Formula for success comes to U.S.

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[london] Formula One World Championship Grand Prix returns to the U.S. Sept. 24 for the first time in nearly a decade, giving international marketers that sponsor various racing teams a truly global platform.

The annual F1 Championships, a fixture since 1950, start in March and run until October. In 1991, the U.S. was dropped from the series in favor of CART and Nascar. But prompted by global sponsors such as MasterCard International and Compaq Computer Corp., organizers believe the U.S. is ready to join in again.

Today, F1 boasts 4 million TV viewers per race, thousands of spectators and broadcasts to more than 150 countries. Cable's Fox Sports Network carries the races, and Speedvision also will cover F1 as the sport comes to the U.S.

Interpublic Group of Cos.' Octagon sports marketing agency spent more than $180 million last year to buy U.K. motor-racing circuit Brands Hatch, which stages the British Grand Prix from 2002, indicating F1's significance to marketers.

The re-entry of the U.S., which last took part in F1 nine years ago, provides sponsors with the extra clout of the world's biggest economy. Compaq, for example, is using ad agency FCB Worldwide, New York, to launch a new global campaign around the same time as the U.S. race in September.

Information storage specialist EMC, Hopkington, Mass., a young company with 20% of its business in the U.S., doesn't have its logo on the U.K.'s Jordan Team car it sponsors.

"We want to have the experience of F1 first," said Peter Ross, international marketing manager. But EMC plans to incorporate F1 in future ad campaigns via Arnold Communications, Boston. "We're planning to have a very dramatic upward spike in the amount of advertising and branding we do next year, and F1 will be a major component," he added.


Corporate merchandise, such as affinity credit cards linked to Formula One, are among the marketing moves being planned by F1 sponsor MasterCard at Indianapolis, site of the U.S. race. The company also will launch a "Priceless Moments in Sports" PR effort, publicizing memorable moments selected by U.S. sportswriters and tied to MasterCard's current global ad campaign by McCann-Erickson Worldwide, New York. Additionally, the card marketer will give value discounts to consumers who use MasterCard to make a purchase at selected retailers in Indianapolis.

"Formula One provides a new dimension to what we do," said Debra Coughlin, senior VP-global brand building at MasterCard, which has sponsored the Jordan team -- owned by Britain's Eddie Jordan -- since 1997. "We're a little bit spirited like Eddie Jordan, who has great flair. And we want to capitalize on that."

F1 is an expensive sport requiring the support of several sponsors. The car's body alone cost more than $11 million per season. Not surprisingly, each vehicle is awash with the different sponsors' logos. The Jordan team, for example, is supported by Benson & Hedges, Lucent Technologies, EMC, MasterCard and Germany's Deutsche Post World Net.

"Apart from bring us technology and financial investment, [the sponsors] bring a degree of credibility to the team," Mr. Jordan said. "If we sported sponsorship from companies people had never heard of, it would suggest that Jordan was not viewed as a strong medium for high-profile brands."

But it's technology brand owners that do a lot of the hand-holding in this pressured sport. Lucent has its logo on the Jordan team's car and the drivers' uniforms to showcase the company's attributes as the marketer of cutting-edge telecommunications equipment.

"Because of its origins at AT&T, Lucent Technologies has spent a lot of time and energy creating a very strong brand awareness in North America," said John Hughes, president of Lucent's U.K.-based wireless network group. "The decision to go with F1 [after the spinoff from AT&T Corp.] was to create greater awareness outside North America."


At a time when the European Union is determined to ban tobacco ads and sponsorship permanently -- a category that has fueled F1 -- the technology companies' marketing cash is the cavalry coming to the rescue.

Additionally, technology marketers provide the systems required for communication among the drivers during each race, the pits where tire changes and engine service takes place, and the factories where an array of data is collected to enhance performance next time.

"We thought it the best platform for building business-to-business relationships, which represent the majority of our revenues," said Gabriele Zedlmayer, Munich-based VP-marketing communications for Compaq in Africa, Europe and the Middle East. "F1 is global, which is crucial; it covers all areas of the world, and it's happening all year round. It's not a one-off event."


With the participating cars hitting average speeds up to 150mph, F1 attracts fans fascinated by the innovative technology that enables death-defying drivers to negotiate winding circuits with convoluted bends, unlike the smooth, oval circuits of U.S. motor racing. The fans also include a significant share of affluent, high-income earners.

Jordan team sponsor EMC illustrated the benefits for its brand this way: "We sell to large organizations such as communications groups, retailers, financial institutes and e-commerce ventures, whose daily activities are flooded by unimaginable large volumes of data," said Ron Slate, EMC VP-global communications. "The storage system for managing, sharing and protecting the data can cost millions. It's such an important purchase, we need to sell to influential people within these companies. That's where F1 comes in."

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