Blitz Magazine, September 1998
‘Chances are, you know a Motorhead. Someone who loves motorsports, who know the drivers and cars, who watches racing, reads about racing, plans vacations around racing.
BC has lots of Motorheads. And lots of party hounds. Together, the two groups have propelled a beer promotion into an international sporting event.
The Molson Indy began in Toronto in 1986. It was an immediate success; three years later, Molson decided to put a race in Vancouver.
Until this year, the Vancouver Indy took place on the north False Creek shore, on land owned by international developer Concord Pacific Group. That site borders city property which, in turn, holds General Motors Place, BC Place Stadium and the Plaza of Nations — and includes busy roads and bridges. Obviously, landlord support was essential.
Concord was immediately supportive. “Concord sells condos worldwide,” notes Stuart Ballantyne, General Manager of the Vancouver Indy. “For three hours each year, its Vancouver development is seen by 30 million people in 195 countries. It’s good advertising.”
It took a little more to convince Vancouver City Council. “The Indy was a proven commodity in Toronto, but Vancouverites don’t necessarily care if something is successful in Toronto. Council wanted to know that we would do what we said we’d do — it had to be successful.”
It’s been tremendously successful. Despite the fact that Toronto can pull from Ontario’s huge population, plus that of Quebec, New York and Michigan, Vancouver attendance is greater. While Toronto’s attendance hit an all-time high of 168,000 in July, Vancouver attendance has always edged 170,000, with 67% from Greater Vancouver, 25% from Alberta and BC and 8% from the US.
The Molson Indy Vancouver is one of 19 races in the FedEx Championship Series. FedEx is the series sponsor, the series is owned by Championship Auto Racing Teams (CART) and the two Canadian races are owned by Molstar Sports & Entertainment, a division of Molson Breweries.
The Molson Indy cars are Champ cars or ‘customer cars’ — the team buys a car from a factory and an engine from an engine manufacturer. (Formula 1 cars are custom-designed and -built.) It costs $10.-$25. million to operate a Champ car and that money comes from sponsors, hence logo-plastered cars and drivers.
In North America, there are four circuits: the super-speedway, the permanent road circuit, the short oval and the temporary street circuit, which is what the Vancouver race is. Every Labour Day week-end since 1990, this has meant bridge and street closures and lots of wingeing. But, says Ballantyne, “Vancouverites have been enthusiastic from the beginning.”
The majority anyway. There have always been complaints about noise, pollution and the glorification of the automobile.
“Some people believe that racing is not conducive to their environment,” continues Ballantyne. “But we do not pollute–Indy cars run on methanol, which burns more cleanly than the fuel we all use in our cars. For three days each year, we make a lot of noise. But that noise brings $20. million in direct economic benefit to the city. And there are no tax dollars involved.”
Which is good news to other Vancouverites, who don’t care about pollution but don’t want to pay for the race. So Molstar pays. And pays. To construct the track and facilities. To pave and re-pave roads. For police, fire and ambulance services. It rents all land used by the race. Until this year, the race locked in BC Place Stadium, GM Place and the Plaza of Nations, so Molstar had to rent the three facilities and their parking lots.
That changed when Concord’s development caught up to the track — a condo tower now sits at the former Indy hairpin turn. The track had to be moved. Motorheads freaked. Ballantyne had to find a new venue.
There was furious rejection by Hastings Park residents. Surrey is too far away, various farmers’ fields lacked parking and transit access. Then Vancouver Mayor Phillip Owen came up with a plan–to shift the track southeast, along Quebec Street and onto the grungy wasteland south of Science World.
Now everyone wonders why no one thought of this before. Because the new track is much better–a 2.9 km, 320 kph horseshoe, running around False Creek and Science World. With its waterfront setting and clear mountain views, it’s the most beautiful setting on the FedEx circuit. Traffic inconvenience is reduced, opportunities for entertainment and profit are increased — on race week-end, GM Place and BC Place hosted concerts and football and the Plaza of Nations became Indy’s front door and site of its MotorSport Show. Forty per cent of Indy-goers get there via transit and the new site holds two SkyTrain stations and a bus loop. The Science World park allows for more general admission guests; seating increased from 40,000 to 45,000.
Most importantly, the race is better for Motorheads. Norman Stowe is president of The Pace Group, which handles media and public relations for the Vancouver Indy. This year, Stowe had the additional task of reassuring the race’s 70,000+ hard-core fans.
