Marketing, Promotional and Advertising Costs
Marketing, promotional and advertising costs are expensed as incurred and are included as an element of selling, general and administrative expense in the consolidated statement of operations. Marketing, promotional and advertising costs were immaterial for the years ended December 31, 2021, 2020 and 2019.
Recently the media reported that SpaceX is buying ads on Twitter. Therefore I am creating this slightly different market (because this one is easily auditable!) that will resolve to YES if Tesla has material advertising costs on their SEC Financials.
For comparison, Ford reported $3.1B in advertising spending in 2021 and General Motors spent $3.3B.
As always, I won't bet.
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Search for advert in 10 K just reveals
Sales and Marketing
Historically, we have been able to achieve sales without traditional advertising and at relatively low marketing costs. We continue to monitor our public narrative and brand, and tailor our marketing efforts accordingly, including through investments in customer education and advertising as necessary.
Resolves no I think @MP
Can you clarify exactly what will resolve this yes? If Tesla discloses in their 10k that they spent money to advertise, will this resolve yes? Do they have to actually specify a number? Thanks @MP
@GabeGarboden the wording here is reporting" advertising spending. Rarely a company reports they've done something but the values are imaterial, so I'd be very surprised if the content of your question were to come to matter. That said, in the unusual situation where they say they did advertising but it wasn't material to report the numbers, this market resolves to NO.
For 2023 I think they will change the 2022 note
"Sales and Marketing
Historically, we have been able to generate significant media coverage of our company and our products, and we believe we will continue to do so. Such media coverage and word of mouth are the current primary drivers of our sales leads and have helped us achieve sales without traditional advertising and at relatively low marketing costs."
in a minor way to something like
Sales and Marketing
Historically, we have been able to generate significant media coverage of our company and our products, and we believe we will continue to do so. Such media coverage and word of mouth are the current primary drivers of our sales leads and have helped us achieve sales with relatively low advertising and marketing costs.
If the advertising is a material amount, which I doubt it will be, [edited] perhaps there is a disclosure requirement requiring it to be reported in the financial statements[/edit] It is possible some sort of rough figure will be mentioned in the earning call or in some other way, but is that considered to be "Tesla report"ing it? Seems more like discussing it not reporting it to me.
[edit to add]
Ford reported $2.2 bn advertising on revenue of $158bn and loss of $1.8bn so I would say 2.2bn does look to be material.
For Tesla with revenue say ~$95bn and profit of $10bn so probably unlikely to be reported unless over $500m (or even $1bn) and I doubt it will be that much.
@ChristopherRandles companies are required to report advertising spending separately from sales and marketing. I'm not sure what constitutes materiality though
@MP No hard rules on materiality, it can depend on circumstances. As rough guides: 1% of Revenue 10% of net income 1% of total assets. These are typical guides used in UK and I doubt US is much different. Hence my suggestions of it could be $500m or even $1bn to be material in Tesla case. They could of course choose to disclose it even if they are not required to. Clearly Tesla hasn't reported it in the past other than to say it is not material so presumably it is only a required disclosure if it is material.
Above was more me providing information.
My question was more about the meaning of "report" in the question. Producing accounts is known as "financial reporting". A comment at an earnings call that happens to give information is clearly not a 'financial reporting' requirement (or at least if it was a requirement, it would be in financial statements) so it seems to me an earning call comment is just a comment not a "report". Others might view this differently and think an earning call comment is 'reporting the amount of advertising'. So it seems sensible to clear up what will be considered as 'report'ing advertising.
https://www.cnbc.com/2022/11/14/spacex-just-bought-a-big-ad-campaign-on-twitter-for-starlink.html
SpaceX just bought an ad campaign with Twitter; I'm unclear if they've advertised before, but they're definitely not a big ad spender, so this is almost certainly driven by Musk wanting to bring advertisers back to Twitter.
