By Matt McFarland | CNN Business
Andy Cunningham, a longtime Silicon Valley communications professional who once worked with Steve Jobs and now leads her own marketing agency, the Cunningham Collective, said she heard from a concerned Tesla shareholder last year.
Tesla CEO Elon Musk was coming off a hectic 2018, in which he was criticized for smoking cannabis on a popular podcast. He also tweeted erratically at times. He tweeted that he was taking Tesla private and that he had secured funding when the SEC said he had not, which led to a $40 million fine, $20 million for Musk personally and $20 million for the company.
The Tesla shareholder wondered if Cunningham could help Musk with his communications strategy, she said. Cunningham said she told the shareholder she didn’t think she could help. Musk, she felt, just wants to be himself, and not be managed.
The approach seems to be working, she told CNN Business in an interview this month. But she doesn’t believe any other CEO could pull it off. Musk, she said, has the rarefied status of a visionary who is seen as making the world a better place. His work is so inspirational to many, she said, that it trumps any missteps.
Musk has earned a place in history books through unconventional bets. He pioneered cheaper reusable rockets at SpaceX. He changed the public’s perception of electric vehicles by making them sleek and fast. Musk and Tesla did it all without ever doing any traditional advertising, in a world in which his competition in the automotive industry spends billions each year on ads.
Now Musk appears to be again betting against conventional wisdom. Tesla has all but stopped engaging publicly with the traditional news media in the US, instead relying on Musk’s Twitter account, the company’s YouTube channel, social media influencers, and direct emails to inform the public. CNN Business reached out to Tesla for comment for this story but did not receive a response.
Communications experts believe the move is ill-advised, and leaves the company vulnerable, especially in a crisis. They described Tesla’s actions as unusual, and perhaps unprecedented, for a major company that sells to consumers.
David Vespremi was Tesla’s director of public relations in 2007 before being laid off, which led to him filing a lawsuit over stock compensation. He is now the vice president of marketing at the automotive company Vonnen, and cautioned that Tesla’s strategy will allow bad information about it to persist.
“If there’s no one on the other end of the phone to debunk them, do those myths take on a life of their own?” Vespremi said. “If there’s no one there to address it other than Elon’s tweets, does that become sort of an unchecked premise that people buy into?”
Bonnie Caver, chair of the International Association of Business Communicators, told CNN Business that there’s risk in not having established relationships with the news media, especially during a crisis.
“If I’m in crisis, I want my voice of truth to be out there as a company, I would want other people besides me telling the truth,” Caver said. “You’re looking for relationships and partnerships to be able to tell that.”
For years, with Musk’s endorsement, Tesla spoke with the traditional news media. The strategy, which is typical in corporate PR, was for Tesla to proactively steer the narrative about the company, rather than simply react to what was said about it, according to a former Tesla communications staffer, who asked not to be named due to the professional risk of speaking out about a previous employer.
“It’s sort of bizarre, I’m still trying to wrap my head around the decision to do away with comms,” said the former employee.
Tesla breaks from the pack
After the news site Electrek reported last month that Tesla had dissolved its PR department, the Public Relations Society of America said in a statement that it was alarmed.
“In a world fraught with instability, disengagement is not a path to success and can result in dramatic reputational ramifications with long-term consequences,” the PRSA said. The society did not respond to a request for comment from CNN Business.
Electrek noted that six people who worked on Tesla’s communications team have either taken on new roles at the company, according to their LinkedIn bios, or departed for communications roles at other companies.
Musk hasn’t been proven wrong to date, and Tesla appears stronger than ever. Its stock is up more than 500% this year, adding an estimated $100 billion to Musk’s wealth. Tesla reported its largest quarterly profit ever in October, and it will join the S&P 500 this month.
Ryan Brinkman, a J.P. Morgan automotive analyst who follows Tesla, said the company has such a mystique around it that it can largely create its own news and control the narrative about it, even if not engaging the traditional news media or advertising.
“Excitement for Tesla is so high, they don’t need anyone else’s assistance,” Brinkman said.
