Tuesday, July 21, 2009

JP’s Christmas in July IndyCar Wishlist

I noticed that July 25th is coming up, 4 days from that mythical mystical anti holiday created to sell cars – Christmas in July. We’re about 2/3rd of the way through the season, and it has been widely acknowledged as a season of discontent. SO I was thinking on top of the run of bad luck the league has been having, what things could pull us out of the doldrums.

I wanted to remain focused on stuff that is short term in nature, within the course of the remaining racing calendar or very shortly thereafter. I also want to be realistic, including things that have a positive probability of occurring (yes – by trade I am a statistician). I am limiting my self to 5 items on the list – no more than 3 are related to driver results and none have to do with where drivers will be next year. Since the schedule is coming out soon, that is fair game also. SO what are the 5 items on your Christmas in July list???

Here’s mine…

1) A Poll, a Podium and Win for Graham Rahal. Marco suffered from the Sophomore Jinx and has yet to recover. Graham has made big strides this year and a little extra success might interest McDonalds in activating that sponsorship a little more in the future.
2) Milwaukee on the Schedule for 2010. I went for the first time this year and really, really enjoyed the place. And yeah it’s old and not as shiny and new as other places, but our history oozes up from the cracks in the concrete. A solution needs to be found.
3) A podium for RHR. I was having a conversation with a friend before the season when a ride looked very doubtful. I said “RHR is the most important driver in the series” not the most famous, but in the long term important. An American with testicles and without a famous last name. Kids gotta have someone they can dream about. This season has been a bust, but a glimmer of hope for next season is needed.
4) A championship for JR Hildebrand in the lights series. See point number three. I am a fan of many of the foreign born drivers (miss you Vitor), but just like the oval/road course ratio (no less than half ovals), the ratio here is an important one to keep track of (at least 1/3rd us born). The kid is smart, professional and fast. A revamped, condensed and refocused AGR featuring TK, Marco and JR might get them headed back in the right direction.
5) Shortly after the season is done drivers visit the troops. After seeing the endorsement on Paul Tracy’s car and Suit in Toronto it made me think how great of a thing it would be if contingents of American, Canadian, British and Australian drivers went and visited the troops from their native countries stationed away from home. It’s just the right thing to do.

Please feel free to add in the comments section. At the end of the season I will repost these and see whose wishes came true!

Saturday, July 18, 2009

Sponsors, Start your Activation!!!

I was up and down the east coast a little this week for business, a couple client meetings and then a day at the main office to give a presentation to our executive committee. Had some bad news for them, our clients weren’t as happy with us as we might have hoped they would be. If our clients aren’t thrilled with us, then we as a company become stagnant, merely treading water. Marketing only succeeds in getting new clients to replace the old as the old walks out the door. Revenues are flat and employees stay in the same positions on the org chart – the most junior person today is the most junior person a year from now and that is lousy for morale.

We don’t have a problem getting new clients, but we have a little bit of a problem keeping them happy and thrilled with us. Thrilled happy clients are the best ones to have, not only do they stay with you but they also find ways to spend more money with you and they can become advocates for you in the marketplace. They say good things about you to their professional networks, and sometimes even better than that. When the right client (Client X) decides to co present with you at the right conference (Everyone was there!) the phone starts ringing off the hook with other potential new clients who want a piece of the action that Client X had. Workload and revenues surge, employees are added, new laptops are purchased, money is invested back into new technology and the new products that technology creates generates even more revenue. All a result of Client Advocacy which is a goal of any client focused company.

As I was in the car service from our Stamford, CT office heading back to my favourite airport in the whole wide world, NYC LaGuardia, I looked out the window and said to myself “Hey that’s Danica!”. Yes indeed there she was, street side on Washington avenue, or at least a cardboard POS display of her in her new black and orange Boost regalia. Danica has done something similar to what my company hopes to do. She has reached a point in her sponsor relationships called – Sponsor Activation.

