Last week, a piece in Bloomberg told us that Ford is looking to do what Tesla does: not spend on advertising. Why? Because its EVs are already sold out for two years. With a second manufacturer considering ditching traditional advertising, it’s looking like EVs could be selling themselves, or that traditional advertising isn’t what it used to be.
Why Ford Ditched Advertising For EVs
At a recent conference, Ford CEO Jim Farley told viewers that they already don’t do any EV advertising. They initially advertised the Mustang Mach-E, but it wasn’t long before every vehicle the company could make for two years sold out completely. With that kind of a backlog, they didn’t have any logical reason to spend anything more on advertising. Then, when the F-150 Lightning came out, they decided to not advertise at all, and sales are still great.
Really, it’s just common sense. If you’re selling everything you can make, it makes zero sense to spend anything on advertising to sell more things that you can’t make right now.
This Doesn’t Mean Non-Advertising Companies Spend Nothing At All On Promotion
Now, to be perfectly fair, a lack of advertising doesn’t mean that there aren’t any efforts to promote the vehicles. Advertising just means buying space or time from media, and doesn’t include “earned media.”
As anyone can see, automotive companies spend lavishly to put on a show when they release new vehicles. Journalists get invites (often with free flights, hotel, and food involved), big bucks get spent on celebrity presenters and/or musical numbers, and the party itself is not only expensive, but ornate. Video production (for both TV and for internet streaming) is top notch.
Also, getting ‘butts in seats happens on the company dime in many cases. Loaner vehicles get sent out to (usually for a week, but sometimes for longer) so that we can review them. These vehicles get the best care and cleaning between reviewers, and are often worked on a bit beforehand to minimize things like squeaks and rattles.
On top of that, some companies have aggressive referral programs to get vehicle owners or anyone else to help promote the vehicle. I haven’t seen Ford do this, but I do know that dealers do it sometimes and that manufacturers like Tesla have also done this here and there.
But, Advertising Alone Is Still A Lot Of Money
While the expenses I wrote about above are big, they’re very efficient. Instead of putting images of your vehicle in the margins of a publication where readers can ignore you, or between the programs TV watchers actually want to see, earned media puts you front and center where people are actually looking. The dollar spent to vehicles sold ratio is very favorable for any company doing this kind of advertising.
Advertising not only costs a lot more (Ford spent $3.1 billion last year alone on advertising) — it also gets less results than earned media, guerrilla marketing, and referrals. It’s still an essential part of staying top-of-mind for buyers, but it’s the least efficient part of the puzzle.
So, Do EVs Sell Themselves?
I’d argue that they do, but only if the EV doesn’t suck.
Sure, money does go into promotion, but earned media and referrals isn’t really in a company’s hands. Unless the product itself is compelling, or at least decent, nobody’s going to get excited about it. Nobody will write great reviews, watch the release party, or tell their friends they should buy one if the product doesn’t deliver.
Advertising, on the other hand, doesn’t really have that problem. You can spend gigabucks putting your product in front of people and it will get in front of people, no matter how crappy it is. Unless you’re making blatantly untrue claims or engaging in other deceptive practices (that get you in legal hot water), it will get results. But, the price to get those results is rather high.
So, if advertising is out and only earned media and referrals are causing sales to happen, it’s pretty clear that the vehicles themselves are doing the heavy lifting.
Where’s Ford’s (Former) Advertising Money Going To Go?
While it may seem obvious that spending less money means more profits, Farley told conference attendants that he had something better in mind for the approximately $500–600 per vehicle that would be saved by avoiding advertising: customer experience.
“Our model’s messed up,” Farley told conference attendees. “We spend nothing post-warranty on the customer experience.”
He mentioned that dealers could be part of the post-sales experience improvement, but that doesn’t give us specifics about what that would mean. Fortunately, I’ve spent a little time talking to Ford and I may have some clues from 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 a chance to attend a special off-road vehicle school that Ford offers at several locations in 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 up to check the Bronco Off-Roadeo out, I could tell it was something special.
The entrance alone was something like entering Jurassic Park, but without hungry dinosaurs inside looking for small snacks. Like a new vehicle release party, they clearly went all out decking the place out and making it a special experience for Bronco owners. They had professional drivers, a set of off-road courses, and a really neat looking building for classroom time and meals.
It would be extremely cool to see Ford start doing similar for EV owners in the future. Basic racing courses for a Mach-E GT, serious work sessions for the Lightning and E-Transit (Ford is already doing this in some ways), and some time at 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 advertising.
I’m sure smaller-scale events and amenities could become part of the dealer experience in the future, too, which would be a lot better than what people experience at dealers today.
Featured image by Ford.
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