Super Bowl better value than IndyCar — or is it?
IndyCar commentary — By Paul Dalbey on February 7, 2011 11:23 amLet me start with a disclaimer. Generally, when I have the good fortune of writing in this space, I feel like I am in a position to make a pretty decent argument. While I certainly don’t claim all of my writing is gospel, I feel like I present my opinions based in enough facts, knowledge, and history to make a pretty solid case. Such is not the case with this post. I admit right here that I am way out of my element when it comes to marketing and quantifying its value. I truly hope someone who is a professional in the marketing industry will come forward and either rebut or confirm my thoughts.
With that, let’s begin.
Last night, during the first quarter of Super Bowl XLV, I sent out a tweet that came off the cuff and wasn’t really meant to attract much discussion. It was as follows:
@Fieldof33: Half way through the 1st quarter and Bud Light could have already sponsored 3 competitive @IndyCar rides for 2011.
I didn’t give this statement much thought before sending it. I was merely pointing out a fact.
But within a few minutes, I was bombarded with replies and a handful of DMs telling me that while, yes, Bud Light could have sponsored a handful of cars with the $6 million worth of advertisements they bought in the first quarter, they likely got much more mileage (i.e., many more eyeballs) from those commercials than they would have by spending a similar amount on an IZOD IndyCar Series program.
Up front, I completely agreed with these arguments. For the most part, I still do. As much as I love IndyCar, it’s hard to argue that spending $3 million on a full season IICS program buys you nearly as much visibility as a 30-second commercial during the Super Bowl that is seen by nearly 100 million people, many of whom are watching for no other reason than to see the latest and greatest ads. There is a reason why FOX, CBS, and NBC can charge such exorbitant amounts of money for these commercial spots — industry research shows that companies receive a justifiable return on investment when they plunk down their many millions of dollars. In Indycar… well, let’s just say research doesn’t necessarily support the same ROI.
Nonetheless, I got to thinking about this topic again this morning as I was getting my ass handed to me on the treadmill while trying to rid myself of the horrendous amount of calories I consumed during the game. It occurred to me that while a sponsor is most definitely getting a better up-front return on investment for its Super Bowl money, perhaps the long-term outlook is a bit more cloudy. When a company spends money on an IICS program, it is not just buying a place on a team’s sidepod for three hours on Memorial Day weekend. For its $0.5 million, or $1 million, or $10 million, that company is buying a place in history.
Quickly (and without doing a Google search), tell me one good advertisement from the 1992 Super Bowl. How about from 1985, or 1978, or even the first one in 1967? Exactly! For every Betty White commercial, or Budweiser frog, or Cindy Crawford, or Mean Joe Green ad, there are hundreds of commercials that most people forget within a week of the Super Bowl.
On the flip side, I don’t think I’m alone in being able to tell you that Rachel’s Potato Chips was the sponsor on Eddie Cheever’s winning car at the 1998 Indianapolis 500. Or that Pennzoil was the sponsor for victories in 1980, 1984, and 1988. Who won the 500 in 1983? Tom Sneva in the Texaco Star. What car won in 1992? Valvoline. Twenty-five years after Bobby Rahal took the checkered flag, people still remember his sponsor was Budweiser. Want to go back further? Ok, let’s talk Bowes Seal Fast, Dean Van Lines, Belonde, Leader Cards, etc., etc., etc. While STP has been out of the game for many years now, the money it paid to sponsor one of the most iconic cars in racing history, the 1967 STP/Granatelli Turbine, is still paying dividends today. Likewise, Marlboro and Phillip Morris left IndyCar racing after 2009, but their image will live on through highlights of any of their nine Indianapolis victories and countless other wins.
Now, to head off another point, I do understand that not every sponsor that joins IndyCar is going to hit a home run and have the success of a Phillip Morris, or a Target, or even a 7-11. But even the sponsors that are not on winning cars are often rewarded for their involvement. Since 2005, how much mileage do you think Argent Mortgage and Pioneer have gotten from replays of Danica Patrick’s rookie run at Indianapolis in 2005? What about K-Mart and Havoline from their years of sponsoring cars for Newman/Haas Racing?
In the end, it is still hard to argue that a potential sponsor would get the return on investment from a full-time IICS program that they would from a 30-second time buy during the Super Bowl, especially when considering only the number of real-time viewers. However, when looking at the issue from a long-range view, the difference may not be quite as clear-cut as one may initially think.
Tags: Verizon IndyCar Series - Marketing
I agree with your analysis. For the advertisers (and at great expense), the Super Bowl gives them a highly captive audience and the ability for nearly unparalleled reach. It also lends itself to much higher risk of corporate faceplanting when the ad falls short of expectations. I happen to think (also without data) the faceplant is more common than the home-run.
