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Excerpt from Chariots For Hire,
By Brad Niemcek
"Racing on Television. It's Great. Its Boring."
This should be a time of great exultation in auto racing, no matter who you are - promoter, sponsor, participant or fan. The age of racing on television has finally arrived. The most powerful medium ever conceived is bringing the sport into America's, and the world's, living rooms.
All four of the big networks carry racing event coverage on a regular basis, the sport is a programming staple on a number of Cable TV channels and it even has its own home, The Speed Channel. There is so much of it on television these days that one of racing's elder statesmen, print and broadcast journalist Chris Economaki, worries that it may be getting overexposed - more racing on television in a single week in 2002 than in all of 1982.
All this exposure is a boon for those concerned about sponsorship because it has long been an article of faith in the business that television coverage signaled the importance of a sports event, and "event importance" is a key factor in determining the value of sponsorship opportunities for status-conscious multinationals. The logic is simple: If television feels a sport is important enough to televise, it is. So television coverage of a sport has long been seen as a way to justify the rightness of a decision to become involved in it.
Television coverage also brings another significant benefit to the sport's sponsor hunters - accountability. Racing has long needed a yardstick by which to be measured, a yardstick that dispassionate advertisers respect. It now has that, at least indirectly, in the use of data from Nielsen Media Research, a company whose estimates of television viewing have guided billions of dollars of advertising expenditures for decades. Advertisers rely on Nielsen numbers to provide them with a way to plan and evaluate the way they spend their money on television. Joyce Julius & Associates, a research firm in Ann Arbor, Mich., has devised a way, using Nielsen numbers, for sponsors to quantify the exposure they get on racing telecasts.
The Julius & Associates method is straightforward. It tapes the racing coverage, then reviews the tapes for the appearance of sponsor names, both visual and spoken, and calculates what an advertiser would have to pay for an equivalent amount of advertising time. There are reasons to quibble about this system, as there are about Nielsen numbers in general. But it has gained wide acceptance, even among veteran media analysts.
Critics in both the industry and academia have argued for years about whether it is possible to compare the value of television exposure in a commercial with exposure gained through public relations activity. Ad people point out that exposure of a logo on a racing car simply cannot convey the kind of carefully crafted message that is transmitted during a thirty second commercial. Ah, the public relations folks respond, there are studies that show that editorial exposure is often much more credible to consumers than a paid ad.
John Raven, manager of media and strategic communications for Mazda in North America, has heard all the arguments. He finds the Julius and Associates service useful but cautions that its numbers should be evaluated carefully. Is thirty seconds of logo exposure for Mazda, something less than a household name, worth as much as thirty seconds of exposure for Coke or Budweiser? He doesn't think so. But, he adds, "most companies in motorsports, I'd like to think, are using the numbers intelligently."
One thing the Julius and Associates numbers make clear is that some forms of racing are better than others in terms of raw consumer exposure. They demonstrate on a weekly basis that the TV payoff for the sponsor of a front-running car in NASCAR is lot better than it is for a winner in an American LeMans Series sports car race. During the 2002 season, the math was simple. A NASCAR race on the Fox Network might capture a ten rating (more than ten million homes); An ALMS race on the Speed Channel would capture two tenths of a percent of Cable TV households (about 100,000 homes). What those data do is help establish a rate card for racing sponsorship.
Is a NASCAR telecast viewer worth the same to a sponsor brand as the more upscale sporty car enthusiast watching an ALMS race? That obviously depends on a lot of things, not least of which are the target market and the strategic goals of the sponsor, a subject that will be pursued elsewhere in this book. Whether a sponsor chooses NASCAR or another venue, one thing is obvious: To achieve the unique loyalty-building benefits now widely recognized as major effects of a tie-in with motorsports, and to attempt to do it on television, a sponsor must be visible to the television viewer. And that means he (or she) must be the title sponsor of the event or the principle sponsor on a reasonably competitive car.
A Sponsors Report by Julius and Associates on an ALMS event at Sears Point International Raceway in the fall of 2002, provides an instructive guide for the prospective sponsor on how one achieves television exposure in a racing telecast. It identifies a number of "sources" of sponsor exposure, including:
- Verbal references by the race commentators - obviously, contending cars get more.
- Graphics associated with the running order - spending money with the broadcaster helps.
- Graphics in the final results - contending cars get better notice.
- Vehicle identity in view of an in-car camera - on-car graphics are critical.
- Telemetry (sponsored graphic associated with the display of car performance data - spend more money?
