Now that Elon Musk is close to purchasing Twitter, might this transaction impact how legacy automakers decide to utilize the social media site in the future. While many discuss the merits of free speech when discussing Musk’s purchase of Twitter, fewer think about his ownership of the town square that also is a primary medium he uses to promote Tesla. With his 100 million followers, Musk uses Twitter as a tool to effectively drive the Tesla marketing funnel of awareness, opinion, and consideration as well as to exectutive CRM and PR communication with vehicle owners and investors.
Legacy automotive chiefs also try to use Twitter to promote their brands and vehicles with consumers, in addition to help persuade investors about the future value of their companies. Yet these CEOs only have a fraction of the Musk followers on Twitter.
While Tesla famously allocates no media dollars toward advertising, legacy automakers spend billions of ad dollars which also includes paid advertising on Twitter as well.
Volkswagen spent $5.7 billion worldwide on advertising in 2019. General Motors spent over $2 billion toward advertising in 2020 in the U.S. alone. With no ad expenditures, Tesla has essentially become the “Kleenex” of electric vehicles, selling premium priced “Kleenex” electric cars at scale. Twitter plays a significant part of Musk’s ability thus far to forego billions in marketing spend.
It is unreasonable to believe that legacy automakers can try to compete with Tesla on a marketing and advertising spend basis. However, a rethink of their usage of the “town square” soon to be owned by a primary competitor might be appropriate. Will Musk-led changes to Twitter’s business model and rules favor Tesla and Musk usage of the site? Will new types of content allowed on Twitter under Musk’s stewardship be appropriate for these automakers? Can automakers even afford to move away from Twitter given its impact on influencing consumers and investors? These and other questions will need to be addressed by all of the executive leadership teams of legacy automakers.
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