MARCH 2013
M A R K E T I N G
PRODUCED BY
I N S I G H T S
F R O M
M O T O R S P O R T S
I N S I D E R S
WELCOME TO REFUEL,
JMI’s e-newsletter designed to highlight the best from our world of motorsports marketing. In each edition we will share our latest client work and hear from industry experts, marketing communications leaders, and sports business personalities. Each edition looks at new trends and gives assessments and perspectives on the opportunities and challenges within our industry. With the Daytona 500 now in the rear view mirror and the Australian Grand Prix set to start the 2013 Formula 1 World Championship, this year’s global motorsports season is underway. From a series standpoint, Formula 1 continues to dominate as one of the most successful global sporting series, entering new and developing markets and drawing major brands. NASCAR started its season in the best possible way with TV ratings for the Daytona 500 up by 24 percent. The quest for NASCAR to ink the rest of their television contracts will be an area to watch, while many marketers anticipate seeing the full potential of the series’ enhanced digital and social media initiatives. It’s going to be an exciting season for one the best sports and live entertainment platforms in the world. Cheers,
Zak Brown, Founder & CEO
JMI helped Farmers Insurance launch a cutting-edge website ahead of this year’s Daytona 500. The website represents a recalibration of its digital and social media agenda for the 2013 NASCAR season. See how Farmers Insurance is leveraging their sponsorship of the No. 5 Farmers Insurance Chevrolet, driven by Kasey Kahne.
UPS made a splash as JMI helped them enter the world of Formula 1 with Scuderia Ferrari. Accompanied by a launch viral – UPS capitalized captured the essence of the partnership masterfully. CLICK HERE TO SEE THE VIRAL LAUNCH
CLICK HERE TO READ THE PRESS RELEASE
NEWS NASCAR television ratings for the Daytona 500 were released illustrating the best start to any NASCAR season since 2008. This is a great early indicator of interest in the 2013 NASCAR season. Sunday’s race earned a 9.9 rating and 22 share on FOX; a 24 percent increase from the 2012 Monday night prime-time race. CLICK HERE TO VIEW
Danica Patrick also played a part in creating the highest rated Daytona 500 in recent memory. The first woman to win the pole and lead a lap at the Daytona 500 was a watershed moment in NASCAR history. The fact that Danica Patrick is an emerging global figure with immense marketing power created the perfect promotional scenario in the week leading up to the Daytona 500. CLICK TO VIEW
NASCAR gave UPS the green flag in sustainability in Daytona as it upgraded its Trackside Services operation for the 2013 racing season. CLICK TO READ MORE
Discussion of a Formula 1 Grand Prix in Mexico City was confirmed. The race would take place at Mexico City’s Autodromo Hermanos Rodriguez, which last hosted an F1 Race in 1992. CLICK TO READ MORE
THE DIGITAL CANVAS S T E P H E N
G I L L E S P I E
S E N I O R D I R E C T O R , D I G I TA L , J M I
CRAFTING A DIGITAL STRATEGY IS AS MUCH A SCIENCE AS IT IS A WORK OF ART. WHILE NO ONE PERSON OR AGENCY CAN HONESTLY SELFPROCLAIM THEMSELVES A DIGITAL REMBRANDT, THERE IS A RAPIDLY GROWING KNOWLEDGE BASE. OVER THE PAST FEW YEARS, DIGITAL MARKETING HAS PROGRESSED FROM A PAINT-BY-NUMBERS TO A MUST-HAVE ON THE PALETTE OF ANY MARKETING STRATEGY.
OF GLOBAL MOTORSPORT FANS INDICATE THAT THE INTERNET IS THE MAIN SOURCE OF INFORMATION ABOUT SPORT. THIS NUMBER IS 63% FOR THE GENERAL POPULATION. THE HIGHEST USAGE NUMBERS ARE SEEN IN ASIAN MARKETS.
