I can't remember the last time I actually paid attention to ANY advertisement. I watch recorded shows and skip all the commercials. I don't read newspapers or magazines. Any adds that appear in my Twitter/FaceBook/whatever feed I quickly recognized as an add and skip over it without comprehending what they were advertising. I couldn't tell you the last add I remember.

I'm sure I'm not that unique, so I don't see any value in advertising in the traditional sense. Maybe I'm more unique than I think....

There are a lot of people like you and a lot of people not like you, but we can be pretty sure that advertising works or companies wouldn't spend so much on it.

 

[Konicom04]

I visited a Caddilac dealer over the weekend and asked the sales person how was business. He went".. ehhh, we could use some business.."
From there I drove by my local Tesla dealer and couldn't even find a spot to park, lobby was packed with people.
Today, I keep reading opinions by financial experts stating it's time for Tesla to start advertising .

Had a pretty good laugh each time.
Tesla can't make enough cars, and strategically control the market with price floating. As odd as it sounds for a mainstream consumer, or investor - I think it's brilliant.
I also think it whips legacy automakers into shape

 

[Olle]

We are beyond the chasm in Norway but in the US?

When do Tesla start advertising on this curve?

That curve is great for consumer adoption of new tech that requires new consumer behavior, like cell phones did vs land lines for example, or Netflix streaming vs cable TV.

EVs is not an adoption from a consumer perspective though since we are still buying cars. It's more adoption on the production side. A cleaner, safer, more comfortable and powerful implementation of the cars we were already used to drive. More expensive to make still, that's a challenge.

I think it's incredibly obvious that it's a money problem, not an ad problem. If you walk through American towns, in front of the mansions there are 90% Teslas, while in the less well heeled parts there are just few, if any.

 

[Buckminster]

Major addition in bold:

1. Booking and going on a test drive
2. Ordering on-line, leasing
   1. No haggling - I think this is a huge benefit that is under appreciated
   2. Ordering on-line
   3. Leasing
   4. Loans
3. What's different when you pickup car - screen, no buttons
4. Superchargers, range
5. Charging at home
6. Impact on environment
7. Safety
8. Perfomance - faster than a Lambo
9. Servicing, little maintenance, rangers
10. Autopilot
11. FSD coming

Solar etc in future campaigns.

 

[Buckminster]

Tô be fair, it’s not blind allegiance. Going back to what became Zip2 Elon has consistently been far ahead of most of the Marketing world and vastly ahead of nearly all advertising mavens. From Zip2 to what became PayPal, then SpaceX, Tesla etc he has understood just how to appeal to sponsors, influencers, financiers, governments and other parties. Beginning with Zip2 he has understood how to use technology to optimize marketing outcomes.

The majority of dissenting posts I see here and elsewhere seem not to understand how deeply data driven Tesla’s seemingly arbitrary decisions have been.

As for ‘taking a guess and trying it’, Tesla has followed the scientific method. Which does require using all available data to make ‘the least bad decision’ then refining. They have been doing that, are now doing that and will do that. People who say they cannot know because they have not tried it simply have not been following events very closely.

Clue: look at the highest density areas for Tesla. Then check their business practices in those areas. Just to be explicitly check if Tesla referral results by postal code.

Depending on country, city and data restrictions there is limited widely public data, but with work there are clues. Some of us have some such data, although it is largely paywalled or NDA limited.

Please, everyone, do not assume Tesla is not doing a given thing just because you haven’t seen it, perceived it and your immediate contacts don’t know Tesla.

For further reference carefully examine all advertising expense for the most efficient non-Tesla OEM. Next check their Gross Margin, their growth rate and free cash flow. Next: check Tesla price movements from 2020 through 2023. Then think about it all.

