When was the last time you remember seeing a car commercial for Ford? Toyota? Honda? We can’t forget about Shaq’s Buick commercial:
Now try to remember the last time you saw a Tesla commercial. Go ahead, take your time.
Absolutely nothing comes to mind. So how exactly did Tesla become the best selling luxury sedan in America in February? Let’s even scratch the models I talked about earlier and focus solely on luxury brands – Audi, Mercedes, Lexus? We can all recall some sort of commercial. But not Tesla.
Elon Musk, CEO of Tesla, has taken a unique approach to advertising with social media. An active Tweeter, Musk has done a great job of being Tesla’s voice to the public. Unlike companies like Apple, who wait till large events to unveil what they have in store, Musk likes to give people a heads up of what’s to come. That’s not to say he’ll give everything away – just a little something to get people excited. On July 20, Musk unveiled Tesla’s Master Plan, Part 2. This wasn’t by surprise though.
Musk’s single Tweet boosted Tesla shares up 4% on July 11. Even after Tesla’s shared dropped significantly after Tesla decided to acquire SolarCity (which was not long before this Tweet on July 10), investors still believed in Musk’s future plan. This isn’t the only case. In March 2015, Musk Tweeted about a major new product line that would be unveiled in April. Result? Another increase of around 4%, increasing Tesla’s market cap by over $1 billion. The two tweets above were retweeted a combined 17,000 times. Now, that might not seem like a very large number. But, when you look at the fact that Musk (and Tesla) paid a grand total of $0 for it and got an increase of $1 billion in market cap, 17,000 retweets doesn’t look too shabby anymore.
Although many investors believe that Tesla’s shares are overvalued (mainly because it’s still not even a profitable company), these Tweets have done a great job to make investors excited about what’s to come. And because Musk was able to have pretty good success with Master Plan 1, which he wrote in 2006 and may have been ludicrous at the time, you really can’t count him out for any future innovation.
Compare Elon Musk to other innovators in the space – Tim Cook, CEO of Apple, has a huge 5.5 million followers but less than 300 tweets to his name. Lots of followers, few Tweets. Marc Benioff, CEO of Salesforce, has a grand 13,000 tweets but less than 300,000 followers. Lots of Tweets, few followers. Sundar Pichai, CEO of Google, has a bit over 800 tweets but less than 600,000 followers. A decent following, but still pretty low on Tweets. Compare that to Musk. A whopping 5.5 million followers with over 2,000 Tweets – all related to Tesla or SpaceX. He has been a voice that has made Tesla so much more transparent as a firm overall.
Not only is he being transparent, but he’s also proving everyone wrong. A lot was said about the unfortunate Autopilot accident that occurred this past summer – read up about it here if you don’t know. Consumer Reports wanted Musk to change the name from Autopilot to something else and remove some of the autosteer features. Musk has not been afraid to Tweet about automobile accidents:
Back to back Tweets, Musk is definitely letting the public know that the Autopilot feature is still safer than if a human is driving – the data is right there. One fatality every 222 million miles or one every 88 million miles. You pick. Musk is just giving out the data. Another driver was killed on the road while in a self-driving Tesla car this summer, and people were quick to blame that the Autopilot feature was the reason why he died. After deeper investigation, Musk responds:
Musk has championed what it means to use social media to not only improve the brand and image of a company (and he’s running two) but also shows how CEOs can use such transparency to alert the public about what’s to come. This transparency can give the public a better view of your overall product and give financial investors more confidence about where you’re headed. It’s not that simple, though. Musk has had to be extremely careful to not reveal any information that would go against the SEC, especially one main rule regarding disclosure of select corporate news. However, Musk is just a great example for executives to learn how to use advertising that isn’t just a 30 second television commercial that probably cost thousands of dollars. Elon does it better – and does it for free.