Published on July 2, 2019 |
Fellow CleanTechnica author Barry AF recently wrote two passionate articles explaining his arguments for why Tesla should start advertising (see: Tesla should advertise and Tesla should advertise, del deux ). I totally disagree because I believe that traditional advertising is the last thing that Tesla is going to use its limited marketing budget.
To be clear, I do not say that Tesla should never advertise, only that it should not use traditional national television, radio and print advertising – and it should not advertise right now.
One of the things Elon Musk likes to talk about Tesla is that the company does not advertise. He apparently has a strong contempt for advertising, which according to Wikipedia can be traced to ancient civilizations . But despite Musk's personal aversion, there are real strategic reasons for not using Tesla's precious marketing budget on advertising.
However, it is important to clarify that while Tesla currently does not spend money on traditional national / nationwide or local / regional advertising, the company's success so far in most markets is driven by a variety of marketing and customer experience-oriented activities. These include test driving events and meetings, website content, public relations, social media, showrooms and galleries, the presence of charging stations, referral incentives, and email marketing.
The case against traditional mass advertising for electric vehicles
"Many manufacturers secretly question whether advertising really sells their product, but are vaguely afraid that their competitors can steal a march on them if they stopped."
– David Ogilvy (Source: Brainy Quote )
Advertising is a big business, and the automotive industry spends about $ 33.8 billion across 10 key countries, including $ 18 billion in the United States in 2018, according to . Zenith . Other key statistics:
- More than 50% of all automotive advertising expenses go to television – 54.5% in 2018 ( Zenith )
- Zenith forecasts the internet's share by Car Expenditure will rise to 25.6% by 2020
- The average cost of a leading car is $ 205 ( Lion Tree Group )
- Percentage of gross sales = 8 , 2% in 2018 by US car dealers ( NADA )
- New vehicle advertising spend retailed = $ 624 in 2018 by US car dealers ( NADA )
- 95% of vehicle buyers uses digital as a source of information, and twice as many people start their research online against a reseller. (19659025) Google Study )
What is important to understand about advertising is that what the channel is good at affects a consumer to buy a particular product or service that they are already interested in buy . It is also good to create brand awareness and preference.
I recently spoke at a Chief Marketing Officer (CMO) event at Kellogg School at Northwestern University and one of the professors shared the analysis he conducted on advertising efficiency for cars. What he uncovered through buyer research was that almost every consumer who clicks on an ad for a car and who then continues to buy that car, is already planning to buy a vehicle.
The implication is that most digital ads for cars drive a small percentage of incremental car purchases. Car ads do not motivate consumers to buy a car, but increase the likelihood that they will buy a car they were already planning to buy or consider.
"Advertising says to people:" Here is what we have. Here's what it will do for you. How to get it. & # 39; "
– Leo Burnett (Source: Brainy Quote)
Advertising in general is also not at the expense of educating consumers on new product categories. Advertising is generally a passive activity, and unless consumers have an existing one. interest in a product or product category, they are much less likely to engage in the ad.
George Levy of Car and Driver recently wrote the article " Why Get TV Ads Promote Electric Cars  "and rightly explained that:
" The other banker toward the "selling category" is that if you need to convince people to consider a particular type of vehicle, it will probably take a long time to convince them to do one actually buy. "
By using advertising to convince someone to buy an electric car instead of a gas powered car, the money will not be used well. Electrify America and Audi pursue an" educating mass "advertising approach, but They have deep pockets and can wait for sales to follow years later – Tesla needs buyers earlier. To educate car buyers on the benefits of electric cars, it's just more cost-effective marketing methods than advertising.
Consider an EV and researching the Jaguar I-PACE with an Audi e-tron or Tesla Model X ad will be much more successful, they are in the review phase and will be very interested and aware to understand the differences between these models.  Jaguar I-Pace Google search result page "width =" 570 "height =" 709 "srcset =" https: // cleantechnica.com/files/2019/06/Jaguar-I-Pace-Google-search-results-Loren -McDonald-570×709.png 570w, https: // cle antechnica.com/files/2019/06/Jaguar-I-Pace -Google Search Results-Loren-McDonald-241×300.png 241w, https://cleantechnica.com/files/2019/06/Jaguar-I-Pace -Google-search-results-Loren-McDonald-768×955.png 768w "sizes =" (maximum width: 570px) 100vw, 570px “/>
Why now is not the time for traditional advertising
This brings us back to Tesla and 6 reasons are now not the time for traditional advertising:
Traditional advertising is expensive: TV, radio and print advertising are very difficult effective on what is called reach. Want to reach 10 million US consumers at once? Then, a national television ad can make good sense and return an effective return because it can be the only way and most cost-effective way to reach such a large audience.
