Tesla is ignoring CEO Elon Musk's distaste for marketing and using digital ads to boost sales amid rising competition and a weak stock performance.
According to Vivvix, a MediaRadar subsidiary, the corporation spent $6.4 million on digital advertising last year, the Wall Street Journal said. Last year's marketing spend exceeded 2022's $175,000, according to Vivvix. Sensor Tower reports that Tesla spent 900 times more on U.S.-targeted digital advertising in the first quarter than a year ago.
Sensor Tower stated that Tesla spent most of its ad budget on YouTube, but also on Facebook, Instagram, Google, and Musk's X platform, according to publicly available data. Many advertising promote the Model Y, urging buyers to buy before prices rise on April 1. Some promote Tesla's Autopilot and cargo space, while others depict families playing games or streaming video on the touchscreen.
Instead of traditional advertising, Musk and Tesla use word-of-mouth, referral schemes, and his starpower to recruit buyers. Tesla CEO has argued publicity campaigns should be spent elsewhere. Tesla does not sponsor endorsements or advertise. Instead, we utilize that money to make the product great“, he wrote on X, formerly Twitter, in 2019.
Tesla shares have fallen about 30% since January, and Chinese EV manufactures are increasing rivalry, prompting Musk to advertise more. Musk replied at last year's annual shareholder meeting in May that Tesla will “[T]ry a little advertising and see how it goes.”
As the first quarter ends and analysts anticipate for a disappointing quarter for the EV maker, the business reversed its advertising strategy. After Bloomberg reported last week that Tesla was slowing output at its China plant, some analysts reduced their first-quarter vehicle delivery estimates.
In a note Wednesday, Wedbush Securities lowered its projection to 425,968 from 475,000. Wedbush analyst Dan Ives, who is always optimistic, lowered his price objective to $300 from $315 but maintained his “outperform” rating.
Musk is using digital advertising and aggressive promotion to boost sales of its $12,000 per year “full-self driving” subscription, according to a recent internal email. Musk claimed in a leaked internal email this week that Tesla staff must give potential customers a quick trial while picking up their automobiles.
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