- Car identity - only important, perhaps, to the car companies.
- Driver uniform graphics - self explanatory.
- Pit signs - a reminder that all team equipment should be carefully "branded."
The Julius Report notes that Audi, sponsor of the runner-up car, achieved more exposure during the broadcast than any other sponsor although, interestingly, it does not report on exposure achieved by the events presenting sponsor, Foster's Lager. And, it does not mention the fact that Audi helped bankroll the time-buy that made the event telecast possible.
Sponsor underwriting of television broadcasts is nothing new, of course. That's how commercial television began. What is new in recent years is how common it has become for corporate sponsors to work with race organizers to buy their way onto television. Historically, the relationships between sponsors and the networks have been less explicit, in racing and in other sports, though sponsors have been known to assert themselves.
John Kelley, former vice president of advertising for Goodyear, recalls his frustration at the reluctance of ABC and the Indianapolis Motor Speedway to air the Indy 500 live. Goodyear came to Indy as a tire supplier in 1965, intending to break Firestone's string of 44 straight victories. Goodyear won for the first time two years later. By 1980, Goodyear wins were coming regularly and Kelley wanted to link an Indy victory by Goodyear's newly re-branded Eagle racing tires to its premium line of Eagle passenger car tires. He had to convince a reluctant Tony Hulman, the grand old man of the Speedway, that the Indy 500 was too important an event to be tape-delayed, even though an evening time slot meant better ratings. The Speedway broached the idea to ABC and the network, its risk minimized by an advertising revenue guarantee from Goodyear, finally made the transition from same-day delayed to live status in 1986. That investment by Goodyear, supported by an innovative "next day" print and broadcast advertising campaign, provided a tremendous boost for Goodyear's Eagle tire line.
"How well did it work?" asks Kelley. "It worked so well that Ford started calling us, requesting that we make Eagle tires available for the Mustang. Ford actually called us!"
Since the late 1990s, buying one's way onto television has been the norm in racing and the world's major auto makers were the most important players, both here and around the rest of the world, even at the highest levels of the sport. In 2002, CART reportedly paid up to $200,000 an hour for live broadcast network time for coverage of its Indy Car events. Federal Express, which ended its role as sponsor of the CART championship at the end of that season, picked up a major part of the tab.
The exceptions to the time-buying trend included NASCAR, major drag racing events of the National Hot Rod Association (NHRA) and the Indy Racing League (IRL). NASCAR's carefully-nurtured properties have become so popular that TV rights money in stock car racing flowed the other way, becoming an important secondary revenue source for track owners and NASCAR as well. NHRA's major events have been TV staples for years. It was the first racing organization to take television into its own hands, producing event coverage and organizing the distribution of the broadcasts through barter syndication (via individual stations, which receive the program for free and retain commercial minutes inside the show).
Has NASCAR's growing success meant all was hunky-dory in stock car racing? No, grumbled one NASCAR Winston Cup team sponsor in 2002. "If a company is not willing to buy ads on a Fox Network race broadcast, it gets ignored during the broadcast. It's extortion, that's what it is." Most team sponsors take a more benign view of the arm-twisting they get from the networks, knowing that it is a good idea to spend money in support of their sponsorship investments. That is true even if in some cases it means their "we're in this for the 'free' television exposure" sponsorship rationale no longer applies. The arm-twisting by the networks didn't end there either. The TV guys have begun charging sponsors to put a camera in the cars they sponsor, a practice that could easily become corruptive of the integrity of the event coverage.
It is reasonable to ask whether race organizers any longer need to cede so much control to the folks in the TV trucks. The most spectacular example of a racing organization that decided to take control of its television coverage, and has profited mightily from that decision, is Formula One racing, whose estimated aggregate world television audience for the 17 events in the World Championship each year tops 50 billion viewers. The credit for the decision belongs to canny Englishman Bernie Ecclestone who wrestled control of Formula One racing, and its television rights, away from French racing authorities in the early 1980s. Even Ecclestone, whose commercial success with Formula One made him one of the ten wealthiest men in Great Britain in the 1990s, does not have a perfect record in television, however. His efforts to supplement broadcast television coverage with special, pay-per-view coverage packages for especially rabid fans were disbanded after a disastrous 2002 season. Nonetheless, the fact is Formula One was in control its destiny on television, because it owned it.