For many years, GoDaddy has spent a lot of money with in-your-face, political bug ads under the Super Bowl for its domain and hosting services. Derived from ad critics, and abusive to many, the ads basically put GoDaddy on the map for what is basically quite commoditized services. (I admit using GoDaddy to my own sites and domain services despite disdaining their previous ads. Despite my dislike for these ads, GoDaddy was busy a few years later, I started buying domains and needed a web hosting supplier.)
But there is an example of where advertising works – increasing brand awareness and buyer preference – not educating a new category or creating demand. I knew what I wanted but didn't previously have a high brand preference for any supplier – GoDaddy was top of mind.
Not the right stage of the market: Electric vehicles are still a new product category and in most Markets only purchased by innovators and early suppliers. (The few exceptions are markets such as Norway and the San Francisco Bay Area, where EV has already gone mainstream.)
In 2018, only 1.97% of new vehicle purchases in the US bought an EV. However, this percentage is actually inflated due to California having an EV share of 7.87% and expecting 46.8% of all US EV purchases. Elsewhere, 27 states in the United States had an EV purchase share in 2018 of less than 1%, and 43 states were less than 2%.
Attempting to reach less than 2% of the market means that most of your advertising dollars are wasted on consumers with little interest in electric cars.
EV buyers have already decided to go EV: Most buyers of electrical and electronic components have for several reasons already decided to purchase an EV over a gasoline vehicle. People rarely go into a Chevrolet or Nissan dealer who plans to buy a petrol car and drive away a few hours later in a bolt or blade.
As I wrote in " EVs requires consumers to consider new factors during their vehicle purchase process ," consumers need to know where to charge, be comfortable with potential site restrictions or concerns, perhaps install a home charger, accept potential charging times that are longer than gas / diesel tank start, be ok with spending more money in advance and other factors. EV buyers have a multi-step thought and decision process that they must review when considering an EV.
Consumers must be marketed very differently in different US markets: What will motivate anyone in West Virginia to buy an EV may be very different from anyone in Washington state. While there are probably many commonities among early adopters located in these very different markets, the messages of these potential buyers can actually highlight various features and benefits of electric vehicles.
This can only be done through highly targeted forms of marketing, such as search engine marketing, instant messaging, email marketing, similar ads on Facebook, and targeted display and retargeting ads.
Not enough supply: As many have pointed out in the comments of Barry A.F.'s two articles, at least for Model 3, enough units produce in scale, still Tesla's biggest challenge. Model S and X, on the other hand, could benefit from some extra marketing to increase sales, especially with many luxury wagons coming to the market. But Tesla's biggest competitor for S in particular is Model 3.
Other, more effective marketing methods: For the above and other reasons, only more cost-effective marketing methods for Tesla are selling more Model 3s, Ss and Xs. These include search engine optimization, content marketing, test driver events, social media, email marketing, and PR. Market training on electrical and electronic components is also best done through other non-advertising forms of marketing.
Marketing and Customer Experience Activities Tesla Should Focus on and Consider
The following is a look at what Tesla should continue to do, expand itself, and some ideas about potential new activities:
Events: The Top Two Ways To sell Tesla models is to get a prospective buyer to take a test drive and get prospects to talk to today's Tesla owners. The company has previously organized Tesla meetings and runs events and should expand these events.
I have personally attended a Tesla-sponsored meeting experience at the Half Moon Bay Ritz Carlton and Model 3 station events at Tesla's Palo Alto headquarters. We went on a Sunday last year for the latter event, and the test station rep told me that on Saturday before 1 in 10 people taking a test drive, bought a model 3 the same day. A 10% conversion rate is great!
Social Media / Twitter: With Elon Musk's mix of tweets on Tesla, SpaceX, The Boring Company and other topics, he defends his hates and Tesla shorts, with over 27 million fans on Twitter. Tesla talked about not only on Twitter, but on Facebook, LinkedIn and other channels. And then the press writes about many of its tweets, which means that a single tweet from Elon Musk could eventually reach 100s of millions of people worldwide through multiple channels.
@ Tesla The account currently has a non-scary 3.9 million followers, and a strong social media person has apparently been hired to manage the account. The difference in humor and commitment since this person's employment has been noticeable and should lead to greater visibility for the company.