“They needed to know the fundamentals — that the new track was faster and more demanding, with more turns and more passing opportunities, which is what fans and drivers want. We showed them how we used computers to analyze the track from the spectator and driver perspectives. And we had driver support– Greg Moore helped design the course, and he and Christian Fittipaldi and Patrick Carpentier went out on the track with the media.”
Stowe says that media support is paramount. “We stay in touch all year and take media members to spring training in Florida. This year we showed them the new track from the air, then had them race carts on a scaled-down version. We also have strong partnerships with media organizations. The people who support the race financially get their opinion of it from the media. If the race isn’t playing well in the media it would be a much harder sell.”
Each year, 600 accredited media members show up. Most are ‘hard cards’–professional motorsports writers who know the protocol, the cars, the drivers and the teams and need little attention. Then there is the local media, the aforementioned partners who start on Fathers’ Day with province-wide promotions. Indy does not allow media exclusivity, so everyone gets to leverage their participation.
“We work with sponsors and media partners to make sure everyone gets the most from the dollars they commit,” says Linda Wirkowski, Molstar’s Director of Marketing & Communications. “Sponsors and partners do their own advertising and have their own objectives, but we know what the event can deliver. So we get them to team up. We have sponsor-partner workshops where we exchange ideas and see how we can all get the biggest bang for our buck.”
Wirkowski says that Molstar doesn’t have the resources to organize the race on its own. It is an enormous undertaking. It has five full-time employees; volunteers make that 2,000 by race week-end. Track and facility construction begins in March; it takes a month to dismantle everything. And the fact that its owner is a national brewery does not mean that funds are unlimited; Molstar has to find its own money.
Indy sponsorships run from $75,000.00 for local programs, to $1. million for Molson partnerships. Benefits can include pre- and post-event marketing rights, usage rights of the Indy name and logo and product category exclusivity. Sponsors have access to the event customer database and logo placement on 63 on-site banners and signs. They receive broadcast time on the PA system, their spots appear on the grandstand video display screens, they can have four 30-second commercials a day and one five-minute feature piece.
The Indy demographic is 71% men, half age 26-44. Half of attendees earn $35,000.00 to $75,000.00; half are professionals and executives. Sponsorship is, therefore, a great way to generate sales, boost visibility and introduce products. So selling sponsorships must be easy.
“It’s a tough sell,” explains Ballantyne. “We used to have categories and sponsors just chose one. Now, a car company wants this, a food company wants that. We identify targets, come up with ideas, float them to prospects and see what sticks. Sometimes we’re not there. Making auto racing relevant to a cosmetics company takes a lot of creativity.
“It also takes a lot effort to do the fulfillment. And every sponsor needs something different. Burger King wants to be a local sponsor but not do the national campaign. BC Tel doesn’t need national exposure; the auto and tobacco companies want the big campaigns.”
The tobacco thing is a problem. Tobacco is a major supporter of motorsports. But the federal government is proceeding with the anti-tobacco Bill C71 and this could kill racing in Canada.
“Bill C71 has a dramatic effect on our ability to stage this race,” continues Ballantyne. “At one time, C71 was going to ban every car funded by tobacco–Canadian or American. Well, if Marlborough can’t have its name on a car in Canada, Marlborough isn’t coming to Canada. C71, as it was first written, would have put us out of business. But we asked for an amendment and that amendment will continue until the US and Canadian legislation lines up.
“Player’s alone spends $1. million on Indy. But it’s not just the money–Player’s has its own team and driver development program and we’ll lose immeasurable promotional value. We’re negotiating for Player’s to go further, but we’re going to have to replace that money — and we’ve not been able to, despite the fact that we have Canada’s two most successful sponsorship events.”
When asked about the special interest groups who’d like to see alcohol producers knocked out of sponsorship contention, the affable Ballantyne becomes less affable.
“Beer is a legal product with a legal right to advertise. That right is accorded by governments who take tax revenue from that legal product. If the product is going to remain legal, then the people producing the product should be allowed to market it in a way which makes sense to them.”
The Vancouver Indy takes in about $12. million and takes home about $1. million. There are five main revenue-generating areas: sponsorships, corporate hospitality packages, concession licensing, broadcasting and ticket sales.
Molstar is paid for the broadcast by ESPN and the host broadcaster, the CBC; and it provides a world feed to CART. Broadcast production is not a big money-maker, but it helps.
Percentages of merchandise, program and food and beverage sales also sweeten the pot. Molstar doesn’t want to have to worry about feeding 75,000 people so it licenses vendors, from the majors like Burger King, to professional concessionaires, to Mom ‘n Pop operations.
