Winning Formula

The deals are done. The Formula One factories are quiet. But this Sunday at Albert Park, Melbourne, Australia, the flag will be raised on the 1999 Grand Prix season, and the engines, and the action, will fire again.

There are nearly 250 businesses spending, at a conservative estimate, 300m sponsoring 11 Grand Prix teams, on what some call the biggest advertising launch of the year. The forthcoming season consists of 17 races, with the last one taking place on October 31 in Suzuka, Japan.

F1 has a reputation for demanding large sums of money from its sponsors, as the overheads are staggering. Jordan Grand Prix, for example, is owned by flamboyant former Irish banker Eddie Jordan, and half its 38m sponsorship comes from tobacco brand Benson & Hedges, with further pledges from NatWest, Pearl Assurance and Sony PlayStation.

The team was set up in 1980 and it moved up through the motorsports ranks to enter F1 just over a decade later. It has contested 131 Grand Prix and achieved its first win with former world champion Damon Hill in Spa, Belgium last year. Its best placing in the world constructors’ championship – the team award for the two drivers finishing highest – is fourth.

Jordan has been heavily backed by Gallaher’s B&H brand, with some 19m a year, since 1996. Its aim is to be a major player, along with Williams and Ferrari, in the next few seasons.

The team employs 172 people in two 45,000 sq ft factories next to Silverstone. Forty staff attend every race, and they take three cars and 25 tons equipment with them – and that’s not cheap either.

Standing in one of the Silverstone factories, Jordan’s head of marketing Mark Gallagher points to a piece of machinery the team bought two seasons ago, called a Seven Poster Rig. It is a large metal platform on which one of the seven Jordan cars sits. When lead Jordan driver Damon Hill tests his car in Australia this week, every move the vehicle makes will be recorded by his onboard computer and relayed to the factory in Towcester. There, engineers will analyse the car’s stresses in laboratory conditions on the rig, work out improvements, and send them back to Australia. The aim is to make the car achieve faster speeds on each day of testing. “The rig cost 1.5m,” smiles Gallagher broadly. “Not a lot of teams can afford that.”

This is just one reason why the Jordan team will spend 38m to mount its campaign.

When Hill joined the team in 1997 on a reported two-year contract worth 10m, it was important for business as well as for sporting reasons. The UK is the prime market for sponsor B&H. And the company is keen to have a high profile English driver as part of the team for promotional purposes. In the past, Jordan has employed Martin Brundle and Irishman Eddie Irvine. Heinz-Harald Frentzen comes in as Hill’s number two for this year.

Gallagher says: “We have the final say on who drives for us. But B&H worked very closely with us on looking for an English driver for the team.”

Jordan has lost Spanish oil company Repsol as a sponsor this year for similar reasons. Last year, the team employed Spaniard Pedro Martinez de la Rosa as its test driver, but ditched him for the new season. De la Rosa joined the rival Arrows team and took Repsol with him.

Jordan has 30 sponsors and, naturally, they all come to the sport for different reasons.

B&H sees F1 solely as an advertising opportunity. As Gallagher explains: “It wants the brand to be on TV, in the press, in magazines and all over the media. And it works aggressively to make that happen.”

The B&H deal is handled through M&C Saatchi Sponsorship. The agency’s chief executive Matthew Patten says: “The Jordan team may not be the best on the track, but our aim was to get it to be the most talked about by tapping into the glamour of the sport and the personalities involved.”

For financial services company Pearl Assurance, involvement with the sport is part of a process of changing perceptions of the company. Pearl wanted to show itself as less staid, both to its 3.5 million customers and its 8,000 staff. Internally, the company has drawn heavily on the F1 sponsorship.

The staff canteen in Pearl’s Peterborough headquarters is decked out like a pit-stop. And the company has renamed a meeting suite the Jordan Room. The room, which has been painted yellow, has a table but no chairs. All meetings are timed, and the idea is that managers go there to make quick decisions.

The sponsorship packages Jordan sells range from 250,000 – which would keep a second division football club going for a year – to B&H’s 19m. Depending on the package, the sponsor gets the right to use Jordan’s name and drivers in advertising; the right to make jointly branded merchandise; corporate hospitality packages; and a personal appearance of a driver at a company function.

But as with most sponsorship packages the basic deal is only the start. NatWest’s head of personal cards Jeremy Nicholds says: “We will spend more on promoting the sponsorship than we did on securing it.”

The bank will use national press promotions, and is looking at sponsoring radio sports bulletins over Grand Prix weekends. Forty per cent of its 4 million MasterCard customers in Europe are women and the bank is looking at using Damon Hill’s image in women’s magazine advertising. MasterCard also sponsors the Jordan team in its own right.

NatWest is only in its second year of involvement with the sport and says it is pleased with the results. Nicholds claims the company’s unprompted recall ratings for its association with F1 stand at 13 per cent. The company’s ratings for cricket have reached 20 per cent, but it has been involved in this sport for 15 years. Nicholds is investigating other motorsport opportunities.

Yet success in F1 is measured in various ways.

Nicholds says: “The team gets a lot of coverage when you consider its performance on the track. It punches above its weight. In the UK, it has come to symbolise the sport itself. You just have to ensure you promote your brand so that it gets some coverage, and not just the team.

“We would like Jordan to win as many times as it can, but as long as it remains high profile that will do for us.”

Alan Welman, UK marketing director of another team sponsor, computer games manufacturer Sony PlayStation, says: “If Jordan keeps delivering in media value, to a large extent that matters more than performance.”

However, to the team’s biggest sponsor, winning does matter. B&H had hoped the team would win its first Grand Prix in the 1997 season. “There was a bit of pressure on us from B&H to win a race last year,” says Jordan’s Gallagher.

He adds: “Realistically, we are looking to win one Grand Prix this year. We won our first last year and we want to win another to prove we are consistent. We don’t want people to say ‘they can only score one goal’.”

Some people may question whether all the money, people, and passion is worth the prize of seeing Damon Hill climb onto the winner’s podium just once this year. But a single victory will satisfy Jordan – it will enable the team to go out in the closed season and start to raise that 38m all over again.