Email Marketing: Tesla must continue to utilize email marketing to maintain potential customers who have shown interest. The company is currently using decent use of the channel, but does not appear to utilize offline and online behavior to distribute real-time and highly targeted emails.
But another site would be to create more of an educational email marketing program to attract and educate people who are potentially interested in EVs, but are still in a learning phase and not ready to buy an EV or a Tesla yet (and may not read CleanTechnica ).
Galleries and Showrooms: Stealing from the Apple Playbook, Tesla has opened an estimated 200 showrooms and galleries worldwide. Tesla announced plans earlier this year to cut these showrooms, which I think is a big mistake. These showrooms are often located in exclusive shopping malls, and perfectly fit the buyer demographically at these malls, and they hold the Tesla brand and image front and center with upscale shoppers.
This is often the first opportunity for consumers to sit in a Tesla and ask questions about the cars, charging, etc. Unlike a traditional dealer location and model, Tesla shows showrooms and attracts consumers who are not necessarily in the market for one. EV. Tesla showrooms is about building Tesla as an ambitious brand, which is the basis for the company's success.
Instead of cutting back on showrooms and galleries, Tesla should instead make greater use, thereby improving the return on these sites and the lease. The company could arrange seminar series at showrooms, provide tips and education on various EV topics. They can also invite speakers from utilities, charge installers, local EVs and clubs, and transform showrooms into educational centers that give consumers more comfort in making the leap of an electric vehicle.
Targeted Search Engine and Social Media Ads: Although I'm not for the Tesla budget on mass advertising techniques, there are some targeted approaches that are likely to make sense – especially in high EV bid markets. These include search engine ads that target search for competitive electric vehicle models and social media, look like ads. These latter ads target consumers who have the same demographic and psychographic characteristics as today's Tesla owners. These ads are highly likely to target consumers to consider an EV, and may be based on offline and online behaviors that are already of interest to Tesla.
Continue Building Out Tesla Supercharger and Destination Loader Network: While Tesla's two charging grids are primarily to provide easy access to charging for current owners, they also serve as highly effective "billboards" for the company. Their existence at wineries, exclusive hotels and resorts, along major highways, and in the mall and dealer parking places reminds potential and current buyers who own a Tesla, that you rarely need to worry about access to charging while out and about.
They also keep Tesla's brand in front of non-owners. And to that extent, Tesla should consider, where possible, increasing the brand in Supercharger locations. This may include digital signage showing real-time charging statistics and ads for Tesla. They can include an interactive digital kiosk where consumers can get information about Tesla products and plan test stations.
In the past year, I have taken two road trips from Northern California to Southern California and back nearly 900 miles – in our Tesla Model S 60 . The 60 has only 205 miles distance, which has meant at least 3 stops along education 5 to reach our goal.
Over the next few years, these charging networks will continue to be one of Tesla's biggest competitive advantages, and one of the reasons why EV buyers choose a Tesla over other brands. But Electrify America and EVgo (in the US) and Ionity (in Europe) are rapidly developing their fast-charging networks.
Tesla must continue to develop the Supercharger network to maintain a very genuine and visual leadership on the other networks. One key is to continue expanding the number of connections in key locations. Tesla already has a significant lead with an average of more than 9 connections per Quick Loader site, compared to 4.5 for Electrify America and 2.7 for EVgo. These large "charging stations" are highly visible and provide great branding and awareness for Tesla.
Secondly, I believe that Tesla will expand several super centers such as the Kettleman City site which has 40 fast chargers and a lounge with toilets and a coffee shop. They should locate them in much more visible and high-traffic positions and collaborate with a food service management operator to drive them, potentially for profit.
These places can also have separate parking for non-Tesla customers who can replenish food and drinks while looking at Tesla cars, battery storage systems and solar panels. These Supercharger super centers can act as visible showrooms and increase awareness and brand preference. These places can even include opportunities to test Teslas, or at least plan them.
PR: Tesla is a PR machine. Most companies have public relations teams and agencies that use hours and hours to create history ideas and positions, line items, infographics, studies, and other content they hope media and bloggers write about and cover. Tesla does not have this challenge.
There are several journalists on withdrawals like CNBC Bloomberg and others who cover Tesla either full or nearly full time. Then you have websites like CleanTechnica, InsideEVs, Electrek, Green Car Reports and dozens of others covering Tesla exhaustively.
