Ford and Tesla say electric vehicles could sell themselves

Last week, a piece in Bloomberg told us that Ford seeks to do what Tesla does: not spend on advertising. Why? Because its EVs have already been exhausted for two years. With a second manufacturer considering ditching traditional advertising, it looks like EVs could sell themselves, or traditional advertising isn’t what it used to be.

Why Ford dropped electric vehicle advertising

At a recent conference call, Ford CEO Jim Farley told viewers that they already don’t advertise electric vehicles. They first announced the Mustang Mach-E, but it wasn’t long before all the vehicles the company could make for two years were completely sold out. With that kind of backlog, they had no logical reason to spend more on advertising. Then when the F-150 Lightning came out, they decided not to advertise at all, and sales are still great.

Really, it’s just common sense. If you’re selling everything you can do, it doesn’t make sense to spend anything on advertising to sell more stuff than you can’t do right now.

This does not mean that non-advertising companies spend nothing at all on promotion.

Now, to be perfectly fair, a lack of advertising does not mean that there is no effort to promote vehicles. Advertising simply means buying space or time from the media, and does not include “earned media”.

As anyone can see, automakers spend huge amounts of money putting on a show when they launch new vehicles. Journalists receive invitations (often with free flights, hotel and food), lots of money is spent on celebrity presenters and/or musical numbers, and the party itself is not only expensive, but adorned. The video production (for TV and for internet streaming) is top notch.

Additionally, getting journalists’ butts into the seats comes at the company’s expense in many cases. Loan vehicles are sent to journalists (usually for a week, but sometimes longer) so that we can review them. These vehicles receive the best care and cleaning between reviewers, and are often worked on a bit in advance to minimize things like squeaks and rattles.

On top of that, some companies have aggressive sponsorship programs to get vehicle owners or anyone else to help promote the vehicle. I haven’t seen Ford do this, but I know dealerships do it sometimes and manufacturers like Tesla have done it here and there as well.

But advertising alone is still a lot of money

Although the expenses I mentioned above are significant, they are very effective. Instead of putting images of your vehicle in the margins of a publication where readers can ignore you, or between programs viewers actually want to see, Earned Media puts you front and center where people actually watch. The ratio of dollars spent to vehicles sold is very favorable for any company doing this type of advertising.

Advertising not only costs significantly more (Ford spent $3.1 billion last year on advertising alone) – it also gets fewer results than earned media, guerrilla marketing and referrals. It’s still an essential part of staying prioritized for shoppers, but it’s the least effective part of the puzzle.

So, do electric vehicles sell?

I would say they do, but only if the EV doesn’t suck.

Sure, the money goes into the promotion, but the earned media and referrals aren’t really in the hands of a company. Unless the product itself is compelling, or at least decent, no one will get excited about it. No one will write great reviews, watch the launch party, or tell their friends they should buy one if the product doesn’t deliver.

Advertising, on the other hand, doesn’t really have this problem. You can spend gigabucks to get your product in front of people and it will get in front of people, no matter how crappy. Unless you make blatantly false claims or engage in other deceptive practices (that get you in legal hot water), it will work. But the price to get these results is rather high.

So if there’s no more advertising and only earned media and referrals are driving sales, it’s pretty clear that the vehicles themselves are doing the heavy lifting.

Where does Ford’s (former) advertising money go?

While it might seem obvious that spending less money means more profit, Farley told conference attendees he had something better in mind for the roughly $500 to $600 per vehicle that would be saved by avoiding advertising: customer experience.

“Our model is messed up,” Farley told conference attendees. “We don’t spend anything post-warranty on customer experience.”

He mentioned that dealerships could be part of improving the after-sales experience, but that doesn’t give us specifics on what that would mean. Fortunately, I spent some time talking to Ford and may have some clues about something innovative they are doing for Bronco owners.

Photo by Jennifer Sensiba/Clean Technica.

Most people who aren’t fans of the Bronco and Bronco Sport don’t know that new owners get the chance to attend a special off-road vehicle school that Ford offers at several locations across the United States. I visited a facility near Austin, but I know there are others in famous places like Moab, Utah. When I first pulled over to check out the Bronco Off-Roadeo, I could tell it was something special.

Photo by Jennifer Sensiba/Clean Technica.

The entrance alone was like entering Jurassic Park, but without the hungry dinosaurs inside looking for small snacks. Like a new vehicle launch party, they clearly went all out to decorate the place and make it a special experience for Bronco owners. They had professional drivers, a set of off-road courses, and a really neat building for class time and meals.

Photo by Jennifer Sensiba/Clean Technica.

It would be extremely cool to see Ford start doing the same for EV owners in the future. Basic racing lessons for a Mach-E GT, serious work sessions for the Lightning and E-Transit (Ford already does this in some ways), and some time on an Off-Roadeo for some versions of the Lightning could all be amazing ways to give customers a neat experience with what would have gone to advertise.

I’m sure smaller scale events and amenities could also be part of the dealership experience in the future, which would be much better than what people experience at dealerships today.

Image selected by Ford.


 


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