Successful auto companies have been able to dictate in the past how they connect with the public and media. Brinkman recalled how when General Motors had a dominant US market share in the mid-20th century, it would skip the New York Auto Show, North America’s biggest and longest-running auto show, and hold its own well-attended event at the same time.
Embracing the new media world
Tesla and Elon Musk are responding effectively to a changing media landscape, according to Jeffrey Sharlach, who teaches in the management communications program at NYU Stern School of Business. Sharlach said Musk is far better known than the CEOs of other car companies.
Companies used to have two routes to reach the public: buy advertising, or talk to the traditional news media. Now, social media provides a new way to engage with the public, and Tesla has bet that it can reach consumers directly on the platforms they frequent.
Tesla has 1.6 million subscribers on its YouTube channel, and at least 21 of its videos have been viewed more than a million times. Musk has 40.6 million followers on his Twitter account. Musk’s personal audience may be larger than the combined circulation of the 10 biggest US newspapers of a decade ago, according to Sharlach.
By focusing on social media, Tesla also benefits from having a self-selecting audience — these users have opted to follow Musk or Tesla on a particular platform — that’s more likely to be receptive to the company’s messaging than a typical consumers of a traditional news publication, Sharlach said.
Avoiding the negatives
In recent years, a series of company missteps, legal dramas and production challenges have dominated news coverage of Tesla. Mary Ritti, who led communications for six years at the social media company Snap and who drives a Tesla, said that Tesla beat reporters’ focus on these more negative stories, rather than on the company’s innovation. She sees, from Tesla’s point of view, why the company would decide to disengage with reporters.
Ritti said companies benefit from building trusting relationships with reputable journalists who can validate a company as a third party, especially in times of crisis. But when company leaders feel like coverage is consistently negative, they can decide to take advantage of the modern media environment and create its own relationship with the consumer, cutting out the middle man of traditional media.
In Tesla’s case, it has direct communications with the Tesla community through channels like social media or through the in-car dashboard. (Teslas have a screen that shows information and details about the car such as software updates.)
“I could see where Tesla would choose to communicate directly to their community rather than through the media,” Ritti said. “They have all of these customers who are super passionate, love the car and the brand, and will, by word of mouth, tell other people.”
But that dynamic can have consequences when it comes to consumer safety. When Tesla released the beta version of what it described as its “full self-driving” software this fall — a long-awaited, revolutionary feature that Musk said he believed would make Teslas appreciating assets — the news media’s automotive journalists weren’t selected to review it. Instead, Tesla owners, some of whom had previously posted favorable videos about the company on social media, were given early access to the software and permitted to post reviews of it to their personal platforms.
One Tesla owner who has posted videos told CNN Business that he could not talk directly to the media about his experience using “full self-driving” because of a nondisclosure agreement with Tesla. CNN Business could not independently verify what agreements the beta testers have with Tesla, and if they include NDAs.
Auto safety experts say that Tesla’s reliance on enthusiasts to test its product risks consumers being less educated about the technology and its limitations.
“Tesla’s decision to leap frog the custom of giving objective parties, such as the traditional auto press, the opportunity to share their reviews with the public likely results in fewer consumers understanding ahead of time that full self-[driving] and Autopilot are nothing but deceptive marketing labels,” said Jason Levine, executive director of the Center for Auto Safety.
Tesla has warned drivers with “full self-driving” to pay extra attention to the road, and keep their hands on the wheel. The company says on its website that “active safety features are designed to assist drivers, but cannot respond in every situation. It is your responsibility to stay alert, drive safely and be in control of your car at all times.”
The National High Traffic Safety Administration has said that it will monitor the new technology closely and not hesitate to take action to protect the public against unreasonable risks to safety.
“As we have stated consistently, no vehicle available for purchase today is capable of driving itself,” NHTSA said in its October statement.
Even if companies like Tesla don’t engage directly without journalists, they’re still able to influence them, according to Cunningham, who has watched communications evolve since her work with Steve Jobs. The shift has made communications professionals a lot more like advertising professionals, she says. If a company controls its “digital footprint” today, Cunningham said, journalists are likely to follow it, as they’ll Google the topic and people they’re writing about.
“We just have so much more control over messaging today than back in the Steve Jobs era,” she said.
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