The automotive industry spent less on advertising during the first seven months of 2022. Although Tesla spends $0, the decline in ad spending could be an indicator of troubles for an industry trying to compete with Tesla’s EV lead.
Reuters reported that the auto industry’s ad spending fell to $4.8 billion between January and July 2022 or 4% year-on-year. Compared with the same period in 2019 ($5.50 billion) the overall ad spending for the first seven months of 2022 was 12.7% less.
According to data from Standard Media Index (SMI) digital ad spending accounted for 52% of the total $4.80 billion spent. Perhaps the automotive industry is learning a lesson, here. The lesson is to not focus so much on Tesla and more on its own products.
For example, during the During Super Bowl LVI, Polestar paid for an advertisement that focused more on Tesla, Mars, and Elon Musk than it did on its own products. Yes, it may have mentioned its own brand and products, but its focus on Elon Musk and Tesla is what’s memorable about the ad.
On Twitter, a few executives of competing automotive and even software companies often take shots at Elon Musk, Tesla customers, and Tesla’s products and services. The focus of automakers on Tesla instead of its own products is noticed.
Automakers weren’t the only ones focusing on Tesla during the Superbowl. Salesforce also got in on the action but that was more or less focused on Elon Musk and Mark Zuckerberg. In stark contrast to these automakers’ spending on advertising, Tesla spends $0. Instead, Tesla spends more on research and development (R&D) than all of the other automakers.
According to a study by StockApps.com, Tesla recorded the highest R&D spend per car sold at $2,984 as of March 2022. Notably, the Stock Apps study backed up data published in October 2021 by Visual Capitalist which shared an R&D spending comparison between Tesla, Ford, Toyota, General Motors, and Chrysler.
Reuters noted the decline in advertising coincided with inventory shortages, and fewer sales despite vehicle demand staying strong. Perhaps these automakers should consider spending more on R&D and focusing less on Tesla and Elon Musk.
Note: Johnna is a Tesla shareholder and supports its mission.
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