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SENSOR TOWER · ABRAHAM YOUSEF · APRIL 2024
MMM: Tesla 1Q24 Digital Advertising Trends and Earnings Results
Tesla's reported revenue and net income dropped in 1Q24, but shares rose 12% due to optimism around a new vehicle line for budget-conscious consumers. The company has increased digital advertising spending significantly in response to declining demand in the EV industry. Sensor Tower data shows that Tesla’s total US digital ad spend through 2024 YTD is up triple-digits on a YoY basis with the number of creatives up more than 10x through the same period.
Key Takeaways:
Tesla’s 1Q24 EPS and revenue missed street estimates, with the latter exhibiting the most dramatic YoY decline since 2012. Despite these results, shares soared after the company announced that it would move up production of a lower-priced vehicle line. Reported vehicle deliveries in 1Q24 fell -20% QoQ, in line with a -8% QoQ decline in Sensor Tower mobile app downloads for the Tesla app
Although ST download data has long been an accurate indicator of this metric (boasting a robust correlation coefficient of .94 from 2019-2024), the rise of the secondary market for Teslas (and other EVs) has prompted somewhat of a disconnect between reported vehicles delivered and first time app downloads
Historically Tesla has relied on word of mouth marketing to drive consumer interest and sales, with the brand benefitting heavily from its first-mover advantage. However, as persistent inflation and elevated interest rates, along with heightened competition, have weighed on demand, the company has adjusted its strategy: Per ST data, Tesla’s total US digital ad spend through 2024 YTD is up more than 320% compared to the full year 2023
In its advertising push, Tesla has heavily leveraged YouTube to drive consumer interest as ST data shows that the majority (85%) of the company’s spend is dedicated to the channel through 2024 YTD, compared to 5% each on X and Instagram, 4% on Desktop Display and 1% on Facebook
ST data shows that Tesla has run 12x more creatives in the US through 2024 YTD compared to 2023, further reinforcing the company’s elevated advertising investment over the course of this year, perhaps influenced by deteriorating demand
ST’s proprietary desktop and mobile app panel data shows that engagement on both tesla.com and the Tesla app have declined sequentially over the past few quarters. Both average time spent and sessions on tesla.com have declined an average of -3% QoQ from 2Q23-1Q24, while the same metrics declined an average of -2% and -1% QoQ, respectively, on the Tesla mobile app, perhaps suggesting that the company’s digital marketing efforts have yet to resonate with consumers
For more information, request the full report from reports@sensortower.com.
