Mackey Marketing Group Weblog

November 24, 2008

“Why the Versus/IRL television agreement is a good move”

I have read numerous negative stories regarding the recent IRL television agreement with Versus cable network. While I am not a stalwart supporter of IRL (I was in the CART camp of supporters), I do believe that the direction and the philosophy regarding this choice to be on target. Without inside knowledge to the “deal”, I can only go on what’s been published. Allow me to share some contrarian input on why I believe the IRL television agreement with Versus is an overall positive.

  1. An underlying aspect that one needs to understand is that event marketing as a whole, and motorsports perhaps in particular, relies on the relationship between fan and sponsor to generate value. Motor racing has an extended enviable track record of doing this. As evidenced primarily by NASCAR, race fans have proven to be exceptionally and reliably brand loyal to sponsor products. Event marketing, including motorsports, sell their value based on this relationship and not solely on the size of the audience reached. The reason why this form of more intimate marketing rather than the more “traditional” mass marketing of the past is growing, is the relationship that is developed between sponsor and consumer. It’s why a sponsor sponsors a race car, why they sponsor concerts, festivals and just about anything where people gather for a particular interest.  Sponsors want to show this targeted audience that they share their particular passion and hope and believe this interactive relationship will result in greater product sales. It’s not primarily about “exposure,” it’s about relationships. There is no other leading reason for doing it.
  2. The other element that one needs to understand is that television exposure does not primarily beget fans, events do. I keep hearing about “exposure” generating fans and the need to get a racing series on television. While it may do so to some degree, the vast and more efficient means of generating fans is to get people to the races. Television numbers follow the trend of a series ability to attract fans. NASCAR? It has fans. Subsequently, a stronger television package because networks, sponsors and series all understand that fans (aka television audience) will watch – and buy sponsor product. Several years ago, I read a report that indicated that 30% of the television viewers (aka fans) who watched a NASCAR event on TV reported that they purchased a particular sponsor product, PURELY due to the motor racing sponsorship. That’s a heady number and mind-boggling influence over consumers. No wonder sponsors have gravitated to this form of motorsport success. If NASCAR is now losing viewers on television, it isn’t due to less “exposure” of the sport; it is due to NASCAR losing fans. If one understands that “viewers” of racing events on television are primarily “fans” and vice versa, then the ratings numbers generated and the corollary impact on sponsor influence begins to emerge clearly.
  3. That brings us to Versus. IRL did not choose to “buy” their way onto commercial network television, in my estimation, properly so. It would have cost millions to generate a modest television rating number because the IRL does not have sufficient FANS to instantly produce big numbers! And buying television time will not generate them economically enough to impact rating numbers. See CART.
  4. Some have suggested that IRL is losing sponsor interest due to the weak television deal and not the economy. I doubt this is true. I do believe the economy may be driving away prospective sponsors with or without Versus. It’s a difficult environment out there. However, my contrarian viewpoint is that motorsport marketing (and the event marketing industry as a whole) may be able to gain advantage among sponsor companies due to the increased value placed on the influential manner in which these audiences are reached. In today’s environment, advertisers may not desire to continue to throw enormous numbers of advertising dollars at a passive mass audience. They want response and event marketing is the place to find it. It does bode well for motor racing if sold from the proper perspective. But right now it is difficult time to find willing sponsors.
  5. I think we all can agree that the IRL is in a regrouping phase after the prolonged and difficult split. I believe the IRL must focus their energies on building event strengths and then take those strengths to further their television coverage. They already have built-in strength in the Indy 500, a pivotal starting point. I think we can agree that the primary force that race events have to attract people to races are the drivers. Rather than spending millions on weak network television numbers, it is better to spend money on generating interest in events. NASCAR has demonstrated this and built their series around generating driver stars. IRL also seems to understand that drivers drive fans to the races. Like her or not, they have Danica Patrick. They also have a growing list of marketable and popular names to build their fan base, including the important aspect of American drivers. While the whole grid should reflect an international element to build a scale of importance, the grid should have a measurable American presence. Names like Andretti, Rahal and others bode well for the IRL.
  6. Finally, the advantage of Versus. We all understand that the rating numbers generated by the Versus television network is likely to be smaller than one generated by a commercial network coverage. But if you’ve been listening, you know that size of the audience is not the only measurable element. The number of “fans” watching the coverage is also an important factor. Fans will search and find the television coverage whereas passive television viewers won’t. If the audience grows to significant numbers by Versus scale, then the IRL will be successful in generating new and loyal fans. Fans who purchase sponsor products. And sponsor product sales are what keep sponsors happy. It is just as important to demonstrate to perspective sponsors the growth of a fan base rather than relying on comparably weak network rating number from a passive audience of viewers.
  7. From the Versus perspective, IRL is a plum. It enables Versus to feature IRL and drive the IRL fans to watch the events on their network. By becoming a lead featured program of Versus, the IRL gains a marketing partner in helping to build fans and not just a broadcast outlet.

