Ferrari Scraps Barcode Logo

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Age: 28
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Topic on May 11, 2010 09:49 AM

Mercedes unveiled a radically remodeled car; the Red Bull team debuted a sleek new rear wing; but the most significant design change at Sunday's Spanish Grand Prix was a more superficial modification: The controversial barcode logo on Ferrari's Formula One car—paid for by tobacco company Philip Morris International Inc.—has been stubbed out.

The world's most famous motor-racing team has dropped the red, white and black symbol, for which the owner of the Marlboro cigarette brand paid millions, amid allegations that the livery was part of a subliminal marketing campaign designed to circumvent the European Union's ban on tobacco advertising.
The Formula One team said the decision was made "to modify the livery of the cars, starting with the Spanish Grand Prix … in order to remove all speculation concerning the so-called bar code, which was never intended to be a reference to a tobacco brand."

Philip Morris International said it will remain a committed commercial supporter of the Ferrari Formula One team despite the removal of the barcode, which raised questions from the international media and health campaigners following a story in The Wall Street Journal in March.

"We started getting calls after your article on the barcode design… and we have decided to withdraw it to put an end to the story," said Anne Edwards, director of communications at Philip Morris International.

Leading neuro-marketing and branding experts had said that Marlboro was reaping rewards from the barcode logo on the Ferrari cars, both in terms of its brand image, and in encouraging people to smoke.

"What Marlboro has done is create a huge number of what I call 'smashable components' to their brand. They are sending indirect, subconscious signals that are talking to the brain without explicitly telling it we are being sold to … just by showing me a red Ferrari car," said Martin Lindstrom, a neuro-marketing consultant and author of "Buyology," a book based on a three-year, multimillion-dollar research project that exposed 2,000 consumers to branding materials while scanning their brains.

"Even though [tobacco] sponsorship is no longer legal, we carried out experiments just showing a Formula One car, and people immediately craved cigarettes," he said.

A spokesman for the European Public Health Commissioner lent weight to these claims last month, saying that Marlboro's approach constituted potential subliminal marketing.

Ferrari and Philip Morris have consistently denied that the barcode on the car represents subliminal advertising and insist that it is a design feature that forms part of the vehicle's livery.

"The barcode was never intended to be anything other than a neutral design, one that was not linked to the sale of tobacco products," Ms. Edwards said. "It was never intended to be a reference to the Marlboro brand in any way. As part of our partnership with Ferrari we have rights to certain parts of the car. We put the barcode on, which is a neutral design, similar to the barcode you see on any product you buy anywhere. It was never out intention to link the design to tobacco products in any way. so rather than prolong this debate we said, 'Let's take it off.'"

Ferrari said the idea that the barcode design represented advertising for Marlboro was "ridiculous."

Marlboro first appeared as a sponsor in Formula One in 1972 and its logo appeared in a prominent position on Ferrari's iconic red car for more than two decades, until it was replaced by the red, white and black barcode symbol in 2008. The design also replaced the Marlboro motif on the team's distinctive red overalls as part of the Philip Morris's title sponsorship of Ferrari—the team is officially known as Scuderia Ferrari Marlboro.

The value of the tobacco company's partnership with Ferrari is estimated to be between $100 million and $130 million, according to F1 Racing magazine. A Ferrari spokesman said it was "not a correct figure" and the value of the sponsorship was lower.

The decision to remove the barcode has raised doubts over the future of the partnership between Philip Morris and Ferrari, which is the only team in Formula One that retains a commercial sponsor from the tobacco industry. The contract between Ferrari and Marlboro is due for renewal at the end of the 2011 season, but Ms. Edwards said the absence of the barcode from the car livery wouldn't affect the continuing deal.

"It absolutely doesn't affect the future relationship between Marlboro and Ferrari, which remains very valuable," she said. "We get a lot from the relationship, from factory visits to hospitality opportunities."

Sponsorship experts point out that Marlboro's relationship with Ferrari is more complex than is usually the case between a sports team and a sponsor. In return for the multimillion-dollar rights fee—the most valuable team sponsorship deal in Formula One—Marlboro has the right to veto other sponsors since it owns "the real estate of the car" and is at liberty to sublet the space to other, noncompeting sponsors.

Yet the speed at which Ferarri has removed the logo underlines the fact that for Philip Morris, the value of its partnership is about much more than brand exposure. For many of this sport's sponsors, the biggest attraction is membership of Formula One's exclusive Paddock Club—the glitzy, Champagne-soaked extravaganza founded in 1984 that remains one of the most exclusive corporate-hospitality enclosures in sport.

These state-of-the-art hospitality facilities are a fundamental part of motor-racing's commercial appeal. "Major team sponsors such as Vodafone [sponsor of the McLaren team] and Philip Morris International often take specially branded suites within the Paddock Club, accommodating up to 400 people at a time," said Scott Garrett, a director at London-based sponsorship consultancy Synergy and formerly head of marketing at Williams F1.

Mr. Garrett suggests that access to the Paddock Club costs $3,000 to $5,000 per person, with those figures rising depending on the prestige of the race.

"For example, the Monaco Grand Prix would attract a high number of very influential suppliers, business associates and political figures, whom sponsors would seek to influence and develop a business relationship with," he said.

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