Ford Decides Paying for Ads Is Stupid

ford decides paying for ads is stupid

Ford CEO Jim Farley has said he sees little reason for the automaker to bother using traditional advertising campaigns for electric vehicles. Considering how often I see the Ford logo grace whatever screen I happen to be peering into, this would seem to go against everything I’ve been conditioned to accept. However the company believes its EVs practically sell themselves already, with the executive noting that the Mach-E has been sold out for quite some time.

“I’m not convinced we need public advertising for [electric vehicles] if we do our job,” Farley said during Wednesday’s Bernstein Strategic Decisions Conference.

First reported by Bloomberg, Blue Oval has opted to copy Tesla’s playbook and forego traditional advertising. Farley himself noted that the EV brand saves itself a bundle by circumventing the dealership model (something a lot of legacy manufacturers are now trying in Europe). Ford figures it can help offset some of the $50 billion it plans on spending to develop EVs through 2026 by scaling back its marketing efforts.

The CEO also noted that he envisions the Detroit automaker tweaking its relationship with dealerships in the U.S. to focus on service after the sale. This likewise apes the Tesla model and is broadly in line with some of the sweeping changes the industry is now considering we outlined in a recent article. But the abridged version is that there will be consolidation/vertical integration — and plenty of it.

“Our dealers can do it, but the standards will be brutal,” Farley said. “Their business will change a lot and there will be a lot of winners and losers and, I believe, consolidation.”

From Bloomberg:

Ford is one of the nation’s biggest advertisers, spending $3.1 billion last year promoting its products. But Farley wants to emulate Tesla Inc., which controls the US market for EVs despite not buying traditional advertising. He said Ford hasn’t needed to advertise its new F-150 Lightning plug-in pickup and that it stopped promoting its electric Mustang Mach-E because “it’s sold out for two years.”

“We spend $500 to $600 per vehicle on public advertising. Get rid of all of it,” Farley said. “If you ever see Ford Motor Co. doing a Super Bowl ad on our electric vehicles, sell the stock.”

There are a few ways of looking at this. You can either see Ford noticing that Tesla doesn’t have a marketing budget and manages to trade well due to its hype on social media and the press spending the last few years talking about nothing else, you can suppose it doesn’t make sense to spend money advertising vehicles that aren’t currently available, or you can view this as a retreat from the EV space.

I can’t quite put my finger on it but something tells me that many legacy automakers haven’t been as committed to EVs as originally claimed. The industry has been spending billions on “mobility projects” that have helped get EVs to market. But I would hazard a guess that a large portion of that money went toward building data centers, advancing vehicular connectivity, and purchasing ancillary tech firms manufacturers assumed would explode in value or head the next great breakthrough in self-driving cars. Autonomous vehicles have been promised to us since Firebird II was filmed cruising down a fly-by-wire highway in 1956. But any practical application has always been “a few years away.” Even today, the technology seems a little too finicky to be reliable and the legal implications are so vast that it would probably take lawyers years just to agree upon who is ultimately to blame when something does go wrong.

But this didn’t stop automakers from marketing these technologies before they existed. Nor has it prevented them to promote some of the advanced driving aid systems that emerged as a direct result of the research.

Electric cars have had a better track record overall and were even commonplace as urban runabouts in the early days of the automobile. They’re tangible and can be bought today from an array of brands. But they’ve also cost the industry a lot of money and will continue to because that’s the nature of development. Ford presumably understands this better than anyone and has elected to hedge its bets while it doesn’t yet have the manufacturing capability to flood the United States with EVs.

Viewed from this angle, a lofty advertising budget dedicated to all-electric vehicles seems like a bit of a boondoggle.

Despite EVs having made some serious headway in specific markets, often with the aid of government mandates, the United States is typically at the bottom of the list. Meanwhile, the world is beginning to confront a situation where sourcing the materials necessary for battery production is assumed to get substantially more difficult and expensive. I’m assuming Ford simply sees no upside to marketing EVs until it has another one on offer and simply wanted to make a big deal out of the issue to draw some Tesla-like media coverage for itself. Successfully, I might add.

[Image: Ford Motor Co.]

Comments
Join the conversation
5 of 33 comments
  • Mike Beranek Mike Beranek on Jun 03, 2022

    Farley- "Look at me! Look at me! I'm just like Elon!"

  • DenverMike DenverMike on Jun 03, 2022

    The first glimpse I had at the all-new for ‘04 F-150 was in a Tundra ad. Then in the Dodge and GM pickup carpet bombing of ads, all throwing dirt on plain fleet-white base F-150s vs of course their fully loaded pretty trucks. I was fairly out of the loop, but figured if it had them craping their pantz, I better go take closer look. And I bought one. They were right to do so and it was the F-series’ biggest year to date, and for coming decades, but included the old jellybean for fleets only. I never saw one ad that year for any of them including Super Duty.

    • See 2 previous
    • Jeff S Jeff S on Jun 04, 2022

      @DenverMike Ram was doing the same thing with the old Ram and the new Ram and Chevy did a similar thing in 2007. Good way for manufacturers to offer a more affordable truck while using stampings and toolings already paid for but presently just having enough chips and electronic components to make vehicles makes it more profitable to allocate those components to vehicles that are more profitable. I doubt the manufacturers will be funding any major redesigns of vehicles since in the last few years they have introduced redesigned trucks. Also manufacturers are spending on developing EVs that otherwise would go for new ICE. Will be interesting to see what the manufacturers will do over the next decade.

  • Theflyersfan I was living in one part of the world when China and Russia were completing their 21st century scramble of Africa. They were pumping billions into the economies of these countries building new dams, bridges, skyscrapers, freeways/toll roads, utilities, power plants, you know - projects that would benefit the average resident of said location. All they wanted in exchange were the mineral, mining, fishing, timber, etc., rights of said location. And they got them. So during that era when they were looking at global expansion, we were fighting unwinnable wars and our "leaders" on the left were yelling at the "leaders" on the right and vice versa, and what happens when all you do is stare and focus on one thing like DC is known to do? The world moves on around you. And that's what happened here.We had the same opportunity to build Africa up and to make the same deals as other countries, but our "nation building" tends to take place via the conversion from something solid and standing to something in pieces and in rubble. So it looks like we'll continue to have to deal with hostile nations holding our feet into the fire and working through their many geopolitical issues just so we can continue to get cheap electronics and necessary materials in our manufacturing just because we decided around 40+ years ago to ship it all overseas because we wanted to save 50 cents on a pack of socks and the CEOs needed their next quarterly statement to look even better to the shareholders so they could increase their pay and bonuses, consequences be damned.
  • DweezilSFV I didn't think GM could make a worse looking truck than their full-sizers.Success.
  • DweezilSFV GM. Still trying to make OnStar happen.And still the answer to a question no one ever asked.
  • Corey Lewis Look, here's the voice warning record player!http://japanesenostalgiccar.com/wordpress/wp-content/uploads/2009/05/datsun_810_maxima_voice_box.jpg
  • Buickman as Donnie Brosco said... Forget about it.
Next