It's alternatively called 'promotion', 'advertising', 'SPIN', 'hype' ... or just plain expensive. Whatever way you choose to look at it, competition in today's environment has proven that marketing forms an essential part of the thoroughbred selling equation. As Head of Marketing for Magic Millions, Annie McDonald, states, "Marketing in conjunction with sound financial management, the best bloodstock services and selection processes forms one of the four central structures for achieving increased sales and returns for a company".

Earlier this year I invited comment from the Head of Marketing at each of the auction houses. Inglis declined to comment but both Magic Millions and New Zealand Bloodstock responded. Their comments serve as a very useful exercise to all in the industry re the importance of marketing in raising a company's public profile.

Annie McDonald is Marketing and Media Manager at Magic Millions, a position held for the past three years. Annie has worked in the thoroughbred industry for the last 14 years, and apart from having had an association with horses all her life, she gained formal qualifications via a Bachelor's Degree in Marketing and Public Relations (majoring in Journalism) as well as a Diploma in Horse Business Management (from Marcus Oldham College)

QSTN: "In your opinion, how has the marketing role changed over the past ten years in terms of promoting thoroughbred sales (generally) and your premier sale (more specifically)?"

ANNIE: "There have been so many changes in the past 10 years - the main factor being we now have the advantages of technology to assist us in our complete marketing function - from efficient and fast production of pedigrees and catalogues for sales, through to cost effective international travel and being able to communicate with our clients in different languages all over the world. The "tools of the trade" we have available to us now enable greater market saturation, directly, comprehensively, and efficiently.

QSTN: "How significant do you believe the marketing role is in influencing the final sales outcome?"

ANNIE: "The marketing role is a broad ranging and essential element, which in conjunction with sound financial management, the best bloodstock services and selection processes, assists in driving sales and achieving returns for the company."

QSTN: How much effort is expended attracting overseas buyers versus local buyers?

ANNIE: "The target markets change with every sale we conduct and is dependent on the product (pedigree and type of horse) we are selling. For our "flagship sale" (the January Yearling Sale), Magic Millions will invest significant resources in marketing to established and emerging international markets. We maintain a commitment also to market on a local level. The approximate breakdown for January yearling sale - international promotion 70% and local 30%."

QSTN: In your opinion what were two "stand out" marketing initiatives that Magic Millions used in 2004?

ANNIE: "Magic Millions was a major influence in the development of new taxation laws exempting overseas buyers from paying GST. This provided a great incentive for international buyers to purchase in Australia In addition, the lifting of quarantine restrictions in some key emerging markets, allowing private owners to import their own horses has assisted in generating sales."

QSTN: How important is the Internet in your marketing mix?

ANNIE: "As a communication tool it has become essential - it enables the fast and efficient transfer of information via website and email".

Why Marketing?

Using marketing to promote the Industry stretches back generations. States (and ultimately countries) have always jostled for the attention of buyers, the lure of outside money and sufficient profile to attract the best stallions and those who wanted to breed their mares to them.

Then, as now, this means investing in publicity.

Some people may look at the use of race series promotion and think 'revolutionary - we should have thought of this years ago!'. In truth, the royalties for such ideas should probably be given to the estate of a Louisville man 'Yelverton Oliver' who, in 1839 promoted a race series in Kentucky to give the Bluegrass the edge over its breeding competitors in Virginia, Maryland, New York and the Carolinas.

Surrounding factors

Of course, a race series alone will not grant you the necessary publicity you need. Horses that not just win but go on to assume 'champion' status will always help. In this light Magic Millions had (amongst a swag of others) the Triple Crown juvenile star by the name of Dance Hero; Inglis had international performers Choisir and Silent Witness.

The Schemes

But back to race series and bonuses for a moment. In 2004 the various auction houses offered the following bonuses to sale graduates/owners and vendors:

INGLIS:

The jewel in the Inglis crown is the $1M Inglis 2YO championship to be run at Flemington in Autumn 2005 (only graduates of the 2004 Premier, Premier II and Classic Yearling Sales eligible for entry). First acceptance fee $1650. Vendor of 1st horse also to receive $50,000. Inglis also has lesser bonus races for graduates of the 2004 Classic Sale (Inglis Classic - $300,000, to be run at Warwick Farm in January 2005) and the 2004 Sires Produce and Scone Yearling Sales (Scone Winter Challenge - $200,000, to be run at Scone in May 2005), both of which also include vendor bonuses.

