Lessons IndyCar can learn from the heyday of CART
The key thing back in the 1980’s and early 1990’s was that all CART races were very well promoted, thanks to huge support from Marlboro, PPG, companies like Texaco-Havoline, Budweiser, RC Cola and others. All these companies paid significant sponsorship fees but most importantly also spent large amounts promoting their involvement in the community, with adverts, billboards and lots of media activities featuring drivers and celebrities.
Most importantly, these promotional activities started several months out so that the event had a long time to come to the public’s awareness. (No last week marketing to people who had already made plans to do something else on race weekend). Also, the multiple local companies involved were also encouraged to promote their own involvement in the race, through advertising, word of mouth, discounted ticket sales to their employees and customers and by other means.
The rationale that was stressed was that the more their customers saw them involved, the greater their stature would be in the community for supporting the event. So the event was just that, a major activity involving city politicians, business leaders, charities and lots of smaller companies. Another element is that when money was available promoters were able to begin awareness marketing several months ahead of an event, and did not leave so much of their advertising to race week.
Consequently a promoters advertising spend would be leveraged multiple times by the series and event’s sponsors and corporate customers.
Everyone in town knew the event was happening.
This all changed during the mid 1990’s when the cigarette companies went away and companies like PPG ended their major involvement when Tony George split the sport and destroyed it. Also the CART owners, having lost the Indy 500, arranged to keep much of the income that previously went to the track through increased sanction fees and demands for specific sponsor rights. They had also previously paid the promoters for things like RV spaces, on-site catering, etc., but all that went away over time. So the revenues to the promoters cratered and their costs increased to the point where they relied on previous events and loyal fans to attend, spending marginally on real promotion and advertising, an failing to draw new fans. At the same time NASCAR got their act together and drew most of CART’s major sponsors away from the series and from individual events, making it so much more difficult for them to earn valid profits.
It does not appear to me that Indy Car racing has recovered many of these revenue streams, especially for their event promoters.
I wonder whether events today have the ability to promote themselves to the extent of those back then, when all this additional money was available?
Another point. Indy car (generic, not reflecting on the current ownership) was once a tremendously exciting weekend of activity with very little down time on the track. There were many support events and lots of activity for the fans in the seats to watch. This changed significantly mid 80's when CART operations demanded long no-action periods prior to the race itself, sometimes as much as two hours, during which the fans saw nothing of interest. Their rationale was that they could not delay the start of the race to repair damage from a previous event, but any decent track operator could repair almost anything in a remarkably short time, if they knew what they are doing).
The start line ceremonies now seem to take forever, but they are only visible to the fans in the stands opposite the pits and not to spectators around the track who have nothing else to watch. Sure these pre-race activities are great for the in-crowd in pit lane who then go to watch the race on TV in their hospitality suites, but are they really necessary to the extent that they now seem to have expanded? Events need to be structured to appeal to the majority of the spectators, not just to the in-crowd of VIP's corporate sponsors and teams.
Witness Fontana where it seems as if there will not be any support events.
The racing in current Indy Car is great and the drivers are spectacular, but, they are really only known to the true fans and not to the general public. The retirement of the big name Unser's, Andretti's (sure there is Marco but he is just another driver to most) and other names built up over years (Rutherford, Mears, Sneva etc.), definitely lost fans to the sport, especially as they left just as its downturn accelerated. It is strange that someone of Scott Dixon's skill and character, even after 13 years, has not seen him emerge as a major national sports name. Yes, it is absolutely because of the decision taken by sports editors to ignore the sport, which is a very real problem and can only be overcome by Indy Car stimulating one-on-one relationships with the leading editorial staffs in each town. (It is sad that newspapers have also lost much of their readership over the past years). But the upside is that proper use of social media offers perhaps even greater opportunities, if properly managed.
Although important, driver appearances on race week have little impact on advance ticket buyers who need to be stimulated to buy several weeks ahead of an event. Advance ticket sales add cash flow that supports pre-event marketing, so appealing to buyers a long time in advance of the event is really important.
Let's look at the role of the sanctioning body.