Master Point: Tesla is, by far, the most data driven OEM on earth. Does anybody really think they are ignorant of the largest single sales expense categories for competitors? Lastly, think really hard about ALL the implications of a direct sales model.
Master Point #2: Please examine products and categories with insanely high brand value, high owner loyalty and tiny or zero conventional advertising : examples: Winnebago, Gulfstream, Dassault Falcon, Ferrari, Rolex (yes, print, look where). All of those and many others are deeply involved with buyers and prospects. Right, none are really mass market, not even Harley Davidson really is. However Callebout products are consumed by nearly all of us even though few of us know the name. These are characteristics of products that know their markets.
I could go on…just stop assuming Tesla are ignorant of their business.

To be really fair there is a giant industry that tries hard to promote different views:

Advertising, Marketing, Agency, Tech and Data News | Ad Age

Since 1930, Ad Age is your daily-must read covering the rapid changes taking place in media, retail, food and beverage, sports marketing, travel and more.

adage.com

Once looking at Ad Age a while; just realize the top three locations for paid promotion and online advertising (all advertising share)are:\
Amazon,
Google,
Facebook
Depending on geography, sometimes Alibaba, Baidu, WhatsApp, Twitter, YouTube and handful of others appear. In no major markets anywhere is TV any longer on top.
When thinking about that reality, also recognize that placements are often called advertising when they're placed by advertising agencies. The agency world is still thriving, albeit with large scale concentration.

The more precise the customer attraction and retention needs to be the less likely Advertising agencies are integral. The more deeply data driven the process is the more likely it will be internal. The bigger the budget the more likely Advertising agencies will be at the trough.
Never forget Elon was in precise targeting before most of the world knew it existed, and he's kept learning.

Simple - Tesla effectively only has models in TWO market segments to compete at the mid and low-end. The two segments they are in, they DOMINATE, no contest there.

CR-V, RAV4 have been hit hard by the Model Y, but technically are in a market segment below the Y on pricing. Not everyone will do the "Tesla Stretch" and push their budget, especially in hard economic times.

Per the last Quarterly Report, Tesla sits on 15 days average of inventory. That's less than 25% of the industry norm (60-90 days is norm).

You don't piss away money on advertising when you effectively have little inventory, and sell every car you produce. As production grows, it is normal and EXPECTED to have a little bit of inventory.



Plus, cutting prices increases your TAM, advertising does not. Elon has made it clear which direction Tesla is going to go. If you don't like it, I suggest cashing out your shares and finding a company that suits you better (good luck with that last part).

You don't seem to understand where this discussion is founded. Few people will change their perspective, you just don't grasp what the perspective of most of us is. Tesla's management is better informed than any of us here. They have a great track record of being extremely analytical about this sort of thing.

A couple pages back @Gigapress expressed my perspective and I suspect the perspective of most of us quite well.



The team in charge of Tesla are fundamentally the same exceedingly competent people who got us here. Very little about this situation has changed that opinion. They have massive amounts of data we lack, like the exact state of inventories, where things are in transit, what the actual order volume looks like when a price change happens, etc etc.

"Reception Will Flip". Not a bit. I trust Tesla management today. If they decide to start advertising in 6 months, it won't reduce that trust.

Tesla living in the media rent free. Should we even need to pay for advertisement?

Bloomberg - Are you a robot?

What worked for 0 to 1M may not work for 1M to 3M. The undeniable fact is that a Tesla is objectively better in almost every way, and is also affordable compared to what other vehicles are in Model 3 and Model Y categories. And yet, people choose the other inferior products. This is not an affordability problem. This is an awareness problem. You can do a simple experiment- go to a Toyota dealership, and ask why they are choosing to buy a Camry or a Prius or a RAV4 or a Highlander instead of a Tesla and listen to what answer they give you. There is a real awareness issue among most people - they don’t know a Tesla is affordable and they also don’t know how much superior a Tesla is.

Fact #1 - Elon said YEARS ago that someday Tesla would likely need to advertise. Yes, he did. Surprise. Your idea isn’t new.
Fact #2 - Elon said that that advertising was likely not to be considered conventional by definition.
Fact #3 - Not a single person here has a clue when that ‘should’ happen, unless Andrew you work at Tesla and you’ve been in on upper management meetings.
Fact #4 - If only everyone were half as clever as they think, the human race wouldn’t be in this self created mess we find ourselves.

