Season TV-Ratings, Versus 16% up

[Enjun Pullr]

MDS, that's a pretty high degree of specificity. I don't know much about ratings or pitching them, are your best guesses based on expertise?

[MDS]

MDS, that's a pretty high degree of specificity. I don't know much about ratings or pitching them, are your best guesses based on expertise?

I work in marketing, so its an educated guess, one scenario that could get the sport where we would like to see it.

The way I see it if you had a million or so viewers, 60 percent of whom were under 48 you'd have some blue chip sponsors coming to you. There some other ways to get there. NASCAR for example is still strong in key southern markets where they draw an 8 share in places like Nashville, Charlotte, Jacksonville and a few other places, and that's valuable to sponsors as well.

Ratings are also only part of the picture, likeability of drivers, like Danica and other things track in as well.

[Enjun Pullr]

This part confuses me:

"...in order to get to a point where the teams have enough sponsorship to choose the drivers they want and have young driver development programs we'd probably have to see ratings consistently in the 1.1 range".

That sounds like you are talking like a fat stack of cash, generated from a less than huge ratings increase.

AA needs roughly $7M per car to fund the entry, pay the driver, and throw a bone to F2000 as you suggest. It would seem unlikely to me that a 1.1 average on Versus is going to get a primary sponsor to invest $5M for the exposure.

Even with the caveats you added about ratings spikes, it seems like too wide a gap to bridge. Accumulating a number of associate sponsors seems the better solution, and I believe that is the direction many underfunded Nascar teams are adopting now.

As for all the Comcast/ NBC Universal/ Versus talk circulating, there is a common denominator. Indycar is almost never mentioned in the potential transfer of sports properties. Maybe fans think the big pond is a welcome environment, but I'd like to read some of the industry experts say so.

[MDS]

People look at ratings as kind of the end all be all of ROI, and as someone who has worked with major sports sponsorships I can tell you that's just a part of it. It's not just ratings but a whole host of factors like B2B, credibility, cool factor, fan support, loyalty, attendance.

[SarahFan]

People look at ratings as kind of the end all be all of ROI, and as someone who has worked with major sports sponsorships I can tell you that's just a part of it. It's not just ratings but a whole host of factors like B2B, credibility, cool factor, fan support, loyalty, attendance.

Which are all currently low also

[Enjun Pullr]

Yes, thanks for that MDS. The b2b case is apparently the only strong suit to play, as I'd have to agree with SarahFan about most of the other inducements.

I'm trying to figure out, with the current set of factors, what you walk in with as ammunition. If the b2b expansion that Apex-Brazil claims is accurate, that's one bullet.

The PVH boss thew around some positive numbers, but Kelly's "good vibe" interviews don't add any specifics. In a world where the numbers matter the most, it takes good ones to load up on.

The vague increase in TV ratings doesn't look like nearly enough to make a dent.

I think the cool factor works great for those inside the hospitality tents, and walking a crowded grid before a race. It gets frigid when you turn around and look at the grandstands.

[Jag_Warrior]

Ratings are important to sponsors. Attendance is important to sponsors. But going by the comments I heard at a sponsorship conference in Charlotte several years ago, one of the key metrics that sponsors look at is "sponsor exposure value", as indicated by the Joyce Julius measurement system. And even more than the JJ numbers, most large companies perform an internal analysis on the value of their sponsorships, comparing the cost of sponsorship to objective (real/hard) return measures: incremental sales increases, increased website traffic, etc. As late as the 90's/early 2000's, you could (really!) prop up the sales price or value of your business by claiming things like "good will". Just like "coolness", good will was totally subjective. When revenue and profit couldn't justify a sales price, you'd throw in "good will" to make up the difference. These days, it's MUCH more difficult to get away with that.

Even the Joyce Julius numbers are somewhat suspect, because they don't reflect anything other than a value based on "in focus" views and mentions. But still, when they're good, you can expect to see a series talking about it, like this 2005 IRL PR piece. When they're not so good, you can expect to hear crickets chirping... a situation we seem to have had more recently. If the key metrics were headed in the right direction, 7-11 and others wouldn't be leaving, IZOD wouldn't mind sponsoring Hunter-Reay for another season and The Captain wouldn't be struggling to find sponsors for his legendary team.

IMO, here is an excellent article, which deals with the question of why sponsors make the decisions they make... in this case, NASCAR vs. IRL. This author just uses basic viewership to assign values. And from what we see and hear, he seems to be close to the mark.

IndyCar Price and Market Value - August 10, 2009

14.688 million IndyCar viewers / 225.760 million NASCAR Cup viewers = .06506

The market, as a function of U.S. television viewership, values a championship caliber, full-season IndyCar team at approximately 6.51% of the total value of a similar NASCAR Cup team. We rounded up.

Budgets for top NASCAR Cup teams are estimated to be between $18 million and $20 million per season. Having determined relative market value at 6.51%, we know that the correctly priced operating budget for a top IndyCar team for the season is approximately $1,302,000.

[Enjun Pullr]

Well Jag, I really have to thank you for the education. There are great lessons in the comments of one of Roggespiere's readers, and in comparing numbers from a few of the articles.

As for 7-11; The 2005 valuation of $14M had dropped to less than $5M in 2008...and that was before the trade-off to the limited exposure of Versus. Since their brand exposure efforts are dedicated to retail sales advertising, I think the "good will" and "cool factor" arguments are moot.

As for cool factor: this is the focus of RP's reader comment, who pointed out the sales advantages (b2b) of sponsorship participation. It reinforces my position that the essential priority is local promotion for each event, and IndyCar has to fill that void with the direct cooperation of their sponsors.

Cool factor is special-access garage tours, buffets in the hospitality tents and suites, hanging on the grid with the bigs before the green flag. How cool is it when you realize nobody else thinks it's cool enough to come watch?

I don't know about you guys, sometimes I feel like a rube for caring about this Series when most other people couldn't care less. Does a TV viewer feel the cool factor when he turns on a race with empty grandstands? Why should I watch, nobody else does....

I think that makes national advertising campaigns, or attempts to promote personalities, a side issue. Politicians build local bases of support, one community after another, until they begin to establish national recognition. Then they can show commercials of rallies with enthusiastic local supporters.
"Somebody's listening to this guy...we should too".

Filling the bleachers gets you started on that road. An array of local promotions and incentives for each race are essential: even if the ticket prices are drastically devalued, the fan-building investment must be made. At least you can sell four times the number of hot dogs and beers.

Without it, every potential fan, and sponsor, and race promoter, and race track owner see how cool this deal isn't. Promoters in Vegas saw lousy attendance at the SMI track in Kentucky, and no attendance at the finale in Homestead. So they can't wait to subsidize a cool event like that next year? Crickets.

[Lousada]

Five years ago the cable-ratings were at least twice the size as they are now. The ABC ratings, including the Indy500, were significantly higher then now. Ovals like Kansas, Chicago, Kentucky and basicly every other, were at least 90% full.
A LOT of people left since then. What has changed these 5 years? The cars are the same. The drivers are for the most part the same (Dario, Dixon, Helio, TK, Danica, Marco, Wheldon, Meira, Fischer, plus the Champcar guys...). The split is over. The carcounts are up. Why have these people left? Don't tell me it's because of a lack of promotion...

[MDS]

Yes pretty much all the numbers are bad for the sport at this point at time. I don't get JJ numbers anymore because we've pulled out of that part of the business but my overall point is that the sport can improve without seeing massive ratings.

Look at the World Rally championship they don't have a particularly large demographic but its narrow, young, and because the cool factor of rallying is so large it can thrive. You don't have to have big numbers if you have good demos and overall appeal.

Honestly Indy needs a broadcast partner if its going to survive. I'm hopeful that NBC will take an in interest as part of the Comcast purchase, but that remains to be seen.