MOTORSPORT FANS ARE
MORE LIKELY THAN THE GENERAL POPULATION TO USE MOBILE DEVICES FOR SPORTS INFORMATION (SUCH AS IPAD, SMARTPHONE AND APP USAGE).
OF ALL MOTORSPORT FANS INDICATE THEY USE SOCIAL MEDIA SITES SUCH AS FACEBOOK, TWITTER AND YOUTUBE FOR INFORMATION ABOUT SPORT.
WHILE SMALLER PERCENTAGES OF FANS OVERALL INDICATED RELIANCE ON TEXT (SMS) AND OR PICTURE (MMS) MESSAGING FOR SPORTS INFORMATION, MOTORSPORT FANS OVER-INDEX THE GENERAL POPULATION. Sources: SDNA – May Wave 2012, aggregate of 18 global markets
OPPORTUNITIES Consumers today have a plethora of screens constantly at their disposal – mobile, tablets, laptops, desktops and televisions – and can use them to watch, interact with or supplement their sports entertainment event of choice. It’s commonly referred to as the potential of multi-screen and it presents one of the biggest opportunities in digital today. Brands have the opportunity to be in front of consumers with an unprecedented degree of frequency with digital because everyone is within range of a device – but brand loyalty goes deeper than ‘liking’ or ‘following’ or subscribing to a branded microsite. Great strategies are born of pragmatic ideas that serve the fans’ desires to constantly enhance their sports entertainment experience at their venue of choice.
CHALLENGES Creating integrated digital platforms that serve a purpose while being compatible across all devices is an important step, but it is certainly not the end. Today, consumers are at the forefront of the market; this makes content vitally important, and the quality of that content must resonate with the fans’ perception of their sport. Every sport or entertainment venue possesses its own unique micro-culture with its own rituals, languages and truths. The content, especially in social media platforms, was first created by the members of the micro-culture; they have a sense of ownership and a demand for authenticity that must be met. Frauds and commercial entities distributing inauthentic content will be ignored at best and publically exposed and flogged at worst. So yes, authentic content matters. Companies that speak the unique dialect of a given sports micro-culture and truly become a part of the sport can win over fans and effectively communicate their brand messaging.
THE FUTURE The bandwidth to supplement sports entertainment is now enhanced. New assets are developing and will continue to open opportunities in sports entertainment. Sporting series are rushing to develop these assets for the future because they need to offer sponsors a platform. They also need to be the first to secure the rights and develop the space within the consumers’ rapidly evolving habits. Sponsors will play a key role in uncovering the topics that fans want and delivering original content that resonates with the audience. At a local level tracks will look to incorporate digital into their facilities – better Wi-Fi and mobile networks, more televisions throughout the facility, and location aware technology will play a key part in underpinning fans awareness of activities at events, like car speed, position and standings. The possibilities are endless for an industry like motorsports; that’s what makes it exciting – keeping brands on the cutting edge and always pushing the needle to unlock the next great development.
The most successful Daytona 500 since 2008, the race saw a 24 percent increase in ratings over last year.
DAYTONA 500 THE NASCAR BAROMETER WITH JOIE CHITWOOD, PRESIDENT OF DAYTONA INTERNATIONAL SPEEDWAY
SUPER BOWL OF NASCAR
1ST
14%
2ND
8TH
BRAND EXPOSURE VALUE
TOTAL SEASON EXPOSURE
CANNOT MISS ON TV
HIGHEST RATED PROGRAM
AMONG ALL MAJOR LEAGUE SPORTS MARQUEE EVENTS
COMES FROM THIS SINGLE RACE EVENT
SPORTS FANS SAY SUPER BOWL AND DAYTON ARE TOP EVENTS
ACROSS ALL SINGLE EVENT TELECAST FOR THE YEAR
Sources: Repucom QI Exposure Database, Repucom SponsorLink Study, Nielsen
Q
WHAT TYPES OF ENHANCEMENTS ARE CURRENTLY UNDERWAY AT DAYTONA INTERNATIONAL SPEEDWAY FOR 2013 AND BEYOND?
