Marketing News:
In a surprising shift from his longstanding anti-advertising stance, Elon Musk, CEO of Tesla Inc (TSLA.O), announced on Tuesday that the electric vehicle manufacturer would test the waters of traditional advertising. This change of strategy comes at a time when Tesla is looking to boost its market standing and customer appeal amidst increasing competition and an economic slowdown.
The announcement was made at Tesla’s annual shareholder meeting in Austin, Texas, where Musk, known for his unorthodox approach to promoting his products, commented on the irony of his current situation. As the CEO of Tesla, he had never used traditional advertising, yet as the new owner of Twitter, he finds himself in charge of a platform that is significantly reliant on ads for its operation. Furthermore, he recently hired advertising veteran Linda Yaccarino to steer the social media giant, which he acquired in October.
Reflecting on this paradox, Musk jokingly said, “So I guess I should say advertising is awesome, and everyone should do it. We’ll try out a little advertising and see how it goes.”
This strategic change aims to enhance investor faith in Tesla’s prospects. Amid the backdrop of a sluggish economy and rising rivals, Tesla has been compelled to reduce prices. The situation is further complicated by recent events at Twitter. Following Musk’s acquisition of the social media platform, Twitter faced a mass exodus of advertisers who feared their ads could be displayed alongside unsuitable content, a consequence of the platform losing nearly 80% of its staff.
Musk’s distaste for advertising is well-documented. In 2019, he tweeted his antipathy towards advertising, declaring, “I hate advertising,” and added, “We use that money to make the product great.” However, he seemed to soften his stance at the recent meeting, acknowledging that many potential customers remain unaware of the affordable pricing and remarkable features and functionality of Tesla cars.
The decision to experiment with traditional advertising signifies a notable change in Tesla’s marketing approach, which has relied primarily on word-of-mouth, social media buzz, and the media attention that invariably follows Musk’s actions. How this advertising trial will impact Tesla’s brand awareness and sales, and whether it will continue as a long-term strategy, remains to be seen.
