OptiMine CEO Matt Voda joins Yahoo Finance Live to discuss Tesla's new advertising strategy and the state of the EV market including pricing, challenges, and competition in the space.
RACHELLE AKUFFO: Well, Tesla appears to have dropped its first-ever traditional commercial on its Tesla Asia Twitter page. In this two-minute video, a mother gives a driver testimonial about why she loves her Tesla Model 3 and highlights the car's features.
Now, this marks a shift in the company's branding as Elon Musk has tweeted in the past that he, quote, "hates advertising."
Well, joining us now is OptiMine CEO Matt Voda to discuss more about where Tesla's advertising could go. Thank you for joining us this morning. So first want to talk about--
MATT VODA: Thank for having me, Rachelle.
RACHELLE AKUFFO: --this foray of Tesla-- of course. Want to talk about this foray of Tesla now into the traditional advertising space and really the timing around it. What do you make of it?
MATT VODA: You know, you have to tip your hat to Tesla for getting this far without investing anything in advertising, so that's pretty remarkable in and of itself. But I think from a timing perspective, despite the news that you just had just before this about Tesla Model Y leading car sales and that success, they face a lot of pressure in the market. Most of the major manufacturers have a whole slate of EVs coming into the market over the next 12 months. And I think that they realize that they have a branding issue in the market, and they face some pretty significant competition coming quickly.
RACHELLE AKUFFO: So then in terms of the elements that, really, if you were advising Musk as to how he should approach sort of Tesla advertising, given that he is very outspoken, he's very visible on Twitter, as well, and it is hard to separate the man from the brand.
MATT VODA: Yeah, and I think that's Tesla's main challenge, and it's extremely difficult to solve. How do you separate Tesla's brand from Musk personally? And so Tesla needs to build a brand that can stand on its own, that has its own value and place in the minds of consumers, and where consumers don't automatically think of Elon Musk. And as I said, that's an enormous challenge, but Tesla has to have its own brand value in the hearts and minds of consumers that is clearly separate from Elon Musk.
RACHELLE AKUFFO: And obviously this is the time when a lot of companies are pulling back on their ad spend or being more strategic, at least. For the clients that you advise-- I mean, you advise some big clients here. I know JCPenney is on that list, among others. In terms of what they're trying to do to get more ROI with their marketing and their ad budgets, how strategic are they being? Where are they putting their money to work?
MATT VODA: You know, I think successful brands are resisting the pressure to reduce their advertising budgets because they know that that creates difficulty down the road. And it requires great analytics to stand up to the finance team to say, this is the return that we're getting from these investments. This is what it drives in terms of revenue for the business. And so that's the first objective, and I think that successful brands are able to resist that pressure because they have the intelligence to prove the value of the advertising.
From there, it gets a little more complicated. You know, consumers' buying preferences and behaviors have shifted pretty significantly over the last 24 months, and so brands have had to become more creative, maybe more persistent in terms of how they reach brands-- sorry, consumers where they're making their purchase decisions. And so a lot of brands are maybe moving away from more traditional forms of advertising to more modern areas where consumers are using their mobile devices to consume content, maybe using streaming devices to consume, you know, traditional TV. And so brands are adjusting and adapting the channels that they're using to reach consumers because the consumers have shifted themselves, but it's a challenge.
RACHELLE AKUFFO: I think that it's obviously--
MATT VODA: It's a challenge.
RACHELLE AKUFFO: Well, you have an interesting situation with Musk owning Twitter and, of course, they're able to advertise on Twitter as well. How do you think advertisers are really going to view sort of how they feel about having their ads placed on Twitter, say, next to a Tesla ad when obviously there's a very different interest when it comes to the actual CEO of a company now also being able to push his own ads for his own products?
MATT VODA: Well, I think that-- and we've seen a lot of news on this front. A lot of large brands have moved their advertising off of Twitter not because they're worried about their ads showing next to Tesla. They're worried about their ads showing next to objectionable content, and they're worried about the safety of their brands, and that drove an exodus of advertisers off of the platform.
And so, you know, a car manufacturer like Toyota or Ford probably worries more about their brand reputation than having their ad, you know, run alongside of a Tesla ad. I think they're less worried about that. I think that they believe in their products. They know that Tesla is going to be investing in advertising here over the next year. That's a possibility, but I don't think that that's the main concern they have about advertising on Twitter.
RACHELLE AKUFFO: And just very quickly to follow up on that. When they did leave Twitter, where did a lot of these companies end up going then?
MATT VODA: You know, I think that they found other audiences and other social-media platforms. So Facebook was a beneficiary of this exodus. Even platforms like Snap and TikTok have been beneficiaries.
So, you know, these brands want to reach younger consumers who may not have a TV in their home, maybe consuming news and content on their mobile devices. And so social media is the place to reach that type of consumer. And there are other social-media platforms besides Twitter in the market, and so brands had an easy switch to make to other platforms.
RACHELLE AKUFFO: You certainly have options. A big thank you for joining me in this morning. OptiMine's CEO Matt Voda, thanks so much.
MATT VODA: Thank you.