I get it, demand is so great that people wait months or years to get their Tesla, and their current demographic is only the very rich, but they are planning to launch an affordable model in a year or two, and isn’t brand awareness important to every company? Are they cash poor? I don’t remember seeing a Tesla ad on TV. Perhaps there is a good marketing reason why it doesn’t make sense for them to advertise.
If you are aware of their name and future plans, then they are advertising successfully. Companies like Tesla will use the media to get them into the public awareness without having to buy time. Think of all the news shows that want material - Tesla and others will provide it.
Since so many of us now record the shows we like and skip through the ads, I suspect that many businesses are thinking that they might not be a good investment anymore. This then makes me wonder about the future financing of TV.
Rich people don’t spend much time watching TV.
Super-Rich people don’t watch commercials.
What’s important to them now is that you know that they make a really fancy, high-end, high-performance sports car, since that’s what builds their image. And the marketing they’re doing right now is working admirably for that: In the past week on this board, for instance, I’ve twice seen “a Tesla set to Ludicrous Mode” as a metaphor for extreme speed.
In a few years when they release their mass-market model, that’s when they’ll want the more conventional advertisements, to let the teeming millions know that now you too can own a Tesla.
They get plenty of free press and currently hold an almost mythical standing in public perception. Since Tesla has always been a cash-strapped company it doesn’t make sense to spend money when people are willing to line up for months or years to get their product. If anything, advertising would cheapen their image and destroy the mystery they’ve carefully built up.
Advertising is something used in competition. They’re currently hold a niche market. That will change in time and the need to advertise will follow.
probably because they don’t need to. they don’t have the production capacity to crank out tons of cars to sit on lots around the country.
FWIW, a lot of the TV ads you see for established brands are paid for by the regional dealer association, because they buy stocking inventory on “floorplan financing” (google it) and need to turn over cars and trucks as rapidly as possible.
Nobody’s going to watch an ad for a $100,000 car and say “Wow, that’s a great ad; I think I’ll pick one of those up next time I’m in town.”
I think there are Lexus LS ads on TV every now and then, which have the exact same price tag as a Model S.
And if you watch the Sunday morning political talk shows, you’ll see ads from Boeing or a jet engine manufacturer or other companies making stuff you don’t buy casually.
That was exactly my point. Why doesn’t Tesla do some branding in anticipation of a product launch down the road. Sure they get mentioned in the news once in a while, but with their major investment in battery technology you’d think they would want everyone to know they are going to be the next big thing. The short answer, I suppose, is they don’t have to… at least not yet. Better to poor that money into R&D than “waste” it on TV ads.
In addition to not producing enough cars to meet demand, there are damn few places where you can even buy a Tesla – hell, there are something like 20 states where there isn’t a single dealer. National advertising is pointless when you don’t have national distribution.
You might see an ad for a Lexus LS, but the purpose of such an ad isn’t to get you to buy an LS, but to get you to buy one of Lexus’s more affordable cars. But Tesla doesn’t yet have a more affordable car.
I believe you can still buy a Tesla by the website and they will deliver it to you.
I expect they don’t expect the ROI to exceed their internal discount rate.
Of course, a big part of why normal car companies advertise so much is because there’s very little actual functional difference between one brand of car or another. The buying decision is always at least a bit irrational, and they’re hoping their barrage of ads will create an emotional response to their brand that will nudge consumers in their direction when it comes time for car shopping.
Teslas, on the other hand, are a very functionally different kind of car. While they are in a way competing with the likes of BMW and such, the consumer’s decision to buy a Tesla over a gas-powered car is going to mostly be about the practical differences between the two. If some other company starts making high-end electric cars, then you might start seeing commercials touting Tesla’s proud sporting heritage or whatever.
Here in the UK we have the Morgan Car Company. They have a small factory in a picturesque part of the country and they turn out around 1,300 (no, I didn’t miss a zero) hand made cars a year. They are family owned and the cars are not hugely expensive.
If you decide you want a new one, I understand that there is a three year waiting list. When they are ready to build it they will let you know and you can go and watch if you like. I don’t believe that they have advertised since the 60s.
i believe you meant "pool" or "pour" instead of poor.
Sure, but ultimately, that brand awareness is important to generate customers. If you already have more customers than you can supply, then spending money to get more of them isn’t a great investment.
But anyway, Tesla has incredible brand awareness, and they do it without spending a dime on television advertising. Elon Musk has to be in the top 10 best-known CEOs in the world. There are constant news stories about his exploits and ambitions. He’s launching rockets! He’s overhauling the entire energy transmission and storage paradigm! He’s releasing free plans for a future magic elevated vacuum train!
Other posters are correct that Tesla has few direct competitors. They really are doing something different than most car companies. The most heavily-advertised products are those that have the least to differentiate themselves from their competitors. Think about how many stupid insurance ads you see. That’s because, in most places, insurance is so tightly regulated that insurance companies can’t actually compete on the product. So they spend boatloads on advertising, but have nothing concrete to refer to except how long it takes to sign up or file a claim… two things that are basically meaningless when it comes to choosing insurance.
Also, slightly tongue in cheek, if you have to advertise on tv chances are good your product sucks in some way.
There are a lot of products that sell quite well that don’t have TV ads or feel the need to use them.
Nitpick: Morgan Motor Company.