Sponsorship Activation occurs when the sponsor begins to move beyond just being content that their name is on the side of a car while fans in the stands and those watching on television see their car go by over and over and over again for a 2 hour stretch on a Sunday afternoon. It happens when sponsors begin to actively use the driver, team or series in wider marketing campaigns - In commercials, in Store signage, on product packaging etc. The benefit of an active sponsor is that their use of your driver, team or series in their marketing plans has coat tails, namely free advertising. Sponsor Activation is very similar to Client Advocacy in that a stakeholder’s good will advances the cause of the service provider.

nascar has been living the dream here for over ten years now. In part that is how it exploded into popular culture. Happy sponsors became activated sponsors and soon nascar was everywhere and not a penny of it was being paid for by France money.

For the most part over the past few years, most Indycar sponsors have been relatively passive. There’s been some activation on a small scale. This year you have seen Sarah Fisher cutouts at some Dollar General stores and an on-line contest that features Sarah. This is a nice little deal for everyone involved here but the reach is small. You have seen larger than life size images of Marco hanging from the ceiling at Meijer stores (in 5, not 50 states) and you have seen Marco shaving in a Gillette ad with a cutaway shot of a race car turning a corner. Unfortunately, neither of these mentioned Marco or the series, so if you didn’t know already, then you didn’t know.

There are several sleeping behemoths in the IndyCar sponsorship stable, if the league as a whole (office, teams, drivers) can move two or three of them towards activation it would be a boon for the league to rival the loss of Tony George’s checkbook.

Those sponsors are:

  • Target – The second largest retailer in the country, whose demographics and brand characteristics all scream smart sexy and cool. Target has not done much with Chip’s drivers for several years now, heck the toy sections don’t even have the Hot Wheels versions of the Ganassi cars (for the record, Meijer does have the die casts for Marco). But if the rumors are true about Danica then we could potentially see activation like this series has never known. Even given the tackiness of the Boost campaign and lingering effects on what “Danica” has come to mean for branding advertisers, Target would be silly not to use her. Because they have her, they would certainly use Dario also (As for Scott – his job is to just win races and keep Chip happy). Activation benefits could include in store signage across the nation, Danica and Dario fashion lines and potentially placement in television campaigns that reach across a viewership spectrum far wider than Versus or Sunday afternoon on ABC. All this would introduce the drivers, the league and the 500 to an audience who doesn’t know or who may have forgotten what this is all about.

    McDonald’s – The largest restaurant chain in the world sponsors Newman Hass Lannigan racing and In particular, has Graham Rahal with golden arches on the side of his car. If he can continue to improve and win races on a regular basis, Graham has the opportunity to be what junior is to nascar. He is smart, well groomed, polite and from all accounts a good citizen. As an activation partner, the ceiling here is a little lower with MCDonald's, but still a presence at the largest restaurant chain in the country has its benefits. It seems like there has been a trial balloon for this already. The upstate NY locations issued 200,000 commemorative cups with Graham on the side in the weeks leading up to the Glen. Imagine that similar campaigns preceeded the series to every stop on the schedule next year. All the sudden it becomes easier to sell tickets, because more people know about it. Imagine if a similar cup was issued nationally for the month of May. The 500 is back on peoples’ awareness radar and the event could see increased viewership. NHL would be wise to find a second driver who would either appeal in Canada or Brazil next year for the same reasons.

    Izod/Macy’s – A prominent fashion apparel provider distributing through the largest midscale department store chain in the country. So far, from what I have seen this relationship has included new skivvys for msrs Barnhart, Angstadt and the Versus tv crew, a Billboard in time square (which I forgot to look for this week) and a bunch of spots during the race telling us they are here with the series. I have taken the time on a couple occasions to looks for RHR or league related POS at Macy’s but have seen nothing. RHR in a recent blog on speedtv.com mentioned that IZOD has some big plans for next year, hopefully, that involves moving the relationship out into stores and into other advertising vehicles. nascar may have Walmart shoppers in the bag, but a new set of potential advertisers opens up to the league if the league can claim that IRL viewers shop at Macy’s and Target. Upscale and Cool is hotter than, well, Walmart.

