(Written in March, 2000)
THE ‘DOT COMS’ AND FORMULA ONE: The major source of income for Formula One motor racing has traditionally been the tobacco companies, with advertising revenues accounting for no less than 70 per cent of the sponsorship fees, upon which the racing teams depend.
The sponsorship of Formula One has potentially vast returns, and it comes as a blow to the tobacco industry that legislation is forcing it out of the racing game. European directives call for a complete ban on tobacco advertising by 2006, obliging new sponsorship to be brought on board as soon as possible.
Leaping to the rescue of Formula One comes the 'dot com' companies, already inculcating their advertising in every conceivable walk of life. The opening race of this year's season, staged in Melbourne, saw teams sponsored by familiar names such as Compaq and Yahoo!
Unconfirmed rumours imply that Yahoo! is spending $16 million to be associated with Prost, and previous advertising costs have run as high as a million dollars to place a company name on a wing mirror. However, the market that can be reached when such advertisements are placed is huge, with an estimated 300 million viewers watching the races in 200 countries.
The Formula One season lasts for months and is acted out on a global stage, and there is no shortage of interested vendors waiting to fill the holes being left as the tobacco sponsors are forced into the pits.
The last US Superbowl saw phenomenal advertising rates, and it is still open to debate how effectively that money was spent, but the sporting arena is still seen as being a highly lucrative one.
Commentators are now pointing to the existing close connections between high-tech companies and Formula One, but at the end of the day, this is merely another exercise calculated to promote dot com brands through every available channel.