Elon Musk now reckons advertising is ‘awesome’. So why has he flipped?
Elon Musk has supposedly given in to advertising, signaling this week Tesla will turn to it for the first time.
Musk set about a path of alienating his main income source at Twitter immediately after taking the reins last year.
“I hate advertising,” said Musk in 2019, when asked about Tesla’s marketing presence. Though as the buy-out cogs were turning in October, Musk was forced into sending a love letter to the company’s ad clients.
I hate advertising
— Elon Musk (@elonmusk) October 28, 2019
“I also very much believe that advertising, when done right, can delight, entertain and inform you,” he said at the time.
“For this to be true, it is essential to show Twitter users advertising that is as relevant as possible to their needs.”
It seemed his plea didn’t work entirely, as advertisers have turned away, seeing his local MD assuring Australian agencies in January that it was in fact still present in the local market.
So, has Twitter proved to users its ads are as relevant as possible to their needs? It has indeed! How else would I have found out about the health benefits of eating organ meats this morning as I scrolled through the app?
That is the kind of advertising that ticks Musk’s boxes of ‘delight, entertain and inform’.
This week, he doubled down on a Tesla shareholder meeting, announcing that for the first time, his electric vehicle brand will be turning its hand to advertising.
Again he made his point by stating how dependent his social media company is on advertising: “So, here I am, never used advertising really before, and now have a company that’s highly dependent on advertising.”
Musk continued: “So, I guess I should say advertising is awesome, everyone should do it. We’ll try a little advertising and see how it goes.”
He also added that by dabbling in advertising, consumers might learn a little more about Tesla’s lesser-known features.
What the hell did he think advertising was for beforehand?
Can’t this thing just keep selling itself?
Twitter is on the back foot, and has been since Musk’s arrival and his mega-culling of staff, including its top brass. And now Tesla is facing a major challenge on its home turf, as competitor car manufacturers bring more affordable options to market, also offering consumers the option to avoid padding Musk’s bottom line.
But if you look a little closer, you’ll see this isn’t actually his first venture into buying ads.
Musk’s satellite business, Starlink has engaged in some aggressive advertising for the past year in Australia, as you might have seen quite prominently walking through Australia’s airports.
Starlink, which is owned by SpaceX, purchased a reported $250,000 ad package with Twitter after the company commenced a gradual rollout in 2020 in Australia.
Musk later confirmed that SpaceX bought a “tiny” ad package in Australia and Spain, in order to test the effectiveness of the platform’s advertising. He also said he did the same on other platforms, including Facebook, Instagram and Google.
SpaceX Starlink bought a tiny – not large – ad package to test effectiveness of Twitter advertising in Australia & Spain. Did same for FB/Insta/Google.
— Elon Musk (@elonmusk) November 14, 2022
When some of the biggest brands in the world including General Motors, Mondelez and Volkswagen pause their advertising, it helps to have a couple of brands of your own to start spending.
So why is he turning to ads now for Tesla?
EV sales in Australia have tripled in the first four months of 2023 compared to last year, with CarExpert also reporting EVs now have a market share of eight per cent in total.
In April, the Tesla Model Y came in as the fourth most-purchased vehicle, while its Model 3 was 10th. New entrant into the market, BYD with its Atto 3, was 15th, which could be a reason Musk is looking for a different approach.
The Chinese-owned EV producer offers the Atto 3 at a starting price of $48,000, a far cheaper option to the Tesla Model Y, which starts around the $80,000 mark, though the company has cut the price of its Model 3 recently, bringing its entry-level product down to $61,000 before on-road costs.
In the ‘passenger’ vehicle category, EVs have grown to a 16 per cent share in total, with further competitors in Polestar, BMW, and Hyundai offering increasingly compelling options for consumers.
BMW, Hyundai, and Polestar all share a strong marketing presence in Australia and worldwide, with the first two increasingly focusing on electric options through communications. BYD’s local distributor, EVDirect has even appointed former Holden CMO, Mark Harland as its local chief operating officer.
Is Musk seeing sense through his Twitter disaster? Or is the competition starting to make him sweat?
Got a tip?
Calum Jaspan was news editor at Mumbrella, based in Melbourne. He was also the producer and host of the Mumbrellacast. He left Mumbrella in May 2023.
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