MAGIC MILLIONS: On offer was the $3.55 Million Sale Race Series for graduates sold in 2004 (promoted as the richest sales race series in the world.) The $3.55m would be split as follows:

Jan 2005 MM 2YO Classic Gold Coast $1 Million
Feb 2005 MM Adelaide 2YO Classic Adelaide $400,000
Mar 2005 MM Perth 2YO Classic Perth $150,000
Jan 2006 MM 3YO Trophy Gold Coast $1 Million
Jan 2006 MM Open Cup Gold Coast $400,000
Jan 2006 MM Open Sprint Gold Coast $200,000
Jan 2006 MM Stayers Cup Gold Coast $100,000
Jan 2006 MM Fillies & Mares Gold Coast $100,000
Jan 2006 MM Maiden Trophy Gold Coast $100,000
Jan 2006 MM 3YO & Above Restricted Gold Coast $100,000

One nomination fee of $2,750 inclusive of GST qualified a purchase for all of the abovementioned races. (Perth only race $495 inclusive of GST). Plus, for eligible graduates sold in 2004 there was the international owners incentive of the September 2005 Malaysian Magic Millions 3YO Classic in Penang with prize money of RM325,000. There was also a new Magic Millions Race for all prior Magic Millions Graduates that have previously paid up for the Magic Millions Race Series in January 2005 - MM Open Handicap at the Gold Coast with prize money of $400,000.

NEW ZEALAND: New Zealand Bloodstock offered a $500K 2 yo classique race in January 2005. They also offered a buyer reward programme (a set sum to assist with travel expenses [and dependent on country from which buyer traveled]). In addition there was the New Zealand Thoroughbred Bonus Scheme (bonuses available over 2 YO, 3YO and 4YO seasons). $15,000 and $7,000 bonuses, percentage payout to 1st, 2nd and 3rd placegetters, 10% to winning trainer, 10% to nominators of winning foals - eligible whether or not a horse sold at auction.

Magic Millions went for brand identity– same style for each sale except a different colour cover for each State, a gold band at the bottom of each cover with the State's name in it and a different image in the top left hand corner. Thus, a wave was the chosen image for the January Premier, sun setting for Perth and glass of champagne for Adelaide. In a major shift, Magic Millions also started to incorporate advertising in their catalogues.





Inglis went for photos of past champions on their front cover – Choisir took pride of place on the Classic cover; Fields of Omagh on the front of the Melbourne Premier ... but this branding exercise then seemed to run out of steam and by Easter we were back to the traditional green cover.





New Zealand Bloodstock went for a branded identity - same style just different colour for their Premier/Select sale.





Inglis and Karaka both had the colour pages at the start of their catalogues paying tribute to past champions of the sale in question.

Size of catalogues

MM Premier: The first sale in 1986 saw a fairly moderate catalogue of 220 yearlings go under the hammer. In 2004, the January sale offered a 4-day 'Premier' section consisting of 710 lots and a 'Select' catalogue on Day 5 of 274 horses.

Inglis Classic: 504

Melbourne Premier: 510; Premier II 125

Inglis Easter: 497

MM Perth: 523

MM Adelaide: 662

Karaka: Premier 515

Karaka: Select 1097

As we head towards the 2005 sales it is perhaps worth a short pause to reflect on the year that was - the year where 11 yearlings cracked the seven figure sales mark, Easter blew all sales figures out the window, Magic Millions celebrated 20 years, and 3124 yearlings went under the hammer.

It was January 2004 - the US and European auction houses had just come off the back of record breaking sales, leaving the Australian vendors bristling with New Year enthusiasm. It was the year of Danehill's final offering of Australian conceived progeny; and the last progeny - globally - of the mighty Sunday Silence.

