INDYCAR paces sponsorship resurgence
North American-based companies will invest an estimated $3.51 billion in motorsports sponsorships this year - up 4.2 percent over 2010 -- according to an IEG Sponsorship Report released late last week. Following a 2.1 percent rise last year and a 6 percent decline in 2009, it's an encouraging sign.
The IZOD IndyCar Series has led the resurgence.
INDYCAR added 14 new major commercial partners bridging 2009 and 2010, including Fortune 500 companies Verizon, Sunoco, Philips and Starwood. Promotional spending doubled in 2010 over the previous year, with licensing revenue up 83 percent and merchandise sales ahead 71 percent over the calendar year. Additionally, TV ratings and race attendance grew.
"Big percentage increases are clearly easier to achieve when the base is pretty low, so we do have to keep perspective," said Terry Angstadt, commercial division president of INDYCAR, the sanctioning body of the IZOD IndyCar Series and Firestone Indy Lights. "We did have some pretty good momentum finishing '09, so 2010 in my opinion was a real breakthrough year. We were able to add a number of new partners as well as adding a new event, all of which really positively impacted our financial results. There is no reason to think that this momentum won't continue."
Multiple opportunities are in various stages of conversation, according to Angstadt, with another double-digit percentage sponsorship spend and activation increase possible heading into the 2012 debut of the next generation of IZOD IndyCar Series car. The innovative project already has Honda, Chevrolet and Lotus committed to supply engines and an equal number of aero kit suppliers on board.
"When you look at a few of the key open categories we have (soft drink, beer, a number of spirits, technology), and it's a considerable amount of money, it's encouraging to me that just those are valued at something that significant," Angstadt said. "When you think of what our brand attributes are - speed, technology, innovation, diversity, green - they fit with so many potential partners. Technology is one to get really excited about, and we're at some advanced conversations in the technology category.
"For a company our size, it gives you reason to be excited that there's that many opportunities out there for us."
With the exception of the IZOD IndyCar Series, most recent motorsports activity has been with teams and racetracks, not sanctioning bodies, according to IEG senior editor William Chipps. Among deals of note, Penske Racing recently announced a handful of new sponsors, including Guidepoint Systems, Meijer, Shell Oil and IZOD, in addition to expanding its existing partnership with PPG. Chip Ganassi Racing added Service Central Chip Ganassi Racing through a sponsorship with TBC Retail Group for Graham Rahal and Novo Nordisk Chip Ganassi Racing for Charlie Kimball.
Angstadt, who recently returned from Brazil and discussions regarding a potential second IZOD IndyCar Series event, also highlighted the partnership with Apex-Brasil (the Brazilian Trade and Investment Promotion Agency). Since 2008, its purpose is to develop an innovative marketing platform to promote Brazilian products and services in North America. In 2010, export growth was 31.4 percent over 2009, the government recently reported.
An extension of the partnership through 2012 was signed last March, with another extension being discussed.
"With the new government, there has been a transition as well," Angstadt said. "(Former Apex-Brasil president and chairman of the World Association of Promotion Agencies) Alessandro Teixeira is now Deputy Minister of Trade and in a very influential position as far as economic development. What's fortunate for us is that Mauricio Borges, who was his business director, is now president of Apex-Brasil. So we have that luxury of continuity and a firm relationship. Mauricio has that same experience base because he was there at the start of our relationship. It's been very positive."