Whether NASCAR coverage can sustain the steady growth in ratings it has enjoyed over the past several years or not is an open question. But as this is written, it is the leading racing attraction on television, with all events of its major series appearing on CBS, NBC, Fox, TNN, FX and the Speed Channel. Indy Car events of both the CART and IRL variety appear on all three of the "letter" networks and ESPN. And various other racing events, and a lot of racing-related programming, appear on the two Cable TV networks noted above, and others. That's a lot of coverage, but television has discovered that covering racing is good business.
For sponsors and the people who sell to them, this would seem to be no time to complain. Television showcases the ever-growing corporate involvement in the sport, and the marketing, promotional and sales successes that participating companies derive from it, provide eloquent testimony of what sponsor-hunters have been saying for decades. With TV coverage, the sales job is much simpler; an investment in racing no longer takes the "great leap of faith" that it once did. But does the appearance of a racing event on television signify the importance of the event as it once did? Clearly, it does not. The Cable TV network coverage of events in the Barber Dodge series is a case in point. Essentially a series of rent-a-car club races for journeymen drivers, the Barber Dodge series would not be on television unless Dodge paid to put it there.
Again, with all this demand for racing by sports TV programmers, one would think racing had finally achieved the status it has long thought it deserved. The sport - if one is inclined to consider it a single sport - has indeed solved its TV "distribution" problem. But is the race coverage of sufficient quality? Can it be judged good enough to help build a larger audience among new fans? For an answer to that question, ask your mother, or your wife. Or, to eliminate any gender bias, ask the golf fanatic who lives next door. Non-racing fans are usually pretty blunt about it: racing is boring. They know it's boring, they'll assure you, because they've seen it on television.
If the opinions of your mother, your wife or the guy next door concern you, racing has a problem. Either racing is boring to all but hopeless gear heads, or it is television's fault - television doing to racing what airlines do to food. There are two ways boring racing on television can be fixed. One - fixing the racing - is already working, in stock car racing.
How can the racing be "fixed?" Most observers agree that NASCAR's success on television is the stability of the stock car racing business operated under the firm control of NASCAR. Compared with the political pushing and shoving found in other types of racing, and especially in the internecine battles in Indy Car racing for the past decade or so, NASCAR has been a haven of stability. Many would say, with justification, that that is the way Bill France, Sr., planned it way back in the 1950s.
"Stability" as practiced by NASCAR is designed to result in parity among competitors. It is successful to a degree that the National Football League might admire. NASCAR maintains this parity, in part, to protect itself from the big players in its sport, Ford, General Motors and Chrysler. And, this parity also protects NASCAR from the people who design the television coverage of its events. To put it bluntly, NASCAR produces closely-fought races that make exciting telecasts because it has no faith in television to do that job. It's worth noting that the margin of victory in the very first NASCAR event back in 1949 was four laps. The car was found to have been illegally modified and was disqualified. No such runaway victory by a NASCAR competitor would be possible today.
All racing organizers, the so-called sanctioning bodies of the sport, create rules intended, at least in part, to provide a level playing field for competitors. But no one practices the week-to-week rules "tweaking" in which NASCAR has indulged over the years. So, the secret to producing more exciting race telecasts for other sanctioning bodies lies in improving the television coverage, if not the racing. Given racing's increasing control over its telecasts in recent years, one would wonder why it has not tried to do that.
"Fixing" the way racing is telecast, the alternative to tweaking the racing itself, is obviously not an easy job. Most of the production design considerations in race telecasts are cost-related. Racing is expensive to cover because of a problem it shares with golf, the breadth of the field of action. But, unlike golf, racing provides few compensating creative opportunities, such as the languid study of a player, up close and personal. Racing moves too fast, it provides too many potential points of focus and it produces a noisy energy that television dilutes rather than accentuates. To top it off, racing wraps its heroes in fireproof apparel and then encloses them in mechanical envelopes so that they can hardly be seen by viewers. Those are depressing realities for someone intent on capturing the essence of racing for broadcast. Most producers do not try. But some have. Berry Landen did, years ago. (End of TV chapter excerpt)
What Chariots For Hire will also cover:
Overview
Who sponsors and why
The history of sponsorship
How auto racing is different
Why companies invest in sponsorship
How companies use sponsorships
How corporate goals can vary
How sponsors choose sponsees
Exploring the three principle benefits of sponsorship
Media exposure
Brand/corporate image enhancement
Internal communications/motivation
Organizing for success
How sponsor partners establish a winning relationship
How sponsor partners maintain a winning relations
How sponsorship programs are evaluated
Structuring sponsorship deals
-Standard terms
-Deciding who does what
-Identifying and mitigating risk
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