All in all, I feel that the Versus television deal is a good one. It has all the elements needed, promotes growth, enables greater focus on the IRL through features, expanded coverage and higher network priority. And the millions off dollars saved can be diverted to greater purpose.

All of us who view open wheel with high regard can help by supporting this growth period and redevelopment of the brand. The Versus TV deal may only be a first critical step, but I am confidant a step in the right direction.


Visit our website at http://www.mackeymarketing.com

Advertisements

6 Comments »

  1. Stop drinking the Kool-aid. Even the NHL knows that Versus doesn’t help them. In Detroit, it’s on the digital tier which means you pay more money to get it. Thankfully, we get CBC Channel 9 from Windsor.

    The IRL has no names. Unfortunately, Helio Castroneves is toast. Danica is just a sideshow. Who do you build around?

    Rahal just shut down his IRL team. No one is sponsoring anyone. You can’t run races opposite Nascar.

    Events are nice, but you still have to have the draw of star power to build the event around, and the IRL does not have it.

    I hate what open wheel has become but it is what it is and it will never recover, sadly.

    Comment by Larry Henry — November 25, 2008 @ 9:03 pm | Reply

  2. Good and I have any knowledge for me.

    Comment by egtoday — November 26, 2008 @ 5:48 am | Reply

  3. thats good

    Comment by rizreport — November 26, 2008 @ 8:13 am | Reply

  4. Larry,
    I’ve been drinking the kool-aid since 1968. Your comments do reflect the present state of affairs in OW, hence my contrarian view. I do believe that IRL has the foundation of elements it needs to revitalize the brand. I believe it can and will recover…but it will take awhile in this economy.
    Thanks for commenting.
    Brian Mackey

    Comment by mmgatl1 — November 27, 2008 @ 9:53 am | Reply

  5. Your optimism is admirable. And I want to believe that it is a good thing, but I just cannot get on board. Here are some thoughts: 1.) the IRL engine is too darn loud for a proper conversation at a race track – sounds trivial but sponsors like to do deals and meet and greet at the track but unless it is a road course, that can’t happen. 2.) they do not sound high tech and the “engineer/specifier/professional” is the unique audience that road racing and Indy Cars have been great at delivering, but they are coming to see the ALMS cars now because they are truly high tech. 3.) history of filled with spec series so one engine manufacturer spells death – Honda is too competitive to want to beat on itself. Acura program in ALMS is a great example of how badly they want and can cope with real competitive 4.) household penetration of Versus is better than it was, but it does not take into accout the “surfer” who still equates the networks, ESPN and others with sports – so Versus is not even getting surfed. 5.) Mr. George gave the equivalent to a bailout to make CART go away, and we will probably end up right back where we started with a nice diverse mix of multinational drivers, mixed road courses and ovals and back to turbos. So what did we just accomplish – we ruined what was one of the finest racing series in the world (CART in its heyday) only to bankrupt it, alienate its fans, allow NASCAR to cash in and now cash out – and end up right back where we started. The 500 will transcend whatever series races there, so that is the trump card, but the IRL has been a disappointment in many ways and has tons of work to do…

    Comment by Jim Stevenson — December 2, 2008 @ 5:39 pm | Reply

  6. Hi Jim,
    Thanks for thoughtful comments. I would not disagree with anything you said. My article was primarily addressing the Versus TV deal and why it was a reasonable choice for a TV deal. Your comments regarding IRL as a whole is an entirely different subject. They do have a lot of work to do. The ALMS is on the right track and it shows with their growing fan interest. I guess I may be too optimistic for the future of IRL, but I remain hopeful. That’s why I was positive on the Versus deal as I felt it was/is a step in the right direction. Thanks again for your comments.
    Brian Mackey

    Comment by mmgatl1 — December 2, 2008 @ 7:06 pm | Reply


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Create a free website or blog at WordPress.com.

%d bloggers like this: