Group Created with Sketch.
Volume 20 No. 42

Marketing and Sponsorship

Hulman & Co., owner of the IndyCar Series and Indianapolis Motor Speedway, is selling sponsorships that include both the property and facility for the first time.

The move follows new CEO Mark Miles’ reorganization of the company earlier this year. He brought sales for both the series and the facility into the same division, and that opened the door to selling sponsorships that include speedway and series assets. Previously, both IndyCar and Indianapolis Motor Speedway had independent sales teams that sold separate sponsorships. On occasion, in select categories, they worked together to offer potential sponsors a package that included assets from both the property and facility, but that was rare. Now, all deals will include assets from both.

May will feature three big weekends at IMS: a road race, Indianapolis 500 qualifying and the race itself.
The first test of the new approach will be on display as Hulman Motorsports, which oversees both IMS and IndyCar, searches for a new title sponsor for the IndyCar Series. Izod, which was paying $10 million a year to title sponsor the IndyCar Series, announced last month that it will end its sponsorship after this year.

Miles is spearheading the effort to replace Izod. The series last year under former CEO Randy Bernard priced a new title sponsorship at $6 million a year in rights fees and $5 million a year in media, but Miles said that the price of the sponsorship will be dictated by the mix of IndyCar and IMS assets that a new title sponsor wants.

“We’re not going out and saying, ‘We’re selling a title, and it has to look like this,’” Miles said. “We think we should look at the array of assets and convey to partners that we’re not interested in selling sponsorships separately from IMS. We’re looking at it as though we have a lot of assets. Then we can ask what’s appealing.”

The push to find a title sponsor coincides with an effort to sell presenting sponsorships during the month of May. IndyCar will hold events at IMS that month over three weekends — a road race, qualifying for the Indianapolis 500 and the Indy 500.

Hulman Motorsports is looking to sell a presenting sponsorship for the entire month or three separate presenting sponsorships for those three weekends. The sales push coincides with an effort to make the month more compelling. The May 10 road race is a new event designed to draw fans to IMS and generate enthusiasm for qualifying and the Indy 500. Miles also wants to make qualifying more compelling by setting the pole late in the day on Sunday, May 18, and he hopes to add a high-profile concert at the end of Legends Day, the Saturday night before the Indy 500.

“I see the possibility of selling the weekends [separately],” Miles said. “There’s also the possibility of selling the whole thing as a portfolio.”

Motorsports marketers think including IndyCar and IMS assets in sponsorship deals will help brands and Hulman Motorsports. Brands will benefit by being able to negotiate deals with one rather than two companies, which should result in price efficiencies. Hulman Motorsports will benefit by offering sponsors interested in the IndyCar Series the chance to activate on-site at the sport’s marquee event, the Indy 500, and offering sponsors interested in IMS the opportunity to activate at more than a dozen other races through the IndyCar Series.

“Anyone who wants to be involved with the league wants to be involved with the speedway,” said Jon Flack, president and COO of JMI, an Indianapolis-based motorsports agency. “You’d think there would be financial efficiencies, more unified activations and ways to extend marketing campaigns from the Indy 500 to the series. [Hulman Motorsports] should be able to get bigger categories at bigger price points.”

In addition to looking for a new title sponsor, Miles said he is continuing to look for a CEO to oversee Hulman Motorsports, who will oversee the commercial business of IndyCar and IMS. He began the search nearly a year ago and said that finding the right candidate has been difficult.

IMS Chief Sales and Marketing Officer Mike Redlick resigned last week. Miles said that if he can’t find the right fit for the CEO job, he may split the job in two and hire a senior vice president of sales and a senior vice president of marketing and communications. Both would report to Miles.

“We have taken significantly longer than I expected,” Miles said. “We’re comfortable with that because it’s more important to get it right than get it fast. We’re going to be happy with the result and have an answer in due course this year.”

RSE Ventures is expanding into Asia.

The New York-based sports, entertainment and technology company co-founded by Matt Higgins and Miami Dolphins owner Stephen Ross is opening an office in Hong Kong by the end of October. RSE Asia’s first venture is the creation of the Catalyst Media Group, which will be led by CEO Patrick Murphy, the former managing director of Team Marketing.

At Team Marketing, Murphy was responsible for the commercial properties and television rights sales of the UEFA Champions League, Europa League and Super Cup. Catalyst and Murphy will direct the global media rights sales for the Guinness International Champions Cup, the summer tournament that debuted this year featuring eight of the top soccer clubs in the world. RSE Ventures is the parent company of Relevent Sports, which created the tournament.

The lineup of clubs for the second edition of the tournament, to be held next year in stadiums in the U.S. and Europe, is expected to be announced next month. According to RSE, nearly two dozen clubs from the U.S., England, Spain and Italy have inquired about participation in the 2014 tournament. More than 300,000 fans attended the eight match dates this year. The final match between Real Madrid and Chelsea on Aug. 12 drew more than 67,000 to Sun Life Stadium in Miami.

“I’m excited to get to work and capitalize on the fast-growing Asian market and build both Catalyst and the International Champions Cup,” Murphy said.

Catalyst Media Group also will be the exclusive distribution partner for live shows and the archives of One Fighting Championship, Asia’s largest mixed martial arts organization.

“RSE Asia solidifies our global reach,” said Higgins, RSE’s CEO. “We are looking to expand the Champions tournament and our overall business under Patrick’s leadership.”

