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.]