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What F1 really needs to do to crack America

NEWS STORY
08/10/2018

Few Formula One races get their marketing as right as the United States Grand Prix. Even though it is held around 15 miles outside Austin, you would be hard pressed to find a restaurant, shop or hotel in the city which isn't aware that F1 is in town during race weekend.

As in Montreal, where the city's famous Crescent Street comes alive at night during the Grand Prix, Austin's famous Sixth Street looks more like a carnival when the race is on. The bars and restaurants are packed, outdoor barbecues are the norm and the crowds on the street put Christmas Eve shopping to shame. The big difference is that Austin pulls this off despite its Circuit of the Americas track being around four times further away from the city centre than its counterpart in Montreal.

No other privately-owned F1 track has managed to rev up interest in the local area better than COTA. It even overtakes the impact made by events at some of America's oldest circuits. When NASCAR's Coca-Cola 600 takes place at the Motor Speedway just outside its home town of Charlotte it isn't uncommon to find taxi drivers, hotel and restaurant staff who aren't aware that the race is on.

In fact, to find a motor sport event in America which makes a greater impact on the nearby area than the US Grand Prix you have to look to the Indianapolis 500 and of course street races like Long Beach. However, their popularity is fuelled by decades of history whereas this year's US Grand Prix, which takes place in two weeks, is only COTA's seventh.

The 3.4-mile track is the first in America which was purpose-built for F1 and soon became a favourite of the racing community as it is based on memorable parts of other circuits. The high-speed left-right bends in COTA's first sector were inspired by Silverstone's Maggots and Becketts complex, while the tight and twisty section that marks the beginning of the final sector resembles the stadium section at Hockenheim.

Innovative marketing strategies have driven its popularity. It has attracted non-race fans by hosting concerts with stars like Taylor Swift and each year COTA commissions a modern spin on the classic Art Deco posters from F1's heydays. Their striking style pulls in a new audience and appeals to petrol heads as they feature current cars against a period backdrop. The latest can be seen right and is available to buy on the following here.

They are produced by design agency Crooked Cartoon for Zoom which is known in F1 circles for selling signed photos taken by the drivers with the proceeds going to charity. Austin's Center for Child Protection gets a cut of the US Grand Prix poster sales which have raised more than 3,000 for it since they were launched in 2016.

So it gives a boost to the local area as well as spreading the word about the race. It makes an impact as the announcement about the new poster has been Liked 185 times and Retweeted a further 47 since it was posted by COTA last week. Other partners have driven even more exposure.

At the top of the list is the NBC Sports Network which took over as F1's US broadcaster in 2013. According to NBC, its live F1 audience grew nearly 70% over the five years of its contract which ended this year when it switched to ESPN. Last year alone NBC's Total Audience Delivery rose 14% on 2016 to 558,000 making it the highest F1 viewership for a single US cable network in more than 20 years. This was just the start.

NBC was much more than a broadcaster and acted more like a promoter for F1 in the US which still only has one race despite the accelerating interest in the sport. NBC promoted F1 during the Super Bowl and its mighty Sunday Night Football NFL show which has around 20 million viewers. In 2014 and again last year it lined up appearances for Lewis Hamilton on NBC's morning programme, The Today Show, which gets another four million viewers.

If NBC had broadcast F1 this year "it would have been promoted throughout the Ryder Cup or throughout the Kentucky Derby or the Stanley Cup play-offs in advance of Monaco," says a senior source at the network. It also ran adverts for the US Grand Prix across its group of channels during the month before the race to help drive ticket sales. The source adds that NBC was even "willing to help F1 find additional venues in the United States like Miami and New York." They are of course two cities which F1 has said it wants to host races in and the NBC source says that "our television stations have strong footprints there."

After Liberty Media took control of F1 in January last year it unexpectedly put the brakes on the relationship with NBC, getting off to a rocky start when Liberty's boss Greg Maffei famously described NBC's estimated $4m annual fee as a "popcorn fart" and it went downhill from there.

It finally came to a crossroads when Liberty announced its plans to stream F1 directly to viewers online as well as using traditional broadcasters. TV contracts in markets like the UK prevent F1 from competing with the broadcasters by streaming the races but Liberty refused to give ground in the US even though the audience there is not as mature as it is in Europe. Liberty hasn't had an easy ride.

Before the streaming service even launched, investment bank Morgan Stanley forecast that it would only attract 10,000 subscribers in the US. At an average annual fee of around $100 each it would come to just a quarter of the amount that NBC paid assuming that the forecast was met. F1 Subscriber numbers haven't been released but it wouldn't be a surprise if they haven't reached the projections given that the service has been beset with so many glitches that F1's boss Chase Carey was forced to admit it will get "a proper commercial launch next season."