Yes, their main job is to conduct the events in an efficient, effective manner, but have they lost the plot by focusing to such an extent inwards on the teams, and not on the spectators?
The show is everything to fans, especially as they now seem to have such shortened attention spans, so the racing itself has to be intense, dramatic and obvious to the fans. By obvious I mean that the red blood mentality of drivers must be seen to be much more visible than it has often become, where drivers are told how and when to race and their strategy is determined by computers in pit lane.
How to do this?
Ban all radio communication between pit lane and drivers once the race starts. After all, it is the drivers role to race the cars that the engineers present to them on the start grids. Allow pit boards with their limited information and let the drivers make their own decisions. I bet that racing would be even more intense. Fans do recognize a driver who is cruising to orders versus one who is going hell for leather, and guess who they support? Indy Car does a hell of a lot better than F1 with their on- track action and their driver interface with the crowd. Just let the drivers be more free and allow their characters to show.
As I have noted, the source of overall income for track promoters has been cut radically over the past decade or so, to the extent that they have been forced to limit their pre-event promotions, sales activities and race day entertainment. Yes, Indy Car racing is now horrendously expensive, but cutting larger pieces for the participants (excluding promoters) from an increasingly small cake does nothing to make the cake bigger.
Here is my suggestion.
Let's say that sanction fees are $2,000,000 per race (I do not know what they really are, but let’s call them this for purposes of this discussion). Write the contract so that the promoter fronts up $1,000,000 and make the second million payable to the Series on the basis of one dollar for me, one for you, until the sanction fee is reached. Then the balance stays with the promoter. This is against all revenue, ticket sales, sponsorship, corporate hospitality, promotional fees, etc.
This makes the Sanctioning body need to ensure that the event is well promoted and attended. So they will then recognize their need to reach out and promote the series as a whole, as well as play their part in supporting the marketing efforts of each event. Any series sponsor must make significant commitments to support each event, with in market advertising and promotion and by paying for hospitality, signage and tickets from the event promoter. (PPG used to spend almost $100,000 with each promoter through their hospitality, signage and ticket purchases-all gone now).
In return Indy Car should have Presenter Sponsor title rights for each series event for the main series sponsors. So it might be the Texaco Grand Prix of Houston presented by Verizon. (and it is easy to add a second revenue paying presenter, such as a beer company). Again this gives the series sponsor a responsibility to promote outwards in each community where their series events take place, for ALL series events.
Remember, a series or major event sponsor has to promote his involvement in their event by adding marketing dollars to support the fees they pay to the sanctioning body. This should be a firm part of their contract, to the extent of somewhere are 40% of their total spend. Then each sponsor of an event MUST name major additional sponsors in all their own promotion of their activities, so everyone benefits by everyone else's spend.
The more sponsors work together, drawn together by the series marketing team and each events own marketing people, the more each benefit.
Most importantly. Yes, it is easy to go to the sponsors of the teams and the other companies involved in the series to get some revenue for an event, but this money is limited and really needs to go to the teams. So marketers must look outwards into their communities to bring fresh revenue and new faces to the party. And it must be a party!
Indy Car is looking good right now, and is definitely on an upswing after many years in the doldrums. But to improve and again dominate North American motorsport, the sanctioning body itself MUST take a leading role in the marketing of the series and must take responsibility for creating new national awareness, and they must work hard to bring their show to each market.
Each race promoter on the other hand must look outside the series for their major sources of revenue with aggressive marketing and by presenting events that attract non-race fans in their thousands. The sanction fee structure must be changed to encourage promoters to spend money marketing their events.
In short, the series brings the show to town and the promoter must bring the town to the show.
This way the events themselves benefit and the costs of racing in the series can be expanded so that more goes to the teams and helps more smaller teams stay in the sport, and become competitive.
I am sure that many promoters already understand and act along these lines, but maybe some of these thoughts may have been lost along the way, so it may not be a bad idea to at least revisit them in conversation and see if they might not spur new ideas. Mark Cipolloni can be reached for comment at MarkC@AutoRacing1.com
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