But most of the coverage around Tesla is focused on the company itself, its products, or Elon Musk. Tesla should not invest in a content marketing team that produces content that the PR team can use to proactively raise awareness of EVs. Since about 40% of electrical appliances sold in the United States are Tesla models, wider awareness and education will benefit Tesla more than any other automaker.
Solar / Battery Storage : There are a number of studies pointing to the connection between consumers installing solar panels and then also buying or renting an electric car. My own recent regression analysis project that saw 29 factors affecting EV sales in the 50 US states and Washington, DC, found that the relationship between solar installations and EV households had the second highest correlation. Solar is mainly the gateway drug to consumers who buy EV.
While the Tesla solar industry has fallen recently, the company should aggressively target this market for existing SolarCity / Tesla Energy customers and those who have installed solar solutions. These customers understand the benefits of going green for both the community and their personal wallet, so buying EV will be a bit convincing.
Website Resource Center: In business-to-business (B2B) and high-quality product / service market, the development of content-based web site resource centers is a very successful method of driving traffic from search engines and converting visitors to email subscribers where you can continue to educate and nurture potential customers to customers.
Tesla currently has very little of this type of content on their website, and what its content is usually embedded in the buying or overweight phase rather than awareness and discovery. I stedet for at forbrukerne skal ende opp med konkurrent eller generelle EV- og automatsider for svar på EV-er, som markedsleder, bør Tesla eie dette emneområdet og bruke innkommende trafikk til å utvide sin e-postdatabase og oppmuntre disse utsiktene til kunder. (Redaktørens notat: Jeg motsetter denne ideen på personlige, egoistiske grunner – jeg tror at disse menneskene skal trekkes til CleanTechnica ikke Tesla.com.]
Nettsteder, podcaster og videoer: There are dozens of YouTube channels and podcasts devoted to Tesla or Tesla and EVs in general. Tesla should consider developing its own webinar and video series. These webinars could educate both current and prospective customers on topics such as charging best practices, how to use navigation to optimize for minimal charging time on trips, home charging installation tips, interviews with hosts and users of destination charging locations, factory tours, owner interviews, Tesla executive interviews, feature explorations, and more.
They could also explain how to take advantage of state and utility incentives, and could feature interviews with utility and energy executives to dispel myths about the grid. This series could explore issues around mi ning and minerals or the benefits of marrying solar, storage, and EVs. While the industry is already doing much of the above, the online traffic isn’t driving people directly to the Tesla website or gallery locations — which is a huge missed opportunity.
Product Features: While features such as Ludicrous Mode, Autopilot, the vehicles’ longer range and efficiency, overall performance, and other features are not actual marketing activities, they are constantly talked about on social media and written up in the press. In other words, Tesla’s product features are its best marketing tactic.
It is clear that Elon Musk and Tesla executives are keenly aware of this. Fun features such as the holiday lights and doors feature on the Model XSanta and sleigh on the Autopilot display, and recent video games featured on the center screen keep Tesla in the news and, most importantly, talked about and shared on social media.
But there are a number of more serious and innovative product-centric areas Tesla is focusing on and could add, including:
- Launch the first 400-mile range BEV, which will be a significant industry milestone (expected by the end of 2019).
- Wide rollout of V3 of Superchargers, which offer the quickest real-world charging speeds.
- Charging partnerships with retailers and hotels as well as food service operators.
- Tesla app features such as the ability to order food and have it delivered to your car while being charged. A bathroom finder. A smart feature that sends you a push notification or SMS message alerting you that you didn’t plug in your Tesla.
- An AI-based navigation feature that more accurately predicts necessary range needed to reach your destination, but also predicts when, where, and how long other drivers will charge and that routes you to the optimum Supercharger to avoid wait times and/or maximize charging speeds.
- Improved voice interaction and integration with smart speakers such as Amazon Alexa and Google Home.
The features and performance of Tesla models combined with the charging advantages of the Supercharger and Destination Charger networks remain the company’s most effective forms of marketing. Tesla needs to not just continue, but step up its innovation and market-leading features to ensure maximum awareness and demand generation. Forget fart apps, focus on real innovation.
Beyond the above marketing and customer experience activities, Tesla needs to step up its game in the following areas:
- Rebuilding trust with customers and employees.
- Improving quality and customer service.
- Making customer retention a top priority.
There are a lot of things Tesla can do to increase awareness of electric vehicles and drive demand for its own vehicles, but mass advertising should not be one of them — at least until EVs become mainstream.