Post by About time on Nov 27, 2006 13:22:59 GMT -5
On Advertising: Formula One kicks the tobacco habit
Eric Pfanner / International Herald TribunePublished: November 26, 2006
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LONDON: With Formula One engines idled for an annual break, the auto racing circuit's sponsorship machine has shifted into high gear.
Last month in Brazil, at the last race of the season, AT&T announced a multiyear deal to become lead sponsor of the Williams team, the highest-profile involvement in Formula One for the American telecommunications company.
Days earlier, the Dutch bank ING Group detailed a broad sponsorship of the Renault team, the first involvement in the sport for ING. The bank later added that it would also sponsor the first race of the season, in Melbourne.
Last week, Grupo Santander, a Spanish bank, announced a five- year deal to support the McLaren Mercedes team, joining Mutua Madrileña, a Spanish insurer, on the McLaren roster. Now executives at these and other brands, as well as the racing teams they support, are scrambling to put together marketing strategies for the next season, which begins in March.
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UN to discuss toxic 'e-waste'The flurry of activity comes as Formula One draws ever closer to kicking its long-term dependence on tobacco. With regulators in Europe and elsewhere moving to close some of the last loopholes that permitted cigarette companies to sponsor auto racing, the hundreds of millions of dollars that these brands used to lavish on Formula One are dwindling.
As of next season, two tobacco brands that have long been high- profile Formula One sponsors will be out of the running. Mild Seven, owned by Japan Tobacco, has ended its relationship with the Renault team, while a deal between British American Tobacco's Lucky Strike brand and the Honda team has also expired. Other cigarette brands, like West and Benson & Hedges, previously bowed out.
Tobacco brands had been willing to pay a premium for these sponsorships because Formula One was one of the last marketing options left for the industry. With that money now dwindling, some teams feared a funding crisis. Instead, analysts say, as racing executives prepare to gather next week in Monaco for a conference on the commercial side of the sport, the sponsorship market looks surprisingly healthy.
The departure of the tobacco brands may actually have helped to attract a new kind of marketer, analysts say. The recent agreements are not the first involving banks and telecommunication firms, but the ING and AT&T deals give these brands so-called title sponsorships at some of the most prominent teams - positions that in the past were typically held by tobacco brands.
"For the financial services community, this is an opportunity to get involved in one of the only sports available that actually reaches a truly global audience," said Nanne Bos, a spokesman for ING.
Global television audiences for the races typically are rivaled only by a few other annual sporting events, including the Champion's League soccer final and American football's Super Bowl, said Kevin Alavy, a London-based analyst at Initiative, a media-buying agency.
Jean-François Caubet, a spokesman for Renault, acknowledged that the deal with ING was slightly less lucrative than the Mild Seven sponsorship, though he declined to provide numbers. But he said the new arrangement would be more valuable for Renault, adding that the French carmaker planned to step up its promotional spending for the Formula One team.
"The problem we had with a tobacco company is that it was difficult to build a global communications strategy around it," Caubet said, noting that in the past, Renault had to block out the Mild Seven logo on much of the promotional material.
One prominent team, Ferrari, will continue to accept tobacco money next season, even as it faces racing without the driver Michael Schumacher, who retired last month. Philip Morris's Marlboro brand plans to support the team financially through 2011 under a deal signed last year. At races in Europe and most other Formula One sites, Ferrari will be barred from displaying the Marlboro logo.
"We still believe it's appropriate for us to be involved," said Tommaso Di Giovanni, a Philip Morris spokesman, adding that the company would try to "develop innovative ways to convey the sponsorship to consumers."
Eric Pfanner / International Herald TribunePublished: November 26, 2006
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LONDON: With Formula One engines idled for an annual break, the auto racing circuit's sponsorship machine has shifted into high gear.
Last month in Brazil, at the last race of the season, AT&T announced a multiyear deal to become lead sponsor of the Williams team, the highest-profile involvement in Formula One for the American telecommunications company.
Days earlier, the Dutch bank ING Group detailed a broad sponsorship of the Renault team, the first involvement in the sport for ING. The bank later added that it would also sponsor the first race of the season, in Melbourne.
Last week, Grupo Santander, a Spanish bank, announced a five- year deal to support the McLaren Mercedes team, joining Mutua Madrileña, a Spanish insurer, on the McLaren roster. Now executives at these and other brands, as well as the racing teams they support, are scrambling to put together marketing strategies for the next season, which begins in March.
Today in Technology & Media
Online shopping rises with retailer savvy
Xerox developing 'erasable paper' system
UN to discuss toxic 'e-waste'The flurry of activity comes as Formula One draws ever closer to kicking its long-term dependence on tobacco. With regulators in Europe and elsewhere moving to close some of the last loopholes that permitted cigarette companies to sponsor auto racing, the hundreds of millions of dollars that these brands used to lavish on Formula One are dwindling.
As of next season, two tobacco brands that have long been high- profile Formula One sponsors will be out of the running. Mild Seven, owned by Japan Tobacco, has ended its relationship with the Renault team, while a deal between British American Tobacco's Lucky Strike brand and the Honda team has also expired. Other cigarette brands, like West and Benson & Hedges, previously bowed out.
Tobacco brands had been willing to pay a premium for these sponsorships because Formula One was one of the last marketing options left for the industry. With that money now dwindling, some teams feared a funding crisis. Instead, analysts say, as racing executives prepare to gather next week in Monaco for a conference on the commercial side of the sport, the sponsorship market looks surprisingly healthy.
The departure of the tobacco brands may actually have helped to attract a new kind of marketer, analysts say. The recent agreements are not the first involving banks and telecommunication firms, but the ING and AT&T deals give these brands so-called title sponsorships at some of the most prominent teams - positions that in the past were typically held by tobacco brands.
"For the financial services community, this is an opportunity to get involved in one of the only sports available that actually reaches a truly global audience," said Nanne Bos, a spokesman for ING.
Global television audiences for the races typically are rivaled only by a few other annual sporting events, including the Champion's League soccer final and American football's Super Bowl, said Kevin Alavy, a London-based analyst at Initiative, a media-buying agency.
Jean-François Caubet, a spokesman for Renault, acknowledged that the deal with ING was slightly less lucrative than the Mild Seven sponsorship, though he declined to provide numbers. But he said the new arrangement would be more valuable for Renault, adding that the French carmaker planned to step up its promotional spending for the Formula One team.
"The problem we had with a tobacco company is that it was difficult to build a global communications strategy around it," Caubet said, noting that in the past, Renault had to block out the Mild Seven logo on much of the promotional material.
One prominent team, Ferrari, will continue to accept tobacco money next season, even as it faces racing without the driver Michael Schumacher, who retired last month. Philip Morris's Marlboro brand plans to support the team financially through 2011 under a deal signed last year. At races in Europe and most other Formula One sites, Ferrari will be barred from displaying the Marlboro logo.
"We still believe it's appropriate for us to be involved," said Tommaso Di Giovanni, a Philip Morris spokesman, adding that the company would try to "develop innovative ways to convey the sponsorship to consumers."