Spending Their Way Out of Recession

The well-reported Schaeffler/Conti saga aside, the largest tyre companies are not acting like most of the nations in the western world and seeking to heavily increase their borrowing in order to invest. However, neither are they cutting off all their spending. Shrewd businesses know that while they may have to tighten their belts in tough times, cutting off spending in a downturn can do more harm than good. Premium tyre manufacturers for example are now be seeking to defend their market positions from the de-segmentation trend (cost conscious consumers switching to mid-range) that was predicted by a range of analysts at the end of 2008.

With this in mind, Bridgestone’s decision to sponsor American Football’s Super Bowl XLIII is particularly interesting. Often dubbed “advertising’s biggest stage,” viewers on 1 February saw two new adverts by Bridgestone, broadcast alongside the NBC network’s coverage. Not only is it advertising’s biggest stage, but at $2-3 million dollars for 30 seconds of airtime, it is also the most expensive.

The Superbowl’s famous Halftime Show was also sponsored by the manufacturer. Both adverts represent an attempt to reinforce the company’s strap line – “For drivers who want to get the most out of their cars… it’s Bridgestone or nothing.” “When it comes to getting your message out there, no advertising opportunity compares to the reach and impact of the Super Bowl,” said John Baratta, president, Replacement Tire Sales US and Canada, Consumer Tire Sales Division.

However, as Tyres & Accessories went to press, news broke that the Japanese based manufacturer was also making symbolically significant cuts in its motorsport spending. Having earlier signed a three-year control tyre supply deal for MotoGP, Bridgestone is apparently walking away from two decades as headline sponsor of the All-Japan F3 Championship. Korean manufacturer, Hankook is poised to take over. After twenty uninterrupted years of sponsorship, the series will new see all competitors running on Hankook rubber until at least the end of 2010.

Hankook Tire is obviously set on taking strides towards to increasing its market presence despite the market conditions and will no doubt see the All-Japan F3 deal something of a coup as it is the only series in Asia able to award an FIA F1 superlicence to its champion.

But while some companies are strategically refocusing their motorsport sponsorship, and at the same time by default allowing competitors in to replace them, other companies continue to see motorsport tyre supply as an income stream rather than an expensive marketing luxury. Take Dunlop UK’s motorsport wing for example. T&A recently learnt that far from grinding to a halt due to amateur and professional drivers having to count their pennies, it was actually the fastest growing part of the company’s business in 2008 with sales up 5 per cent year-on-year. So is spending or saving the answer? If Bridgestone’s recent sponsorship decisions are anything to go by, can’t it be both?

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