SARS had faded to a distant memory. January may have provided the hint of another potential pandemic - this time with avian flu - but thankfully that came to nothing more than media hype and there was to be no consequent fall-out from the Hong Kong buying bench at Easter. Elsewhere in Asia the Koreans arrived with a flourish at the Classic sale. A couple of high profile bloodstock agents were also spotted in China a few times during the early part of the year giving rise to rumours that the China market may not be as dormant as many would have us believe.

'Globalisation' continued to make its presence felt. At the Magic Millions January sale alone at least 30 sires that had quality yearlings on offer in Kentucky or England, Ireland or France late in 2003 also had yearlings on offer a good number of kilometers south of the equator as well.

The equine flu appeared in South Africa. The Australian currency suddenly flourished against the USD and those pegged to it such as the HKD and the UAE dirham. As catalogue size increased for various sales the usual gripe appeared that there were simply too many yearlings for sale. There was also the not so comforting report that getting a yearling from conception to sale (ignoring the initial service fee) would leave vendors with little change from AUD$15,000.

Auction houses

In the Premier League Sales, Inglis, Magic Millions and Karaka went head to head in their, oft times, sophisticated marketing wars. Long gone were the days when these companies didn't employ marketing teams and spend countless dollars promoting their sales. Pick up any thoroughbred related magazine published in December 2003/January 2004 and the weight of promotional material made the remaining content a bit light in comparison.

BRANDING

Each auction house faced the challenge of differentiating their sale to maximise buyer interest. Some sales - such as Inglis' Easter (and increasingly January's MM sale) - stand out on brand; others such as the Melbourne Premier and NZ Premier still struggle to really stamp themselves as different.

Classic: Classic is renowned as a "type" yearling sale; despite that there were a number of pedigrees on offer as well. There were 46 withdrawals. 6 vendors had yearling photos available on Inglis site. Of 504 catalogued, 390 were sold (clearance 85.7%); average 34,646 (up 16.7%) and total turnover AUD$13.51 million.

Premier: There was still no clear 'differentiator' for the Melbourne Premier sale in 2004. Inglis have successfully improved the sale over past years and the pedigrees in this year's catalogue reflected that. However the marketing department still weren't able to really 'label it' as was shown in the summary on the Inglis site early this year: "The positive atmosphere generated by the runaway success of the Melbourne Spring Carnival has provided the perfect prelude to the 2004 Premier Yearling Sale. This showcase event will feature 510 of the finest young thoroughbreds in the State, setting a new standard in excellence for bloodstock sales in Victoria." And the difference there (apart from the fact that it is held in Victoria) would be what exactly?. There were 25 withdrawals. 3 studs had photos available on Inglis site. 375 sold from a catalogue of 510 (clearance rate of 79.3%); average of AUD$48,712 (up 18.6%) and total turnover AUD$18.27 million.

Easter: "Depth of quality is what sets the Australian Easter Yearling Sale apart from its major rivals" said the website and they were spot-on for Inglis' blue ribbon event. 129 youngsters from stakes-winning mares as well as siblings to some 200 stakes-winners of which 50 have been successful in Group One competition were on offer. Inglis have been very committed to promoting this sale internationally and the results speak for themselves and seemed to take even Reg Inglis by surprise. Of 497 yearlings catalogued, 370 were sold for a clearance rate of 81.5%; an average of AUD$204,736 (+41.1%) and a turnover of AUD$75.75 million (increase of 37.3%). Even before Inglis smashed every conceivable record at their Easter sale the 'Sale of all Sales' was already making headlines courtesy of the number of yearlings on offer that had been conceived in the Northen Hemisphere. They included progeny of:

• Sunday Silence: colts from Bright Finish, Lurestina & Sonoray.
• Green Desert: a colt from Cloudy Skies.
• In The Wings: a filly from Tambara.
• Mark Of Esteem: a colt from Mythical Play.
• Rahy: a filly from Nimphidia.
• Saint Ballado: a colt from Backcountry & fillies from Nuryeva & Splashing.
• War Chant: colts from Memories & Volavola.