The streaming service drove NBC out of the market as it didn't want to compete with F1. It led to F1 moving to ESPN which is paying no fee according to Morgan Stanley.

So not only did F1 lose NBC's $4m fee, it isn't recouping the money from ESPN. Instead, F1 has to rely on the subscriptions from its streaming service which were only projected to hit $1m before the chaotic launch. This has also fuelled a deeper problem which is far less obvious.

ESPN hadn't broadcast F1 since 1997 and it soon showed. Rather than sending a crew to each race it opted for the easier solution of simply using Sky's coverage and inserting its advertising schedule into it. This meant that ad breaks appeared at seemingly random moments with no explanation afterwards of the on-track events which had been missed as the Sky commentators weren't aware that ESPN was cutting to commercials. It stands in stark contrast to NBC's picture-in-picture view which allowed viewers to keep up with the action during an ad break.

ESPN fixed this problem with an innovative solution. It secured sponsorship from car cleaning product Mothers Polish and now runs the entire race without ad breaks. It's a benefit to viewers but perhaps not to F1 itself.

A consequence of having no ad breaks is that American brands which want to promote themselves to viewers in the country can no longer advertise during the race broadcast. Pitpass understands that many of the brands which previously did this during the NBC broadcasts have instead switched their money to advertising during NASCAR and IndyCar. It doesn't stop there.

What if sponsors of teams want to promote their partnerships during the ad break whilst the US Grand Prix, or indeed any race, is being shown on ESPN? It seems to be a roadblock to this route of communicating with F1's fans. So instead of planning more US races to drive interest in F1 perhaps Liberty should first consider how to smooth out the dents that have been made by its streaming service and the switch from NBC.

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READERS COMMENTS

 

1. Posted by austin, 14/10/2018 5:25

"Yeah, COTA's downtown Austin Fan Fest was so successful that this year they stopped having it. "

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2. Posted by Cigarsmoker, 11/10/2018 18:09

"I'll have to check on that kind of accommodation in Austin. I don't think I'll ever make it to Monte Carlo but its on my bucket list..."

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3. Posted by Joop deBruin, 11/10/2018 3:27

"Cigarsmoker, if you want to have a bit of fun, check hotel prices in Nice or Monte Carlo during the Monaco GP.
Low of $2,500/night to $10,000/night in Monte Carlo. The cheapest normal hotel in Nice is ~$750/night. We stay at what's considered a near B&B here in the States for <$100/night in 2 bed/1 bath with a huge balcony overlooking the Med. It's way above Nice's coast, yet a short walk to the train to Monte Carlo."

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4. Posted by Cigarsmoker, 10/10/2018 22:56

"I agree that the ESPN broadcast has improved over the initial attempts. I salute Mother's for their support with little or no real promotion of their products, just a few words in the beginning and at the end of the broadcast. I also miss the multitude of post race interviews with the other drivers. Martin's pit walk is unbelievably amateurish. I am beginning to understand the accents a little better, but all in all I prefer the NBC crew and coverage better.

I have attended F1 races in both Montreal and Indianapolis and enjoyed each location immensely. As has been pointed out - they do it right! The entire city is on board and its a fantastic experience. Indianapolis was also a good experience the three times I attended (except for the race that was not a race.) In both locations local hotels and restaurants were reasonably priced. I have not gone to Austin yet (ever?). Finding a hotel with a reasonable price has not been possible. Even hotels in towns 30 or 40 miles away have been jacking up their prices. (Although I have to admit I haven't even checked in the last two years.) I look forward to attending one of these years but I'm not interested in paying $400+ for a $150 room. "

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5. Posted by mickl, 09/10/2018 12:15

"@ Joop deBruin I think you were probably watching MTV rather than the race. I guess all the other commentary teams had actual former F1 drivers with recent driving experience. What a plank."

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6. Posted by GregT, 09/10/2018 5:15

"I think you're giving the COTA marketing department way too much credit. I went to Austin for the IMSA/WEC doubleheader in 2016 which took place one month before the USGP. In 5 days there, I never heard a commercial for either race and only saw a couple billboards promoting the USGP. The circuit itself couldn't be bothered to have its fan activities or concessions fully open on the Thursday practice day despite 13 hours of track activity. As for downtown, the folks I know in Austin pointed out that the fan fest got smaller with each year and a quick search suggests it is nonexistent this year, as is the local newspaper coverage of F1 with no articles in the Austin American-Statesman relating to the Japanese GP. Likewise, several grandstands have disappeared since COTA first opened. There's a reason they've lost IMSA, WEC, and Supercars. "

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7. Posted by Joop deBruin, 09/10/2018 3:38

"The laughing, under the table hand job crew from Sky sucks. Whether you compare them to NBC, Speed Network or the Goat Humpers' online streaming.

