Why Tesla's Profitability Proves Earned Media is The Future

tesla profit
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Why Tesla’s Profitability Proves Earned Media is The Future

Yesterday, shares for Tesla shot up 10% after CEO Elon Musk announced an “incredibly historic quarter.” With $300 million reported net income, this was the first time that Tesla officially became profitable. This good news was sorely needed in the wake of several controversies surrounding the CEO. Financial analysts appeared cautiously optimistic about the state of cash flows and the future of the company.

Perhaps most miraculous is that Tesla managed to pull this off after spending zero dollars on advertising.


Tesla Ad Spend Chart vs Car Industry Competitors

How Tesla’s Bold $0 Ad Budget Leads To Growth

Rather than investing in paid advertising over the years, Tesla has invested in earned media through public stunts, innovative car design, a highly prominent (albeit occasionally controversial) leader, and word-of-mouth buzz which has generated consistent press coverage and consumer demand.


Tesla has been borderline genius about cultivating press coverage, finding unique ways to piggyback off major events like the SpaceX Falcon Launch, and building extreme anticipation in the lead up to company announcements.


From the smooth exterior to the falcon wing doors, Tesla cars were designed with a unique look that many compare to the iPhone revolution for phone design. As more Teslas appear in the world, they essentially act as moving advertisements for the brand.


Tesla cars are not sold through dealerships, only in their private showrooms. They also offer referral programs for current Tesla owners with exclusive benefits. This elite word-of-mouth network has only propelled demand for the car further.


In spite of recent controversy, Elon Musk is no doubt the most famous public CEO of a car company since Henry Ford. He is bold and ambitious in his goals, highly active on Twitter (where he has 23.2 million followers), and set of deeply loyal fans called “Musketeers” who are convinced Musk will save the world.

Within the auto industry Tesla appears to be a unicorn, but in reality, the company reflects the future of how brands advertise — by earning consumer interest, rather than paying for it.

Source of chart data: Statista

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