We now have a relationship with American Tower; they are providing an additional antenna system on our property. That will enhance cellular coverage, which is a big deal for us because of the capacity we have. We hope to gain approval for improvements at Daytona, which may include upgrades to the front stretch grand stand area and amenities – points of sale, social zones, seating amenities – to enhance the fans’ experience overall. Competing with the increasing quality of in home theatres is a challenge; we’re improving technology, but we’re also getting the basics right with seating comfort, food and beverage, parking and traffic lights.
Q
WILL THE SIMILARITY BETWEEN THE RACECAR AND PRODUCTION CAR OFFER A BETTER MARKETING PLATFORM FOR MANUFACTURERS?
Years ago, before the car of tomorrow, you had as many fans of the manufacturer as you did of the drivers; when the car became uniform, that aspect went away a little. Having fans of the manufacturers is as important as having fans of the drivers; it’s something that people want and I’m happy that NASCAR listened and responded appropriately.
Q
A
WHAT WENT THROUGH YOUR MIND LAST YEAR AS THE CHECKERED FLAG DROPPED ON AN EPIC MONDAY NIGHT DAYTONA 500?
Relief. We had never rained out an event and that was the first time we ran on a Monday; running under the lights in prime time for the Daytona 500 was pretty big – then we had the jet dryer blow up. It’s an emotional event anyway and when you add the weather, the reschedule and then a major incident; relief was the one thing on my mind when the checkered flag waived.
Q
A
A
HOW HAS SOCIAL MEDIA CHANGED THE WAY YOU MARKET?
I don’t know if anybody thought that Brad Keselowski’s Daytona Tweet would have generated this social storm. It’s an opportunity to engage our customer in a one to one manner; we’ve never had that before. You have to step up to make the transaction or engagement, which requires unique content and the ability to keep fans focused on your brand. We can incorporate our partner into our messaging when it’s appropriate and that is key; but we struggle with how it will satisfy our business goals, which is selling tickets. We are all coming up with great campaigns, spending resources behind it, now we are looking to measure it and determine the effect it has on our business.
A
The 2013 FORMULA 1 ROLEX AUSTRALIAN GRAND PRIX will mark the beginning of a much-anticipated season.
formula numbers ALED REES, SENIOR VICE PRESIDENT, STRATEGY & CONSULTANCY
THE 2012 FORMULA 1 GLOBAL BROADCAST NUMBERS SHOW THREE KEY TRENDS IN THE FORMULA 1 AUDIENCE:
There was a large increase in traffic to the Formula 1 website. A total of 67 million users came to FORMULA1. COM, an 18 percent increase on 2011 and a 45 percent increase since 2009. The power of digital is undeniable and the potential for F1 remains significant, even if the issue of content rights remains complex.
The global reach of F1 decreased by only three percent to just over 500million. F1’s dip is slight and mostly attributed to the decrease of viewership in China.
Formula 1 saw an increase in cumulative viewership going from 1.8 billion to 2.1 billion. A closer look at this increase reveals that viewership spiked at the season’s end and was sustained throughout the championship, which was still up for grabs between two of the most popular drivers, Sebastian Vettel and Fernando Alonso of Red Bull Racing-Renault and Ferrari respectively.
Q
WHO DO YOU THINK WILL BE THE FORMULA 1 WORLD CHAMPION IN 2013?
It’s going to be very close, in my view, between Ferrari, Red Bull and McLaren. There are unique circumstances around this year’s championship. It’s the last one of the current technical formula and the rules will change significantly for next year with a new 1.6 litre V6 turbo engine. This means two things: that it’s hard to find performance gains in the current cars, so the field will close up, and also that teams will have to devote a lot of resources to next year’s car while this year’s championship is still going on. I think Fernando Alonso and Sebastian Vettel will dispute the title to the end and that Alonso will win it this time.