Terry Lefton
Adjusting to the shifting media and marketing landscape is an eternal concern for marketers. Still, the record 2,200 gathered in Phoenix for the Association of National Advertisers annual conference were more perplexed than ever, not only because of the splintering media landscape, but by the new, elusive millennial consumer. Those 13- to 25-year-olds value
social over traditional media and are the first “digital natives,” seemingly born with lifetime Netflix subscriptions and iPhones in their pockets.

So the call to action by CMOs to their marketing brethren was not only for them to come to terms with social and digital marketing and the millennials against whom many of those efforts are targeted, but to create entirely different marketing organizations for a new and somewhat uncomfortable reality.

“In my 30 years of marketing I have never seen change on this scale,” said Stephen Quinn, Wal-Mart executive vice president and CMO, who detailed how America’s largest company had shifted from a one-size-fits-all advertising policy across the merchant’s 4,118 U.S. stores to shooting 1,500 ads a year in 70 markets in an attempt to show consumers real shoppers facing real comparisons and finding that Wal-Mart’s pricing beats local grocery stores.

“We’ve had to turn our marketing into a local effort and we’ve had to restructure our whole marketing department to do that,” Quinn said.

With brands struggling to find the right combination of digital and social in the marketing mix, marketers were told to revamp their organizations with an emphasis on being more nimble and reacting with the speed of a Facebook post.

“Change is happening faster than ever before, so agility is more important than ever,” said

Stephen Quinn of Wal-Mart (top) and John Costello of Dunkin’ Brands (above) were among the marketers addressing the massive changes they’re seeing.
John Costello, Dunkin’ Brands president of marketing and innovation. “We all need to react and change so quickly now.”

Antonio Lucio, Visa global chief brand officer, cited increasing the social/digital portion of his marketing budget from 11 percent to 30 percent domestically and from 5 percent to 20 percent globally, while simultaneously combining the payment card company’s marketing, corporate communications, charitable giving and public affairs departments. “That certainly added partners and complexity to the equation,” Lucio said, “but it is the only way to the future. Every communications platform must be integrated.”

Subway Restaurants CMO Tony Pace said it was a new kind of speed to marketing, requiring marketing that is both surgical and extemporaneous. “With the right assets, you can be like Peyton Manning at the line of scrimmage and audible,” Pace said. “In the past, 80-plus percent of your marketing plan would be executed the way you originally planned. Now, it’s like 20 percent, so it’s completely flipped, so you had better be agile.”

Subway's Tony Pace (left) and Visa's Antonio Lucio
With structural change comes changes in job responsibility. So the new role of the CMO was also much discussed. At a time when the marketing chief has a hand in everything from technology to customer service and corporate responsibility programs, the CMO’s chief concern is no longer riding herd on the advertising. “That certainly has defined us in the past, but it doesn’t now,” said Wal-Mart’s Quinn. “What the CMO needs to be today is the chief innovation officer.”

Chrysler CMO Olivier Francois detailed his company’s turnaround, through the help of a campaign that included a Super Bowl ad with Eminem celebrating what was then a much-maligned Detroit auto industry. “There is no magic,” said Francois. “There is just the will to change.’’

Joe Tripodi
, Coca-Cola’s chief marketing and commercial officer, said the millennial road map leads to “TAOS,” since that group is best described as being Transparent, Authentic, Organic and Sustainable.

“They expect unlimited choice and personalization, delivered through multiple channels at maximum speed,” said Tripodi. “The way people communicate in this digital age is really rewriting the rules of our marketplace. … We are

delivering products to consumers more on their terms than ours.” As examples, Tripodi cited “personalized” Coke bottles in Australia, produced with 150 of the country’s most popular first names on them so consumers could seek out their own Coke. Perhaps the ultimate millennial Coke marketing ploy is its Freestyle fountain vending machine, which uses a mobile app, directing consumers to the nearest Freestyle machine and saving favorite soda mixes. “What we have now,” Tripodi said, “is real-time consumer co-creation.”

> SNICKERING: David Lubars, BBDO chairman and chief creative officer, said it was a simple idea — “You’re not yourself when you’re hungry, and Snickers sorts you out” — which led to the Betty White Super Bowl ad for Snickers and the associated campaign. The campaign is now running in more than 80 markets around the world and has helped Snickers grow to be Mars’ second billion-dollar American brand. Keeping the millennial focus in mind, Lubars detailed the test of a new creative concept. “If you can’t write the [campaign] idea as a tweet or a text, you probably don’t have an idea,” he said. Lubars also amused with an anecdote from the shooting of the Betty White ad, in which she laid down in a mud puddle with a man on top of her, simulating a tackle in a football game. “As we were putting the guy on her, [90-year-old] Betty said, ‘I like it when a guy buys me drinks first,’” Lubars said.

> COKE’S WEIGHTY ISSUE: With Coke a scapegoat for the mounting obesity problem, Tripodi said the brand would use, among other weapons, its biggest sports marketing assets to attack the problem. “Olympics, FIFA, NBA or whatever: These are very significant efforts and we are going to use these platforms to help inspire optimism, but also healthy, active lifestyles,” he said. “You’ll see more and more go toward motivational communication that gets people to understand that they need to move. It’s all about calories in, calories out as a balance.”

Tripodi pledged that Coke would stop advertising to children under 12, plainly show nutritional information (including total calories) on the front of packaging, and use a variety of marketing assets to encourage a healthy lifestyle. However, “we reject categorically the demonization of our company, our products and our category. Our products are healthy for anyone, as long as they live a healthy, active and balanced lifestyle. If they do not, we strongly encourage them to have a Diet Coke or a Coke Zero,” he said.

Terry Lefton can be reached at