Magic Millions Premier: It's hard to believe that Magic Millions have grown so much in the past 4 years. Despite the company's relative youth (just 20 years) their promotion of their 2004 Major sales series (Brisbane, Adelaide, Perth) was a text book study for anyone wanting to understand how the marketing mix (the combination of marketing tactics an organization uses to communicate with its target market: advertising, public relations, trade shows and events, etc. Product, price, and place are also key components of the marketing mix) should work in practice. Their well-marketed 'Brisbane Carnival' (races plus social) is as much a part of the Magic Millions as the sale of horses these days. (Note that the 2005 Adelaide format is set to follow the Brisbane precedent). The January sale horses are starting to brand themselves as 'type-typical' - well conformed, well grown yearlings and the pedigrees are starting to rival Inglis' in many instances. Most importantly, the horses from this sale seem to perform exceptionally well at stakes level. Apart from the video feed of the Sale (which the company got right later in the year - but didn't have right in Jan 04) Magic Millions produced a whole host of innovative marketing tactics including extensive international promotion, a very focused press release service, online video footage of more than 100 yearlings, an online fully searchable catalogue, a range of social events to complement the Magic Millions Race Day, and a half hour documentary of the 'record Breaking' 2004 Conrad Jupiters Magic Millions Sales & Racing Carnival which aired nationally on Channel Seven on Sunday 18th January 2004. Of 710 catalogued for January 2004, 564 sold (clearance rate of 85.5%); for an average of AUD$110,063 (up 19.7%) and total turnover of AUD$62.08 million. Of note - in 2004 MM went for record sized catalogues - something that prompted its share of debate.

NZ Premier: The 'brand' for the NZ sale is a difficult one to categorise (which most marketers would be troubled by) as in many ways it competes alongside the Australian sales and so is considered in the same basket (rather than being considered on a 'per country' basis). NZ marketing therefore tends to focus on enjoying the 'lifestyle'/'environment' as much as the sale, and significant inroads have been made in marketing the sale in Asia, providing vendor incentives and also taking groups of potential clients on a tour of the studs prior to the sale to generate increased interest. 515 lots were catalogued for the Premier sale with 400 sold (83.3% clearance), and an average of AUD$97,466 and turnover of AUD$38.99 million. A unique marketing differentiator offered at Karaka in 2004 should not go unmentioned however. Jane Smiley (Horse Heaven) once wrote: "Thirty-two thousand foals mean thirty-two thousand stories, because a Thoroughbred never goes unnoticed or undiscussed. And most of the stories are the stuff of drama". In a similar vein, New Zealand Thoroughbred Marketing also chose to tell the story of 51 lots at its Premier 2004 sale. Vendors, pedigrees and final sale results were covered from the Pencarrow offered lot 509 b.c.Danehill-Grand Echezeaux (Karaka's top lot) that sold to David Ellis for $1.1 million, to the million dollar Danehill/ Push a Venture colt (from the family of Riverman and closely related to Danehill's champion son Rock of Gibraltar who had been the darling of the media in the lead-up to the sale) right through to a couple of lots who grazed in at $27,000 - nowhere near covering their production/preparation costs ... each story added a very personal element to the NZ Majors and all were worth following.

Today's post is written by JOHN BAXTER

A home run horse, or a “big horse”, is one who succeeds at the highest level, a life changing horse - a Smarty Jones, a Sunline. Glenye Cain’s book “The Home Run Horse” is an interesting study in the lengths to which people will go and the fabulous sums they will spend to get a home run horse.

“Another Storm Cat son, Tasmanian Tiger, fared even worse. Closely related to a champion filly named Storm Song, he brought $6.8 million at a yearling auction in 1999. Two years later, his owners gave up on him after he had won just a single race in his first few starts. They sold him to Hong Kong, an equine hinterland populated by outcasts from America and Europe. Tasmanian Tiger had made just three starts, and might have come around eventually, but he must have disappointed his owners, Coolmore Stud, very badly in his short time at the races: Despite his sparkling pedigree, they gelded him before putting him on the plane. Alongside Tasmanian Tiger for the flight was another well-bred and expensive disaster from the Coolmore stable, a $5.5 million colt named Diaghilev, who won twice but then tailed off badly and was beaten by 11 lengths in his final start in England.”