They don't know Jack Sheisse about engineering, or teaching in general. DeResta is resting for a reason, he's a fourth rate has been.

The entire broadcast is nothing but giggling and "who's shagging who," hence the regular references to Hammy & Beiber.

F Liberty and their rotten online presence through their Slumdog Millionaire "digital partner.""

Rating: Negative (-3)     Rate comment: Positive | NegativeReport this comment

8. Posted by bobbiemartin, 08/10/2018 22:45

"We've been to Austin twice and I can assure you once you get out of downtown few if any know a race is going on (for that matter, what an F1 car is). Indy was marginally better in that regard, but not much. In Montreal, on the other hand, everyone knows a race is going on.

So people complain about the accents on Sky vs NBC? NBC had 2 Brits and an Aussie. As I recall, you wouldn't mistake any of them for Darrell Waltrip. I liked the commentators on NBC, but as others have said, having 3 people watching TV in a studio hardly compares to the full team Sky has on site. I was a but worried when ESPN got F1 (although they had it years ago) and the first races were a goat rope, but given the choice, I would take the current ESPN/Sky broadcast. "

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9. Posted by austin, 08/10/2018 20:25

"Yeah bfairey, I really think PdR brings a lot to the broadcast, as do Ted, Ant, Martin, Rosberg, Hill,and others. Even Johnny sometimes! And again, my bad re: the bit about the accents. If I could edit my post I would redirect that toward Steve Aikens. "Glaring issue" is a massive overestimation imho."

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10. Posted by bfairey, 08/10/2018 20:22

"Thats not a party in a brewery, thats a pissup in a brewery."

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11. Posted by bfairey, 08/10/2018 20:16

"I think Paul Di Resta is great but then I.m a transplanted Brit."

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12. Posted by austin, 08/10/2018 20:07

"Indeed, my mistake about the 'accents' comment. I stand by the rest. "

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13. Posted by Chris Balfe (editor), 08/10/2018 19:59

"@ 'austin'

Re: "The author also goes on to complain about the thick accents of the Sky crew. Here he's presumably referring to Paul di Resta, a Scot, and ascribing that trait to the rest of the crew, as none of the other Sky crew"

Think you'll find that comment is from a viewer in the US and not the "8th grader author""

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14. Posted by austin, 08/10/2018 19:51

"As for the talk about the NBC studio broadcast vs what Sky does, that whole sequence looks as if it were written by an 8th grader. Three guys in a remote booth somewhere for NBC vs the 10-15 racing & racing media personalities Sky has on the ground all around the track, in the pits, and in the paddock? C'mon, it's not even close. I like the NBC guys, but NBC were never going to allow them to do anything even remotely resembling the kind of comprehensive and in-depth coverage Sky does. The author also goes on to complain about the thick accents of the Sky crew. Here he's presumably referring to Paul di Resta, a Scot, and ascribing that trait to the rest of the crew, as none of the other Sky crew are even the least difficult to understand - certainly not any more difficult than the Aussie & 2 Brits NBC had in the studio. Hell, I can understand Di Resta just fine, and he brings a lot of great analysis, as do the rest. All you have to do is listen."

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15. Posted by austin, 08/10/2018 19:29 (moderated by an Adminstrator, 08/10/2018 19:34)

"The author seriously must be joking if they think the F1 effect in downtown Austin is even remotely in the same universe as that in Montreal. The author talks about the Austin 6th Street crowds during F1, but what he/she fails to understand is that those are normal crowds for 6th Street on any weekend throughout the year. COTA just plopped down their stage in the middle of crowds that would be there anyway. Those are overwhelmingly college kids that go there every weekend and some weeknights, not visiting F1 fans. Indeed, much like COTA's declining race crowds and shrinking reserved seating capacity, COTA's downtown Fan Fest dwindled progressively each year until it was finally moved to COTA's Austin 360 Amphitheater to guarantee a fan response. Meanwhile Montreal has massive crowds all over the downtown area and Crescent Street all week long during GP Week, and they have 3 different Fan Fests, any one of which dwarfs Austin's week attempt at it.

Simply put, when talking with marketing reps in Montreal over GP Week in 2017, they stressed that their presentation in Montreal is top priority, while Austin is "not even on the radar". Her words, not mine.

Seriously, this reads like a paid advert to support the economic impact claims of a track that would die off without the roughly $200 Million in funding provided to it by the taxpayers of the State of Texas, paying its sanctioning fees over the last 7 years.

"

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