    Honda. While Honda has been the sole engine supplier, created an unbelievably reliable powerplant and sponsored aspects of the series and its events, it has never tied it’s involvement to an actual production vehicle. For those of you who are old enough to remember, when Honda first entered F1 ~20 years ago with McLaren, they did it for just that reason. The Acura NSX was due out and they wanted to link its heritage to that of a winning race car. They haven’t done it yet with IndyCar and it seems that there is some apprehension to do so. Part of the delay with the new car for 2011/12 seems to be an impasse over engine format. Honda wants to retain the current V6 with some mods and other potential partners (Porshe/Audi/VW and Fiat/Alpha Romero) pushing for an in-line 4 cylinder design. It seems like Honda does not want to start from scratch with the risk of missing the spec. On the other hand, the other suppliers want to be able to tie their participation to an actual production vehicle. It is much easier to credibly link to a production vehicle if the engine is the same format, which in this case, would be true for the inline 4 but not a v6 from any of these suppliers. I am not certain the nameplate needs to stay Honda, it could be switched to Acura, given the apparent imminent decline of the ALMS. For various reasons (not all racing) I think the league would be thrilled to have Acura, Porshe/Audi and Alpha Romero as the engine suppliers going forward.

Hopefully as sponsorship silly season descends upon us, we can hope for not only more sponsors to be involved with the series, but for deeper relationships and activation from those that are already here.

Monday, July 6, 2009

Thoughts on a Looming IMS and ISC Throwdown….

So when I went to bed a week and a half ago I had been reading about the schedule for 2010 and all the buzz was about the split between ovals. It looked like Milwaukee was gone due to a bad promoter, Brazil was on, Barber had some details to work out. The yearly Louden watch came and went without inclusion and Cleveland “Didn’t have enough community support”.

When I woke up this morning and began reading Cavin’s IRL Notebook, I started thinking – what the hell? Two races in Brazil, Cleveland was back on the map, the SMI double play of Louden and Vegas were on the table and a date was graciously being held for Milwaukee “If things worked out”.

SO what happened in a week and a half? Well, last Tuesday June 30, the IRL sat down with ISC to talk about the 2010 schedule and how the ISC tracks fit into it. I take it Mr Angstadt, those discussions did not go well. Five ISC tracks on the schedule and 5 tracks that seemed off the radar last week. I admit, I am only reading tea leaves but this is too convenient for coincidence…

I’m going to go over a little bit of history that most of us know just to serve as a reminder and to put some of my coming contents into context.

We all remember the mid nineties when the France family and ISC helped convince a seemingly gullible President of the IMS to take a family squabble with CART owners public and break away to start a new series – “heck we’re building lots of new tracks and you boys are welcome to come and race on them any time, we’d love to have ya!”

As much as that event has led Open wheel into the current situation and as much as our take on that event still splits us into two bickering factions, another day looms as large. In 1999, during the height of the split, the ISC bought out Roger Penske’s tracks. We all know the business man Roger is so the reason must have been made out of financial necessity. Perhaps there were threats related to those tracks never hosting nascar dates. The prospects of maintaining facilities for a single race each year for a sport in disarray probably was a red ink proposition. After IMS and Milwaukee those tracks (Michigan, Nazareth and Phoenix) were our heritage, our bread and butter.

Over the time that has passed, the ISC plan now seems apparent, close down Nazareth (if you are ever flying from indy to NYC LaGuardia, on a clear day sitting on the left side of the plane you can see it sitting there - a hollow shell of itself), make only rotten dates available at Phoenix (my favorite race of all time was watching Nigel and Tracy joust on that track, it was the day I knew beyond convincing the best races in the sport were indy cars on flat 1 mile ovals) and then the recent debates and loss of Michigan, again over dates. Throw in the purchase of Pikes Peak for no other reason than to close it down, and place a poison pill into the sales agreement to new owners so that they could never host and IRL race if they wanted to. All this resulting in leaving the IRL to race on the ISC’s most marginal of tracks, the tracks that needed extra shows to be profitable.

The ISC plan was simple - divide, extract assets, and then marginalize what was left. The only thing that the ISC did not anticipate: That no matter how much we bitch about the details of our sport and who’s at fault for the split and the current situation, we will never settle for their watered down, orchestrated farce of a sport. EVER. We are still here and we still want to see races.