Corporate hospitality packages are marketed as a way of networking, entertaining clients, rewarding employees and meeting celebrities. Corporations buy group-ticket packages or entertain 150 in Chalets, host 20 in Turn One Boxes or, for $25,000.00, buy 40-seat Pit Row Suites. These programs also include things like driver autographs, Paul Newman sightings and passes to the ancillary races (the Sports Car Club of BC Invitational, the Player’s Challenge for the KOOL Atlantic Championship and the PPG/Dayton Indy Lights).
“A company can invest $40,000.00 in the hospitality options — for an international motorsports event, that’s pretty affordable,” says Ballantyne. “Sales go up every year; we had 75 private boxes or suites this year. We market hospitality through direct mail to our existing corporate list and to new sectors — this year, it was doctors, lawyers and pharmaceutical companies. Also new this year was a program to allow home-based businesses to buy seats within private boxes. We always have to think of new things to do.”
Finally, there are ticket sales, with three-day general admission passes priced at $45.00 and three-day seats ranging from $60.00 to $170.00. This is where Molstar spends around $1. million on marketing — ‘not much for an event like this.
“We can’t market Indy without the support of our media partners,” says Wirkowski. “One of our major accomplishments has been to generate tremendous awareness with more contra than cash. In return, we constantly look for ways to provide value for our sponsors, our partners and our fans. We have to make sure that everyone gets their money’s worth.
“We do on-site research to collect data for sponsors and determine how to market ourselves. We find out what Indy-goers want. We sell tickets on-line, we use telemarketing to keep in touch with customers, then we follow up by mailing brochures, maps and information about early-bird offers, which give fans the chance to buy early and get the same seats each year.”
Wirkowski writes the marketing plan for both races. That plan is then tweaked for Vancouver.
“Vancouver and Toronto require very different approaches,” says Ballantyne. “Torontonians like to be part of the Big Happening. Vancouverites are race fans. In Vancouver, the nature of the site makes more of a difference. Toronto has a huge, high-tech trade centre next to the pit lane and the trade show is a much bigger component. Vancouverites want to be outside and be entertained by things unrelated to racing — this year we had concerts, volleyball, rock climbing and dragon boat demonstrations. Indy competes with theatre, football, concerts, golf, vacations — we have to make it appealing.”
The creative for both races comes from BBDO Canada; the day-to-day work is handled by BBDO’s promotional arm, Generator Ideaworks. The race requires tons of material — posters, maps, programs, brochures, sponsorship and media kits, bus kings, billboards, print ads. This year, there was a five-week, four-station radio campaign and an eight-week television campaign.
“We had three things to say this year,” says Jan Fricker, the Indy account director at Generator. “First, that the race was actually on. Secondly, that the new track was better. Finally, that people should buy tickets. We used the lines ‘The World’s Fastest Long Week-End Just Got Faster’ and ‘Think Fast’, and we ran lots of promotions, from little win-tickets things to a car give-away.”
But what about the beer?
Generator president Brad Vettese says that the Indy’s real purpose is to leverage beer sales. “Molson’s interest is to put on a world-class event while reaching into the community in such a way that people will think positively of Molson and drink its products. That’s the overall rationale for having a race in your set of marketing tools. But Molson wants to do things on an image-building, community-minded level as opposed to just a public relations level.”
And it wants to sell beer. So for the fifth year, Generator and Molson produced 180,000 special cases of Molson Canadian — 18 cans packaged in a racing-oriented carton. Inside, there was a pass to the Friday race, and the pass held a number through which holders registered for the chance to be one of 150 guests at a VIP barbecue on race day — on the Thunderdeck, an area at the end of the straightaway.
“This promotion gives the beer-selling side and the Indy side a place to meet,” says Vettese. “It rewards loyal drinkers for staying with the brand and gets other people to switch to Molson.”
Molson markets 17 brands in BC, and Molson Canadian has been here since 1959. Since the inception of the race, however, the trademark has increased by 70%. But Scott Ellis, VP Corporate Affairs for Molson, says that the race is only part of the big picture.
“Indy is a world-class event that happens at the height of the beer-drinking season, and a lot of time and effort goes into building the brand while building the race. All along, you’re obviously trying to make the linkage with consumers. But you can’t do that with one event. You have to do it every day — with professional sports and local baseball clubs and recreational hockey leagues. It’s those things combined with big events that make the difference. But Indy happened because our consumers told us that high-profile sports events were of high importance to them. Our job is to give consumers what they want.”