Nothing made me want to rush out and buy anything I haven’t already and certainly made me reconsider a few purchases down the road (i.e. maybe I don’t buy a Chrysler 200, but the spot was good enough to warrant this American to support American car makes next time around).
I believe that any brand which is already a household name (Coke, Bud Light, maybe even Doritos) would be better served by dropping one or two Super Bowl ads and putting that money behind a race team. These brands are already known to everyone watching the big game. That megabuck commercial isn’t going introduce their long established product to anyone new.
Of course, these products are already known to race fans as well. The big difference is that I’ve never heard anyone claim they bought a product because the product supported the NFL. In contrast, I think most race fans actively seek out the products that sponsor race teams. Then there’s the place in history that you described quite well.
Q: Super Bowl better value than IndyCar — or is it?
A: No!
I won’t argue that Indycar would draw more eyes over a season than one 30 sec. commercial on Superbowl.
But I will put up a small argument about just blatently rejecting it. It seems they’re always talking about sponsor “activation,” or how the sponsor utilizes and supports Indycar besides just the ad. I think it works the other way too–I could see the value in Indycar being–1. that it keeps the sponsor’s name out there over a 6 month period, rather than one spot that most people forget in three days. 2. You have a driver, a “celebrity” ready and willing to not only endorse the product, but actively promote it in public appearances and 3. you not only promote your product on the car on the day of the event(s), but in secondary media–newspapers, mags, internet, blogs–for a continued period of time. Not to mention taking customers/other businesses to actual races, and hanging around in VIP areas and getting invited to big year-end bash in Vegas.
So there are some positives to sponsoring an Indycar that a Superbowl commercial doesn’t provide.
Ok without trying to ramble too much; as a Marketing Director I figured I could throw a couple notes in here. As you hypothesized, it’s more often that SuperBowl ad is a great ROI, but it’s not an automatic yes for best option. 2011 SuperBowl averaged 111 million viewers. You will never find as many eyeballs glued to the screen, WANTING to see commercials, plus the extended 1-week viral nature. Current IndyCar TV gets maybe 400k-1.2 million avg. race and few million for Indy.
But the first mistake people make is thinking 111 viewers equals 111 million sales. The actual ROI stems from the product. Firstly it’s only a good option for B2C companies; any B2B is an easy decision for the motorsports sponsorship.
$3 million (the going rate for a SuperBowl ad) isn’t the only cost, that’s just the ad fee to FOX/NBC/CBS. There’s also the promotions the weeks before, leaking ads, hype machine that costs money. There’s also production costs, which can skyrocket depending on how many celebrities you put in it and how much visual effect production you do.
Considering both had 3+ ads in 2011, it wouldn’t surprise me if Doritos (or Bud) eclipsed the $15 million mark this year in total SuperBowl commercial related expenses (enough for 2 full time Ganassi rides).
But, as Tony Johns on his site postulated, then a company needs to support that ad by getting their logo out there in more ads or someplace so you remember them from the ad when you’re in the supermarket or on the internet searching to buy something. The budget is much more extensive than many know.
Assuming all things best-case, what is the company trying to accomplish; if its direct immediate consumer sales for a new product, the SuperBowl ad generally wins hands down. I can’t fault companies who pony up the $3million to introduce themselves or a new product to 100+ million people, it’s how GoDaddy became the best known registrar, even if their ads are stupid. So yeah 80% of the advertisers probably made the right choice; but that’s only if they did it right (I’m looking at you chatter.com).
However, I saw at least 3 Doritos ads; without having their financial statements I can guarantee you they are not seeing 3 times as much business this week/month/year than if they only did 1 ad (same for Bud Light). Does advertising work? Sure. Does it work to the tune of quadruple sales for those companies; no. This is where Paul’s argument gets its first leg to stand on; companies with ginormous marketing budgets.
Bud and Doritos specifically love to piss money away year after year. Why do companies do it? Because it’s easy. $12million to make a few TV ads or $7 million for some ads and then $5 million more for a year’s worth of car sponsorship, race ads, events, schmoozing is a lot of work. SuperBowl ad is much easier, IndyCar sponsorship takes work, and you gotta hire full time staff to man it and make it return the investment.
The second leg is long term effect. If my ad sells 10 million thingamabobs in a month after my SuperBowl ad, that’s great, but what about a sponsorship that sells 6 million thingamabobs but captures 4 million of them to be loyal long term customers because of long term exposure, loyalty etc., who will buy thingamabob 2.0 when we release that one? In most worlds creating 4 million repeat customers is always better.
The third leg (or let’s say, cane), and probably more prominent place motorsports stands to win, is from the risk standpoint.