Back to today and the schedule. For over a year now I had hoped that perhaps the IMS would take off the gloves and go after ISC and play the same games with them that they play with us. Hmmm SO We can race at Phoenix in July and at Michigan in March…What if we moved the Brickyard to…January. After the fiasco at last year’s Brickyard it seemed the time to stake that position was at hand.

The force of the argument probably has been watered down with the duds at Kansas and Richmond. But I would have loved to have been a fly on the wall last Tuesday to know exactly what happened, I hope it’s the case that the IRL put its foot down on dates and tracks or higher sanctioning fees and not a case of the ISC going for the kill shot by finally positioning us off of all of their tracks (rumors of a Fall date at the Glen? Bring a sweater).

In the mean time, my curiosity grows as to what the new schedule will bring. It certainly appears that a closer relationship with Smith and Gossage at SMI is at hand. Given their history with ISC and ongoing tense relationship over cup dates, this might be a case of your rival is my enemy – let’s work together. New Hampshire is a flat one mile oval (did I mention what the best combination of cars and tracks were in all of racing???) Las Vegas nicely slides into the Homestead slot and the awards banquet can stay in town the following week.

It would not surprise me to see Milwaukee back on the schedule next year. Perhaps the current promoter will admit defeat, declare bankruptcy in time for the state fair board to ink an agreement with a new promoter to handle all events or perhaps the IRL or an affiliated member of the series with some experience promoting events (READ – AGR) can step in for a one year transition.

Cleveland is Cleveland – from a racing perspective, the best temporary circuit ever planned. AND I am incredibly fascinated to see what a completely flat, wall-less 1 mile oval might look like…

And for Brazil, I have always held that if some one wants you to come race and they can pay the freight with a chunk of change left over for all the teams to share – let’s go for it. The time zones are right. Add in that the home crowd will get to see some of their heroes race on a big stage in person and you can guarantee big turnouts. If there are two races perhaps there is an oval down there somewhere (I recall once upon a time – wasn’t there an oval down there that one of the series raced on). Another benefit here – it will be a while before the IRL is anything other than #2 in the US or the world as a whole, but if you can carve out some places where you are #1, then that will help you from a sponsorship perspective. We have a chance in Brazil and Canada to do just that.

Perhaps when the schedule comes out it will be the same but the sanctioning fees will have risen with the ISC tracks by 20% or perhaps it will have Homestead out and Phoenix in, a date will open up for Michigan…I can always dream. But I hope we have finally figured out that we need to keep our business in house and play hard ball with the real villains…

Friday, July 3, 2009

Tony George, the End of the World and Darth Vader

A year and a half ago me and the Mrs JP (She’s a JP too) took a trip out west to Yellowstone. On the way we stopped in the Back Hills for a couple days. One Day we went to Deadwood and did what you do in Deadwood – hit the casinos. Nothing could go wrong that day – I left up from every table I sat down at and at my final three card poker table drew a straight flush. It was time to move on. Luck had to end soon and Yellowstone was calling. Had a great time in the park though a snow storm hit the day we left closing off the southern and eastern exits from the park so instead of heading south through the Tetons we headed out north and back to the Black Hills and back to Deadwood. So much for my run of luck…I came home up - but not by much.

The past year and a half for the IndyCar series has been the exact same thing. Reunification, Graham Rahal winning his first race, Danica doing the same, a fan and event revival for the 500, Ryan Hunter Reay showed that Americans who have testicles but not a famous last name can win races too, Dario came back home, Izod brought us style and Helio almost caught Dixon for the championship at the end of the season. In 2009 another compelling 500 with Helio’s story book ending ended a great run of positives for league…

But now we are on the other side of that run. An economy heading south, good drivers and teams left on the outside looking in, a plan to make the racing easier on the ears has made it harder on the eyes at the ovals, a longer wait for new toys, a red and white parade, a venerable old track clings to life hoping to race another day, Danica to nascar rumors, the end of an era and an uncertain future.