And yet no one with too much liquid wealth around me buy Teslas but prefer "self-recharging" hybrids or ICE vehicles, even though they can easily be replaced with a S, X, Y or 3… only because <enter_dumb_antiev_argument>.

I live in Paris and most of my friends, family and colleagues don't know what to do with their cash except buy expensive houses with one, two or three PHEV or ICE.

They know (far too much) about Elon but very little about EVs and Tesla in particular. And our electricity is (quite) cheap and clean.

It's like Tesla keeps cutting prices to try and sell Teslas only to their fans, people who either

• already own a Tesla
• don't have the money to buy one
• or don't need a car (that's me)

So prices drop and those who already planned to buy Tesla an can afford a high price enjoy the discounts and thank Elon very much… while rich people who don't know about Tesla continue to see them as "not ready / gadgets / short in autonomy / difficult to charge / etc".

As a shareholder and proud bicycle owner, I can wait for ICE makers to finally stop buying ads, found pro-ICE car magazines (those that rich people continue to buy and read on holidays), car shows, and media, and sponsorship, and critics, and politicians, and everything about cars everywhere all the time… until no ICE is for sale and people have no choice but go inform themselves about EV and finally buy one.

Or maybe something can be done to help them switch, other than talk among EV fans.

Don't take it personally. Most people aren't interested in an intellectual discussion anyway. The bias towards contemporary positivity in this thread is very strong. Only a few people keep a cool head and try to stay in the middle.

There are 3 camps when it comes to the topic of advertising:

Camp 1: Never ads. People who believe Tesla should never advertise
Camp 2: Whatever Tesla does. People who believe in anything Tesla does at any given point; if Tesla is not advertising today, Tesla should not be advertising today, but if Tesla advertises tomorrow, then Tesla surely should be advertising tomorrow. They don't have, or don't share, independent thoughts
Camp 3: Try ads. People who believe Tesla should try, or probably will soon try, advertising and learn from the experience

I ignore anything coming out of Camp 2. For the sake of intellectual discourse and for my own learning, I'd like to hear arguments from people who actually have an argument to make. 'Have you ever started or run a billion-dollar company' does not count as an argument.

How Expensive is it to Buy a Tesla Now vs Pre-Covid?

January 2020

Tesla AWD Model Y List Price: $52000

Interest Rates: ~ 3.5%

Monthly Payment ($10k down): $764

April 2023

Tesla AWD Model Y List Price: $50000

Interest Rates: ~ 6.5%

Monthly Payment ($10k down): $782


Ignoring other factors for now, Tesla's most sold car is still more expensive than it was over 3 years ago.


Other factors:

Supply / Demand Curves: All else equal, as volume increases, prices needed to sustain demand should decrease. Tesla has increased production rate by a factor of 4 in 3 years, yet the affordability of the car has not gone down.

Wage Inflation: Average wages were up ~4%,4%, and 6% the last 3 years. Assuming white collar jobs matched these, raw purchasing power should have went up ~ 15% and so higher monthly payments should be tolerated.

Total Inflation: However total inflation has been even higher the past 2 years, while lower in 2020. Inflation obviously increases costs of other expenses reducing purchasing power for cars. I'd say this washes out wage inflation for now.

View attachment 931774




Summary

The economic factors presented to Tesla in 2023 should mean that prices should even be lower than they currently are. Monthly payments are actually higher than 3 years ago while supporting a much larger base of potential customers.

Costs also inflated but should see some alleviation later this year, unfortunately those lag price cuts.

Price cuts effect on demand are not instantaneous, we may not see most effects until later this year.

Thus, this is the worst period of time for financials. Prices may need to be cut again. Q1 or Q2 should be the worst of it. Peak FUD is now through rest of Q2 and probably Q3.

Conclusion

Tesla does not have a demand problem, in fact, I would argue it is up. (I am surprised by this finding)

Tesla does not have an advertising problem.

Tesla has a "the economy sucks and there's nothing we can do about it but be patient" problem.

Investors need to suck it up and be patient too.