Amid growing competition and weak stock performance, Tesla is shrugging off CEO Elon Musk’s previous disdain for marketing and pushing digital advertising in search of a much-needed sales boost.
The company spent approximately $6.4 million on digital advertising last year. Wall Street Journal reportedciting data from Vivvix, a subsidiary of ad tracking platform MediaRadar. The company’s marketing budget last year surpassed the $175,000 estimate Vivvix spent in 2022. Tesla spent 900 times more on U.S.-focused digital advertising in the first quarter compared with a year earlier, according to a report from analytics firm Sensor Tower. .
Tesla’s ad spending was largely focused on YouTube, but also included campaigns on Facebook, Instagram, Google and Musk-owned Platform X, according to a review of publicly available data, Sensor Tower reported.
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Many advertisements promote the company’s Model Y car, urging people to buy it before the April 1 price increase. Some tout Tesla features like Autopilot and extra cargo space, while others show families Using the touch screen for gaming or streaming video.
Musk and Tesla often reject traditional forms of promotion, instead relying on word of mouth, referral programs and the star power of their CEO to attract customers. Tesla’s CEO has previously said that money spent on advertising campaigns would be better spent elsewhere.
“Tesla does not advertise or pay for support. Instead, we use this money to make the product great,” he wrote in the message. mail on X, formerly Twitter, in 2019.
However, Tesla’s shares have fallen nearly 30% since January and increased competition from Chinese electric vehicle makers has recently forced Musk to open up to advertising. Answering a question at the AGM last year MaybeMusk said Tesla “[T]try some advertising and see what happens.”
The company’s advertising pullback comes as the first three months of the year wrap up and analysts brace for what could be a disappointing quarter for the electric vehicle maker. Some analysts have already lowered their estimates for first-quarter vehicle deliveries (estimated sales figures) after Bloomberg reported last week that Tesla was cutting production at its plant in China.
On Wednesday, Wedbush Securities cut its estimate to 425,968 from about 475,000, according to a report. Perennially bullish Wedbush analyst Dan Ives also cut his price target to $300 from $315, although the firm reiterated its outperform rating on the company.
A recent internal email to employees revealed that Musk is relying not only on digital advertising but also on aggressive promotion to boost sales of his $12,000-a-year “fully self-driving” subscription. In an internal email leaked this week, Musk said Tesla employees were required to provide potential customers with a quick trial while they picked up their cars.
“I know this will slow down the delivery process, but it is nonetheless a strict requirement,” he wrote in an internal email.