The rise, fall and tentative return of tobacco cash in F1

For just over three decades tobacco was the key fuel in Formula 1's commercial engine. More than mere sponsors, the big hitters of the industry were F1's kingmakers. In its pomp, Philip Morris International's Marlboro brand and its delegate, John Hogan, moved and shook: the McLaren team we know today came about as a result of a shotgun marriage Hogan arranged between the ailing post-Bruce equipe and Ron Dennis's thrusting young Project Four operation.

Sponsorship has been part of the fabric of motorsport since the very first organised races, although overt sponsorship was restricted by the Commission Sportive Internationale (the FIA's sporting arm) until late 1967.
 It had become a sticking point because 'invisible' sponsors such as oil companies and spark plug suppliers could only associate themselves with teams and cars in separate advertising, while the tyre manufacturers had their logos in plain sight.

Once the CSI liberalised its stance, teams took full advantage; Colin Chapman's Lotus team wasn't the first to race with full cigarette-brand livery in place, but it was the first prominent team to do it in a big way. Graham Hill was black-flagged during practice for the 1968 Race of Champions at Brands Hatch so his Gold Leaf logo could be struck from the record with parcel tape, but objections diminished with time. Racing in national colours became a thing of the past.

But while cigarette money lubricated countless deals - reaching a peak, perhaps, when British American Tobacco put up the majority of the £30m equity to purchase the Tyrrell F1 team in 1997 - it grew increasingly unwelcome. Not to the cash-hungry participants, but to governments and their advertising regulators. By the turn of this century, teams were having to remove branding entirely in certain territories as ever-tighter regulation barred both explicit cigarette advertising and creative circumventions.

British American Racing rebranded as BAR before selling out to Honda. F1 Racing received a peculiar dictat laying out precisely how the team should be named, including a stipulation that the letters BAR were to be separated by full points aligned to the middle of the row of text rather than the bottom; then-editor Matt Bishop's response was the unusually phrased directive "They can get fucked". 
PMI replaced its Marlboro logo with other graphic devices such as barcodes before ceasing to be a presence on the car.

While PMI retained a commercial relationship with Ferrari, though an outwardly invisible one, the rest of the tobacco industry fled, at an annual cost to the sport (in terms of lost revenue) believed to be well over £300m. Blue-chip sponsors willing to spend that kind of money have proved elusive or prone to changing economic conditions and legalities: for a time, financial institutions such as HSBC, Santander, UBS and ING occupied substantial real estate on leading entries.

Grands Prix, after all, were by nature multinational and a great place at which to network and entertain high-net-worth new business. But the global financial crisis of 2008, together with new laws aimed at combating corporate largesse, put a stop to that.

To look at the F1 grid today is to witness a parade of vehicles largely bereft of big-spending sponsors. Piecemeal commercial arrangements prevail where huge-ticket deals ruled. Other sectors, such as the alcohol and fast-food industries, now run in fear of the kind of blanket regulation that has outlawed tobacco sponsorship.

But Formula 1 hasn't entirely quit the habit. Just over a year ago Ferrari announced a new title sponsor: Mission Winnow, a PMI initiative to communicate that it, as a business, is changing.

Fans and cynics dismissed it as another example of stealth branding along the lines of the late-noughties 'barcode' exercise, but the reality is a delightfully abstruse piece of thinking. The Shorter Oxford Dictionary defines 'Winnow' as a transitive verb, "To expose (grain or other substances) to the wind or a current of air so that the lighter particles (as chaff or other refuse matter) are separated and blown away; to separate the good parts from the bad."

During the 20th century, big tobacco's playbook was simple: spend big on advertising and invest similarly large amounts in black-hat PR activities to negate the growing body of research proving that smoking is bad for your health. That it had become a cowboy industry was vividly exposed in 2000, when BAT was discovered to have been complicit in the smuggling of its product worldwide in order to circumvent taxes and boost sales, market share and revenue.

But consumer habits have changed. Smoking has become more expensive (thanks to rising taxes), less convenient (thanks to laws prescribing where you can smoke) and less socially acceptable (thanks to greater awareness of the health risks). While there are believed to be over a billion smokers in the world, many have quit or turned to e-cigarettes and fewer young people are taking up the habit.

Figures from Euromonitor indicate that the value of the global 'vaping' market has tripled to $15.7bn in the past five years, although this segment of the industry isn't without its challenges. Over 500 cases of lung damage linked to vaping have been reported in the US this year alone, and in late September California's department of public health issued an advisory note to citizens urging them to desist.

Just as the oil industry is adjusting itself to a future without fossil fuels, so tobacco companies are getting out of tobacco. Not only that, they're seeking to put clear air between themselves and the past. They have long since ceased to push back against the scientific consensus.

PMI now positions itself as "committed to designing a smoke-free future" and has pledged to become an innovator in reduced-risk products. Mission Winnow, it says, is a platform to communicate that transformation rather than to push product. You will search in vain on the Mission Winnow website for the word 'Marlboro', and neither are PMI's e-cigarette offerings anywhere to be seen.

BAT announced a partnership with McLaren at the beginning of this season but its campaign, while outwardly similar, has proved more problematic because of the explicit link to product behind the 'A Better Tomorrow' branding. At the launch, BAT's chief marketing officer Kingsley Wheaton said: "It gives us a truly global platform with which to drive greater resonance of our potentially reduced-risk products, including our Vype, Vuse and glo brands."

That kind of statement was bound to provoke some resistance, and in Australia the Victorian state government chafed against what it saw as a blatant attempt to circumvent tobacco advertising laws. Ferrari and McLaren removed their logos - a one-off deal with 7-Eleven replaced the BAT stickerage on the MCL34 and Ferrari again ran without Mission Winnow logos in Canada and France, two territories that are particularly prickly about tobacco advertising.

Mission Winnow remained absent from Ferrari's livery until Japan, while McLaren rotated between 'A Better Tomorrow' and actual product branding, or dropping them in favour of one-off deals depending on local sensitivities. Regulators and fans alike remain cynical about the motives behind these initiatives.

What this reveals are two key challenges facing F1 and the soon-to-be-former tobacco industry: firstly, for F1, the lack of new money coming in. PMI's deal with Ferrari goes back to the 1990s - while it is a revenue stream, it's not new business as such. The BAT deal represents a modest piece of car real estate at best.

For the tobacco industry the challenge is more nuanced. F1 remains a powerful means of communicating a product and an identity. But can it communicate an ideal? Perhaps it can, but for the tobacco companies there are many obstacles to negotiate, the majority of which are their own historic creation.

The signs are that they've shown willingness to change, but there's a long road ahead before that message gets through. The danger for F1 is that if advertising restrictions prevent it from being a useful conduit for that message, the big spenders will simply take their money elsewhere.