From a risk standpoint, motorsports sponsorship is a whole hell of a lot less risky, if one ad during a yearly campaign doesn’t go so well, you can switch it for the next 800 runs, same for logo on the car or sponsor events. If something doesn’t get off on the right foot you can change your ad. But as stated above, that takes hard work. Its why a company like IZOD is getting 300% ROI from IndyCar while past sponsors drop off claiming it didn’t help them. IZOD is working their ass off for that, and I bet you they’re getting a lot more in sales that they would with SuperBowl ads to the same cost; they’re converting people to their brand. I can guarantee you Homeaway isn’t getting 300% ROI on their SuperBowl ad.
Oh stop it.
So why then does Go Daddy spend millions peddling their soft-core porn on Super Bowl Sunday if IndyCar is such a great value?
uh–Wedge just said that for certain types of companies (Go Daddy, for example) “the Superbowl generally wins, hands down.”
I read one column and replied to it, I didn’t read Wedge’s.
Because it works for GoDaddy. Like I said 80-90% of the time SuperBowl is the right, and easy, choice. But I can list you numerous companies who have done SuperBowl ads who are either no longer around due to wasting money in marketing, or no longer choose to advertise during the SuperBowl and chose to go elsewhere. Its not that SuperBowl ads aren’t good exposure, its a matter of whether or not the call to action/ROI fits with the SuperBowl audience.
So can you name any companies who have done IndyCar ads “who are either no longer around due to wasting money in marketing, or no longer choose to advertise during IndyCar events and chose to go elsewhere?”
I’ll wait…
I would be more interested in IZOD having Super Bowl ads for the IZOD INDYCAR Series. Imagine all the sports fans who would see that.
I see what everyone is saying… so if you were to propose this to one of those companies what would you be saying to try and get them to want to invest in the 2011 Indy Car series then?
If I’m trying to get your 3 million on a sidepod, John, here’s what I would offer you. Rather than blow it on a one-time shot that might give you a temporary spike in sales, I’m going to give you not only advertising, but an image. Your product is going to be associated–for at least half a year, probably beyond–with a dynamic, edgy, sexy (sorry), sporting event. Your driver–yes, you get a driver with the deal–will be ready and willing to promote your product at each of 17-18 races. You can bring in customers and clients. Your product is not only advertised at each of these races and on television, but in replays on news shows, in magazines and newspapers and internet sites. Your product becomes a part of the history of each event over more than half of a year. For your three million, you actually will get something back in return.
(Oh well, I tried, guess that’s why I’m not a businessman.)
Very interesting topic!
I really don´t know much about marketing but I agree that sponsoring a ride in the IndyCar series requires a lot of hard work, activation, huge involvement that some brands might not like. A Super Bowl ad and following campaign maybe it´s easier to track if it finally worked.No way to do that with an IndyCar sponsorship. For example, for GoDaddy certainly doing Super Bowl does work, Bob Parsons said that the week after the SB they sell domains like crazy. They know how much they earn with the ad. But not really sure if people will buy more Volkswagens after the Darth Vader ad.
If you use an IndyCar sponsorship program in the right way, you could get a huge return. But also, I think you can´t sponsor a car “forever” because people will remember you anyway, for example, 7-Eleven will always be related to Tony Kanaan, Marlboro to Penske, no matter if he is now in a HP ride. But can´t be for a short time either…
Taking Spike´s point, more than Izod investing in SB ads, I would be interested to see what happens if GoDaddy uses Danica´s cars (the Nationwide car or the new 2012 IndyCar would look great) in a Super Bowl ad. I´m a racefan, then biased, but I think they are wasting an opportunity by not using the cars/speed.
redd car – You brought a very strong argument. I would think you were a businessman. My only side comment to that would be why would a company want to sponsor an Indy Car for the full season rather than just a race by race basis. I’m assuming the drivers would rather have a contract and have a company willing to put them through the whole season but that means having a company wanting to put down more money at the beginning. How would you present this case?
Actually it looks like the trend, in N-car and Indy–is for partial sponsorships, or shared sponsorships. And there’s nothing wrong with that, but I’ll try to argue why you should sponsor the entire year.
Aside from building an audience and a sense of permanence, I would argue that a whole season makes it your car while a partial season makes you an interesting but temporory hobbyist. If you sponsor the entire season, then that car is the John’s Premium Soda car and belongs to no one else. Your employees, your customers, your business partners know when they watch an Indy race that your car will be racing that week. And on a bottom line level, I don’t know what they do in real life, but say a year is 3 mil. Just to sponsor the 500 alone, I might charge a million. For four races, including the 500, I’d charge two million. So the idea of getting 17 races for 3 mil. might seem like a bargain to you.
[…] interesting debate began to wage earlier today when Paul at More Front Wing publically pondered at his site whether $9M would be better spent on three Super Bowl ads or […]