Why ITV must drive carefully

The network has moved into pole position for Formula 1 coverage, but it will have to steer clear of alienating sponsors

Today's British Grand Prix is as big a day for the sponsors as it is for the racing drivers and teams taking part. Millions of people will tune in to see if Damon Hill can win on home ground, guaranteeing massive exposure for the brands involved.

Once a sport for wealthy amateurs, Formula 1 is big business now and it is set to get bigger when television coverage switches from BBC to ITV next year. ITV has secured the rights for five years with a reported, though still unconfirmed, pounds 70m bid. It has vowed to invest heavily in developing the sport as a television event, broadening its audience by creating programmes around the races and the personalities. Brands keen to share a piece of the action will hear more at ITV's celebrity launch in London next Monday.

Formula 1 will be a powerful weapon in ITV's battle for ratings, says Ian McCulloch, the operations director at Laser, ITV's sales house. The profile of the sport's fans, "adult, male-biased, up-market, youngish", neatly matches that of the commercial clients driving ITV's business: telecommunications companies, financial services suppliers and car manufacturers.

"Having lost much of football, boxing and horse racing to rival channels, we can now once more offer something that is going to be live and exclusive on ITV," he says. Exclusive on terrestrial television, that is. Details emerged last week of talks between BSkyB and the Formula One Constructors' Association, which holds the rights. Sky would like to use Formula 1 for future digital television channels. Even so, the sport promises ITV a strong card. Mr McCulloch says: "It's like athletics at its best, when we had Ovett, Coe and Cram, only with Formula 1 it is 16 races around the world, spanning 32 weeks every year."

ITV wants to build Formula 1 into a personality-led, televisual event and has pledged it will broadcast every race live. This commitment helped it clinch the deal. Even so, teams and sponsors alike are yet to be convinced of the wisdom of the move. With team sponsors already featuring prominently on cars and drivers' clothing, there is a danger of clutter diluting commercial messages since television coverage is also sponsored and other brands advertise in the commercials that will punctuate the previously uninterrupted coverage. "ITV has an enormous amount to prove. The BBC has done it, and done it well, for so many years," says Andrew Marriott, the media consultant to Silverstone and director of motor sports at CSS Promotions, the sports marketer. "ITV has a tradition of adopting a brasher approach - more personality-led. They are taking over a success but are likely to try harder, which is bound to be a benefit."

Jim Wright, the Williams team's senior acquisitions manager, sponsorship and marketing, adds: "There are two possibilities - ITV could either offer an opportunity to existing sponsors to extend their commercial messages, or diminish overall impact." Commercial breaks could detract from his sponsors' deals, he says: "Other brands could reach similar audiences for less money." The depth of coverage promised by ITV will be the decisive factor, he believes.

Brushing aside press speculation about the future involvement of Murray Walker, the BBC commentator who has been the face and voice of Formula 1 commentary for many years, Mr Wright says: "Scheduling is more important, whether they will alter prime-time schedules, for example, for live coverage of the Canadian Grand Prix, which they do appear willing to do."

Others welcome the opportunity to broaden the sport's appeal beyond the aficionado, though sceptics point to ITV's record. "Look at Euro 96: when both ITV and BBC broadcast matches BBC won every time, hands down," another sports marketing source observes. "There is a suspicion that ITV cannot do sport as well," she adds. It is a suspicion Mr McCulloch is eager to play down.

"We have canvassed manufacturers, teams and sports fans to assess the BBC coverage's weaknesses and where we can improve on this," he says. Research is also under way into how viewers will react to commercial breaks, where they should run and for how long. The results of this, along with how the coverage will be sponsored, will be announced next Monday.

ITV remains confident it can develop Formula 1's UK audiences from around 5 million to 6 million a race. If so this can only strengthen the position of teams like Williams with their sponsors. Many existing Formula 1 players are already discussing how they can buy the television sponsorship rights too. Tobacco companies, the sport's biggest sponsors, are also likely to benefit as the Independent Television Commission does not intend to veto the broadcasts, though it will monitor how overt the tobacco branding is when Formula 1 launches on ITV next March.