It’s a throwaway paragraph, used by Cain to demonstrate the oft made point that spending lots of money on yearlings is no guarantee that they will run fast. Unfortunately for the author, she has made a couple of blunders which demonstrate the oft made point that one really should check one’s facts before going into print with them.

After he went to Hong Kong, Tasmanian Tiger was renamed “The Pioneer” and sank like a stone.

So far, so good.

The other “expensive disaster”, Diaghilev was renamed “River Dancer”, and he just happened to win the 2004 Group 1 Audemars Piguet QEII Cup at Sha Tin. The QEII forms part of the World Series Racing Championship, and any horse who wins a leg of the Championship is a home run horse by any measure.

Oops.

More important though, is the author’s ignorance of Hong Kong’s racing industry, demonstrated by her comment “…Hong Kong, an equine hinterland populated by outcasts from America and Europe”. Cain is the bloodstock business writer for the Daily Racing Form, the American horse racing bible, and she really ought to know better. The Hong Kong Jockey Club is recognised internationally as one of the most progressive racing administrators in the business. Prizemoney in Hong Kong is the envy of just about every other jurisdiction, with the exception of Japan. Hong Kong conducts 2 legs of the World Series Racing Championship, the QEII and the Hong Kong International Cup. The latter run in December, along with three other international races, on the 3rd richest race day on the calendar, behind only the Dubai World Cup and the Breeders Cup. There are lessons the rest of the racing world can learn from Hong Kong. Yet the reader is led to believe that Hong Kong is a racing backwater, a hinterland. Hardly.

And how about “…populated by outcasts from America and Europe”? The author appears to be unaware of HK’s owners’ and trainers’ practice of scouring the yearling sales and racing stables in the UK, Ireland, Europe, Australasia and even South America for promising racing prospects, and paying big money for them. And they are pretty good at it too. Home trained horses won 3 of the 4 big races on Hong Kong International Day in 2003. Outcasts? I don’t think so. Top class turf prospects from all over the globe would be more accurate.

Is it a case of the author giving credence to the popular view (myth?) that Americans don’t really know or care what happens outside their own backyard, or simply carelessness on her part ? More than likely the latter, but I’m not sure the HKJC or the Hong Kong racing public would be impressed whichever it may be.

Just goes to show that you can’t believe everything you read, even when it appears in the best written and most carefully researched works, and “The Home Run Horse” is certainly well written and researched - apart from one little paragraph on page 14!

It's unusual not to see a few more at this time of year but the only "Christmas stocking" suggestion came from Paul Moroney Bloodstock. According to Paul:

"A CHRISTMAS CRACKER! Pull a few friends together and pick this one out of your Xmas stocking…

"Paul’s 2005 Derby contender - a striking colt by ZERPOUR ex RANCHER’S DAUGHTER selected from the recent Karaka Breeze Up sale.

“The best Derby colt I’ve seen in years,” Dr Jim Marks, noted veterinarian.

“One of the best colt’s I’ve ever had through my hands,” former conditioner Richard Otto, trainer of one of this year’s Derby favourites Mandela.

“Truly one of the best moving horses I have ever seen. His sire Zerpour was bred by the Aga Khan and this colt has a striking resemblance to one of the Aga’s best racehorses, the brilliant dual Derby winner Shergar,” Paul Moroney, leading racehorse selector. “This colt will be named ZERGAR!”

"Join Paul’s Derby dream for the 2005-2006 season. 80% available @ $NZ48,000+gst (10% shares $NZ6,000+gst). What an XCELLENT idea!"

A nice looking horse too ...



We trust everyone had a safe and merry Christmas!

The acronym for Magic Millions should in fact be 'EI' ('endlessly innovative) rather than just 'MM'. The dynamic auction company from Queensland are yet again first past the post, this time in association with SireCam. Footage of over 400 Magic Millions yearlings parading on video will be available for viewing and downloading from www.magicmillions.com.au and www.sirecam.com from Christmas Day.

