Last week, a piece in Bloomberg told us that Ford wanted to do what Tesla did: spend no money on advertising. Why? Because the EV has been sold for two years. With a second manufacturer considering ditching traditional advertising, it looks like EVs could be selling themselves, or traditional advertising isn’t what it used to be.
Why Ford Is Ditching Advertising For EVs
At a recent conference, Ford CEO Jim Farley told viewers that they are no longer doing EV advertising. They initially advertised the Mustang Mach-E, but it wasn’t long before every vehicle the company could build for two years was sold out. With such a backlog, they have no logical reason to spend more money on advertising. Then, when the F-150 Lightning came out, they decided not to advertise at all, and it was still selling well.
Really, that’s just common sense. If you’re selling everything you can make, it doesn’t make sense to spend anything on advertising to sell more stuff you can’t make right now.
This Doesn’t Mean Non-Ad Companies Don’t Spend Anything On Promotion
Now, to be completely fair, the lack of advertising does not mean that there is no attempt to promote the vehicle. Advertising only means buying space or time from the media, and does not include “acquired media”.
As anyone can see, auto companies spend a lot of money showing them off when they release new vehicles. Journalists get invited (often with free flights, hotels, and meals involved), a lot of money is spent on celebrity presenters and/or music numbers, and the party itself is not only expensive, it’s ornate. Video production (for TV and internet streaming) is top notch.
Also, getting a journalist’s ass in a chair happens on a dime company in most cases. Borrowed vehicles are sent to reporters (usually for a week, but sometimes longer) so we can review them. These vehicles receive the best maintenance and cleaning among reviewers, and are often machined a little earlier to minimize things like creaking and rattling.
In addition, some companies have aggressive referral programs to get vehicle owners or other people to help promote the vehicle. I’ve never seen Ford do this, but I know that dealers do it sometimes and manufacturers like Tesla do this here and there too.
But, just advertising is still a lot of money
Although the expenses that I wrote above are large, they are very efficient. Instead of placing images of your vehicle in the margins of publications where readers can ignore you, or among programs that TV watchers really want to see, the acquired media puts you front and center where people actually see. The ratio of dollars spent on vehicles sold is very profitable for any company that does this kind of advertising.
Not only does advertising cost more (Ford spent $3.1 billion last year alone on advertising) — it also earns less than earned media, guerrilla marketing, and referrals. It’s still an important piece for buyers to remember, but it’s the least efficient piece of the puzzle.
So, Does an EV Sell Itself?
I’d argue that they do, but only if the EV doesn’t suck.
Of course, money is indeed used for promotion, but the media and references obtained are not entirely in the hands of the company. Unless the product itself is interesting, or at least decent, no one will be interested in it. No one is going to write great reviews, binge watch releases, or tell their friends they should buy it if the product doesn’t ship.
Advertising, on the other hand, doesn’t really have that problem. You can spend a gigabuck to put your product in front of people and it will show in front of people, no matter how ugly it is. Unless you make grossly untrue claims or engage in other fraudulent practices (which get you into legal trouble), it will pay off. However, the price for getting these results is a bit high.
So if the ad goes out and it’s only the media and references that get the sale going, it’s pretty clear that the vehicle itself is doing the heavy lifting.
Where Did 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 for around $500–600 per vehicle that he would save by avoiding advertising: the customer experience.
“Our model is a mess,” Farley told conference attendees. “We don’t issue anything after-warranty for customer experience.”
He mentioned that dealers could be a part of improving the post-sales experience, but that didn’t give us any specifics about what that might mean. Luckily, I’ve spent quite a bit of time talking to Ford and I might have some hints of something innovative they’re doing for Bronco owners.
Most people who aren’t fans of the Bronco and Bronco Sport don’t know that new owners have the opportunity to attend the special off-road vehicle schools that Ford offers in several locations in the United States. I visited a facility near Austin, but I know there are other facilities in famous places like Moab, Utah. When I first stopped to check out the Bronco Off-Roadeo, I knew it was something special.
The entrance alone is like entering Jurassic Park, but without the hungry dinosaurs inside looking for a snack. Like a new vehicle release party, they clearly went out of their way to decorate the place and make it a special experience for Bronco owners. They have professional drivers, a set of off-road courses, and a very neat looking building for class time and food.
It would be cool to see Ford start doing something similar for future EV owners. Basic racing courses for the Mach-E GT, serious work sessions for Lightning and E-Transit (Ford has already done this in some ways), and some time on Off-Roadeo for some versions of Lightning can all be great ways to give customers a hands-on experience. which is neat with what will go into advertising.
I’m sure smaller scale events and facilities can also be part of the dealer experience in the future, which will be much better than the experience of people at dealerships today.
Featured image by Ford.
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