Simplistic statements and superficial reasoning do not help evaluate sales and promotion strategy. Discussions of ‘advertising’ rarely consider all the subtleties of effective promotional strategy. Bluntly, Tesla uses the ‘holy grail of promotion’, Word of Mouth, in a 21st century manner through social media, customer referrals and highly effective promotion of NACS and Supercharger access that reach most of the entire BEV markets in NA and EU at negative cost. Can any other OEM do that? The list of such techniques grows.
Fundamentally conventional wide media advertising is ONLY effective when promoting universally used product classes, such as soap, personal care and generic food P&G, Nestle etc are obvious ones. For less universal ones the use of advertising reduces margins. Uninformed and self-serving people (advertising agencies and corporate beneficiaries) often use the infamous pair of metrics, ‘cost per reach’ and ‘unaided recall’ as proof of effectiveness. Frankly, statistics can be used to make these logical. Those are exacerbated by the auto dealers, whose attention span is limited to learning how to game OEM policies and close individual deals.
Tesla awareness is high, as is FUD from all those whose interests are harmed by the Tesla distribution system. All of us need to learn that the Tesla distribution system is vastly more efficient than is indirect sales. Similarly, we all need to understand that a frightening collateral effect of direct sakes is transparency in pricing. Nobody here blinks an eye when Mercedes-Benz or BMW gives dealer incentives and/or consumer rebates, subvened leases and loans, but scream loudly when Tesla reduces prices or gives referral perks . Both have similar effects on resale values, but superficial examination shows nothing for the others, but direct clarity fir Tesla.
Those who are frustrated and fearful about these things need to understand the fundamentals:
-Tesla cost per sale is a far below any dealer distribution model. Precise comparisons are difficult because apples to apples comparisons cannot be made due to accounting convention treatments. As a general rule the dealer model costs between 20 and 30 percent of retail sales, depending on country (that includes sales, F&I, warranty profit, service profit.). The equivalent for Tesla is around 15%.
FWIW, these generalizations are extracted from a comprehensive direct/indirect comparison made by my firm fir a major OEM that rued unsuccessfully to establish direct sakes for a new brand.
In short, nobody arguing for “advertising” to increase profitability or sales seems to understand 21st century marketing. More specifically, 21st century promotion including AÍ aided targeting. In this world nobody cares if non-prospects even recognize the name. In this world BEV adoption is similar to that of telephones, refrigerators, household electricity, cellular phones, automobiles , commercial airplane travel and all those other revolutionary products.
Just think about this. Model Y as the best selling car model in the world. Tesla still is barely scratching the surface of geographic markets, much less storage products. Adopting old-fashioned advertising is a horrible mistake! Tesla is humoring the enthusiasts who don’t understand, but they’ll not make stupid moves.
