Tesla’s Media Strategy: Build A Brand Without Spending on Advertising

It’s been quite a week for Tesla Motors. The Palo Alto, CA- based electric car company claimed it reached profitability for the first time, saw its stock close at an all-time high and unveiled a new financing program.

And much of the action was driven by CEO Elon Musk’s bold, brash and unconventional use of social media. The man who helped change the internet by co-founding PayPal is proving just as determined to change the rules for how public companies communicate – even as the Securities and Exchange Commission wrestles with how to bring those rules into the 21st century.

“Elon Musk is a marketing genius, in our view,” said Andrea James, a vice president of Minneapolis-based investment bank Dougherty and Co.

Greg Sieck, a San Francisco-based brand strategist, likened Musk’s image as the Silicon Valley pioneer taking on Detroit and Big Oil to the way Lee Iacocca revitalized Chrysler three decades ago. “People want to be engaged with Tesla, and they want to read Elon’s [online postings],” Sieck said. “He’s the voice of the company.”

Analysts say Tesla’s media strategy – strategic postings from Musk that build interest in upcoming corporate announcements, creating a steady drip of information – is unconventional, but largely working.

When Musk publicly took on The New York Times over an unfavorable review, for example, he kept the feud in the news for days while managing to galvanize the Tesla faithful on his behalf. And he keeps customers and fans updated on Tesla’s progress with an infectious enthusiasm. “Am happy to report that Tesla was narrowly cash-flow positive last week,” he posted on Dec. 3. “Continued improvement expected through year end.”

While traditional automakers spend heavily on print and broadcast advertising, Tesla is building its brand in a way that doesn’t cost anything.

“For the past week, a lot of attention has been focused on the company – probably more than their fair share,” said Ben Kallo, an analyst with Robert W. Baird.

The company’s stock rose more than two percent after Musk posted March 25 about a “major” announcement that ended up being the financing program. Wall Street was actually more excited about the tweet than about the news itself, which was followed by a drop in Tesla’s stock, but Musk nonetheless succeeded in bringing a spotlight to the sales technique.

Musk deftly uses the social media platform to dish out tidbits about the three companies he’s currently involved in: SpaceX, Tesla and SolarCity. It helps that Musk is an esoteric billionaire who dreams of sending humans to Mars.