A
FORMULA 1 PREVIEW
™
WITH JAMES ALLEN OF JAF1.COM
Q
WHICH TECHNICAL CHIEF DO YOU EXPECT TO BE THE BIGGEST DIFFERENTIATOR IN 2013?
These guys are becoming the rock stars of F1 just as much as the drivers. James Allison at Lotus is very innovative, especially as he works with a smaller budget than the Ferrari and Red Bull engineers. Of course Adrian Newey is the gold standard for F1 engineers, but he’ll find it hard to improve on what he’s done before. So I’d go for Pat Fry at Ferrari. He has reorganised the technical department and I think it will come good for them this year.
Q
A
WHICH GRAND PRIX ARE YOU MOST LOOKING FORWARD TO AND WHY?
I always love Monaco as it genuinely lives up to people’s stereotype idea of it! Monza is always special because the Italians love their F1 and the passion is palpable. But I also think Austin, Texas has made an instant impact in its first year and I can’t wait to go back there – so I’d say Austin.
A
Q
WHO WILL BE THE BIGGEST SURPRISE OF THE SEASON?
Valterri Bottas in the Williams. It’s been a while since a rookie came in and really shone. No one knows much about him in F1 terms, but he’s very quick and has also been consistent in the junior formulae. He’s also a Finn, and one of the mentally tough ones, so he should cope with the pressure of F1 pretty well.
Q
A
WHICH TEAM DO YOU EXPECT TO BE MOST IMPROVED?
Mercedes. They have hired the fastest driver in F1 in Lewis Hamilton and he will bring the best out in teammate Nico Rosberg. The team scored just 142 points last year - I think they will get over 250 this year and win a race or two.
A
4.4 BILLION ANNUAL BUSINESS
25 153 215 270 358 400 470 690 760 1 MILLION MILLION MILLION MILLION MILLION MILLION MILLION MILLION MILLION BILLION COST TO BUILD SINGAPORE CIRCUIT (2011)
SPENT IN PADDOCK CLUB HOSPITALITY
COST TO BUILD INDIA CIRCUIT (2011)
SPENT ON TRACKSIDE ADVERTISING
RED BULLS ESTIMATED VALUE EARNED THROUGH SPONSORSHIP (2010)
COST TO BUILD SHANGHAI CIRCUIT (2004)
COST TO BUILD SINGAPORE CIRCUIT (2011)
FORMUALA ONE TV RIGHTS (2010)
SPENT ON CAR SPONSORSHIPS (2010)
IN FOM TURNOVER (2010)
2013 NORTH AMERICAN OUTLOOK A Q&A WITH TRIPP MICKLE, SPORTS BUSINESS JOURNAL
RATES IN THE TOP 10 FOR TOTAL EXPOSURE.
CASUAL FANS NAME AS THEIR FAVORITE DRIVER.
DALE EARNHARDT JR. AVID FANS NAME AS THEIR FAVORITE DRIVER. Sources: Repucom Sport24 Database and Repucom SponsorLink US
Q
WHAT DO YOU SEE AS THE BIGGEST BUSINESS STORY IN NASCAR THIS YEAR?
The TV contract with ESPN and Turner is the most important thing on NASCAR’s business calendar in 2013. The sport managed to get a 30 percent increase in TV rights money from FOX for the 2015-2022 period. Can it do the same with the last 23 races of the year? Will it sign a deal with three TV partners again, or reduce the number to two? That’s all going to play out in the next six months.
Q
IF YOU HAD TO DIRECT A POTENTIAL SPONSOR TO THE ‘BEST MARKETING OPPORTUNITY IN MOTORSPORTS’ WHAT WOULD THAT BE?