Tony George was out because of money and the control of it. Money that remade the speedway, created new events and built a new open wheel series – the only one we have left. But the problem was where the money came from. Not from sponsors, not from series generated revenue but from family funds and the family said it had to end. The first instinctual reaction is to assume that the flow of funds to the IRL is in jeopardy and hence the series itself is also in Jeopardy. But that begs reason and common sense.

The 500 and IMS need the IRL, the IRL needs the 500. The two have fates that are tied to each other. For those of you who think or expect nascar to be a savior or vulture are either wrong or greatly underestimate the wickedness that will come if there is not an open wheel race at IMS the day before memorial day. The idea that nascar will simply take over the 500 is silly, they will desecrate the corpse of their rival and at best run a nationwide race as a warm up for the 600 in Charlotte, or simply run a second race at IMS on a date they choose. The month of May will be lost forever. For the 500 to exist the IRL must exist.

George began the IRL to preserve the traditions of the 500. He ruled with his heart and had his hand on the family checkbook. His Successor Jeff Belskus is an accountant and typically in companies, the CFO’s are the guys who rise to the top when hard decisions have to be made. And that is where we are, at a position in time where the gains of unification are withering away. Car counts are nearly what each series was singly before the merger, a bad economy is sucking sponsorship from the teams that race, the fan base has grown tired of old equipment. Changes must be made such that the IRL and 500 as a package are revenue positive with an upward growth trend.

The changes that must be made should leverage the 500 in order to better support and grow the rest of the series without continued support from the Hulman George fortune. The changes that need to be made strike right at the heart of tradition for the month of May, but if we want to have a 500 ten years from now, decisions must be made. Despite his well intentioned passion, TG, the tradition loving, visionary sentimentalist is not the guy to make those decisions. A cold, calculating accountant just might be.

The IMS and the 500 make a profit. If they made more profit then the IRL could be funded by the extra OI – not trustfunds. Opportunities abound to increase the bottom line at IMS and the 500, but all would be controversial…
**Yellow shirts cost money, and everyday they show up they must be paid. An effort has already been underway to cut the number of days where yellow shirts are dawned and the track is open but it has not shortened the calendar. The costs to run the 500 would decrease if the month was condensed into a two week time frame. Long Beach could run later as a high profile, big market, ABC warm up to the 500.
**Ticket prices for the race itself probably would rise incrementally to enhance revenue for the 500, $5 to $10 a seat. Carb day with a practice session, Lights Race, Pitstop competition, concert and thousands of intoxicated 20 something females wearing string bikinis is quite possibly the greatest value in racing entertainment anywhere - at $15 or at $25.
**If the IRL can’t find a series sponsor, the 500 easily could. It wouldn’t garner as much as a series sponsorship, but should easily command close to half.
**There is a hole in the IRL schedule on Labor day, the Road course has already been set up for MotoGP, Let’s go Racing – Qualify and run a Sportscar race on Saturday and then run the lights and the big cars on Sunday at the USGP (Take that Bernie!).
**Sponsorship inside the track – OR – virtual sponsorship digitally superimposed onto fixed areas of the track during the broadcast is cheap money.

Yes, I am the anti-christ sporting a Darth Vader costume killing pupies and ending the world you have become accustomed to it. BUT I really am more like you than your emotions will allow you to believe. I want the 500 to continue being the greatest race in the world. But for it to be that, something more than a marginal, week to week series needs to be featured. No one other than Tony ever showed up with the wads of cash necessary to make that happen.

With that said – I would not do all of these things unless one condition is met. The IRL, needs to get to purple ink first. If the IRL remains deep in the red then the cash infusion from these changes is merely life support for a dying patient. If these funds come to an IRL that is close to break even, then these funds are like start up capital from an investment company or capital from a successful IPO – fuel to prime the pump. Fuel to grow the TEAM program hopefully allowing teams to hire on merit not sponsorship, fuel to have newer equipment sooner rather than later, fuel to better promote the series to a larger audience, fuel to increase purses across the series, and on and on…

If the rumors of even more Apex Brasil involvement are true, then the purple ink may not be far away. IF so, then the time to strike is now…

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