The most valuable asset out there right now are the 13 races on the No. 88 car. Dale Earnhardt, Jr. is incredibly popular. For the right brand looking to grow market share and willing to pay a premium to do so, signing on as a co-primary sponsor seems like a great opportunity.
Q
A
INDYCAR HAS REALLY TRIED TO SHAKE THINGS UP THIS YEAR WITH NEW TRACKS AND DOUBLEHEADERS; DO YOU THINK THIS WILL BOOST RATINGS, ATTENDANCE AND/OR SPONSORSHIP FOR THE SERIES?
The idea of doubleheaders should help attendance, but it’s unlikely that it will affect ratings and sponsorship. The sport is going to need to develop some new stars or raise the profile of its existing drivers if it’s going to make any headway on the ratings front.
Q
A
ARE NASCAR’S BEST DAYS IN THE PAST?
I don’t believe so. It swelled in popularity so much during that period that it will be hard to replicate that. Does that mean its best days are behind it? No. It’s still a big sport with a huge fan base. What it needs to do now is do a better job of engaging and diversifying that fan base, and it’s taking the correct steps to do that.
Q
A
A
HOW DO YOU THINK DIGITAL AND SOCIAL HAVE CHANGED THE BUSINESS SIDE OF MOTORSPORTS?
Digital and social are where companies want to be. Because they’re decentralized and the drivers are more popular than the teams, motorsports were slower to develop a game plan for digital and social than stick-andball sports. Properties, teams and drivers are trying to reverse that now by making investments in that world. This year will be an important one as everyone watches how NASCAR’s investment in its digital operations pays off.
A
THE STATE OF NORTH AMERICAN MOTORSPORTS Z A K
B R O W N ,
F O U N D E R
&
C E O ,
J M I
At JMI, we have made the economics of motorsports sponsorships our business for nearly two decades. In the late 90s and early 2000s the discussion around North American motorsports, especially NASCAR, indicated its success was unstoppable. Fast forward 10 years and find that the reporting on the economics of our sport has done a 180 – teams can’t find sponsorship, series are struggling to stay afloat and the American public has lost interest in racing. The truth can be found somewhere in the middle of these two narratives. What we have witnessed over the last ten years isn’t a failure of motorsports, it’s not the ‘fall of NASCAR’ or the ‘blunders of IndyCar,’ and it’s certainly not the well running dry. This is a shift in consumerism – attribute it to changing technology and the economy – the way people consume information and spend money has changed dramatically over the past decade. As a result there has been a shift in how series and teams do business, there is a marked difference in how they seek fans and there is a change in how brands, like our clients, spend against and use racing assets. We have been through an economic downturn; let’s not lose sight of that. Fans have less dispensable income and as a result we have seen a dip in ratings and attendance but the decrease is marginal – NASCAR is still the second most watched spectator sport in North America with average attendance of 100,000 fans and an average race viewership of 5.8 million. Most professional sports in America, minus the NFL, have experienced a decrease in attendance, ratings or both.
Networks still value, and pay top dollar for, those numbers; that helped NASCAR secure a major deal with Fox and IndyCar land a valuable deal with NBC Sports. NASCAR’s renewal was certainly a positive sign for North American racing; Fox renewed their deal early, marking the first increase Fox has paid in more than a decade for its NASCAR rights upping the purse to $300 million in 2015. It’s not just about television and live attendance anymore; those are just two pieces of the puzzle – nearly one out of four avid fans follow NASCAR via a mobile device. This allows fans to ‘watch’ the race when they can’t watch the race and it is impacting how brands, race series and teams are seeking fans. A fan can easily keep up with race action, and get exclusive information, via Twitter. Social media offers direct interaction with fans; many brands would argue that is something that you can’t get with a television audience. That is why so many brands in motorsports are shifting their focus to social media and mobile marketing. CLICK HERE TO READ THE FULL LENGTH VERSION
I N D I A N A P O L I S
|
L O N D O N
|
H O N G
K O N G
Š2013 Just Marketing International