There has been a limited amount of video footage incorporated in the online Premier catalogue in recent years - Coolmore yearlings in 2004 from memory.

This year the net has been cast much wider.

The MM Press Release goes on to state:

"This great marketing tool will enable trainers, syndicators and buyers to simultaneously discuss the physical attributes of yearlings with their clients from anywhere in the world in the lead up to the sale. The video clips will also expose yearlings to a global market with international and interstate buyers now possessing a lot more than a just pedigree page to rely on when selecting horses for potential purchase.

"This is what some leading buyers have said about Sirecam’s online yearling video previews:

Gai Waterhouse – Sydney’s Leading Trainer

'This is a tremendous marketing tool when placing yearlings with clients.'

James Bester – Leading Bloodstock Agent & Marketing Consultant

'I find this a very useful tool from both a buying and marketing point of view. Yearling footage provides the opportunity of reaching buyers – both in Australia and overseas.'

Simon O’Donnell – OTI International – Bloodstock Consultants

'This technology is of enormous benefit when communicating with clients and potential clients.'

Joe O’Neill – Prime Thoroughbreds – Syndicator and Racing Manager for Leading Trainer Bill Mitchell

'When buying yearlings, video previews allow us to virtually transport clients to the Sale via the internet.'"

Magic Millions are certainly making viewing and purchasing horses in a global market place much easier (for vendors and buyers alike).

An innovative development in the BOBS (Breeder Owners Bonus) Scheme was announced yesterday by Peter V'landys, Chief Executive of Racing NSW.

In addition to country non-TAB and Picnic meetings becoming BOBS eligible, from January 1 2005 an owner of a BOBS-eligible horse which wins a race in NSW can either take the cash or 'double up' - that is, take twice the amount of the cash in a voucher which can only be used to buy a BOBS-eligible horse at any yearling sale.

The flow-on effect to the Industry is self-explanatory in terms of longer term support to breeders/vendors but the Scheme also provides commendable alternatives to owners.

The full story can be read on the Racing NSW site. AAP have also picked up the story.

The Nielsen Norman Group have released a major report titled Designing Websites to Maximize Press Relations.

The full 218 page report will set you back US$248. HOWEVER, the (free) Executive Summary contains some handy information including an explanation of journalists information needs, international usability of sites and design guidelines.

The research also includes the top-five reasons journalists gave for visiting a company's website which can be eminently useful if you are analysing whether your website makes such information easily available:

1. Find a PR contact (name and telephone number)
2. Check basic facts about the company (spelling of an executive's name, his/her age, headquarters location, etc.)
3. Discover the company's own spin on events
4. Check financial information
5. Download images to use as illustrations in stories

If you manage a company's PR then the Report may be a purchase well made, not least when you consider the following quote:

"The Web is one of the most important research tools for journalists. When asked how they would get basic information about a company, all the journalists in our study said that they would begin by doing some Web research. About half the journalists started by visiting the target company's website; the other half started by searching an outside service (mainly Google)... This finding emphasizes the necessity for having a clean corporate website with a clearly labeled Press or PR section that can quickly provide answers for journalists. It also emphasizes the need to be well represented in external search services and databases, especially since the trend over time is that more journalists are relying on search engines (mainly Google at the time of this writing).

"Journalists are not gullible, and they do not take a company's own word as truth. On the contrary, they almost all stressed that press releases are useful only to find out how a company is trying to position itself. We strongly recommend that a company's PR area have links to external sources, including press coverage, since articles from independent newspapers and magazines are often considered to be much more credible than the company's own press releases. We have seen similar findings in studies of prospective customers evaluating products on consumer- and business-oriented sites, so links to external press coverage will also help promote sales."

I received the Inglis Easter Sales Preview in yesterday's post and I have to say - it's (as always) a magnificent line-up of horses and the book itself is also very easy on the eye this year.

I did, however, do a double-take at a column in last week's Stallion Daily Bulletin. Graeme Kelly reported (on 15/12):

"CHAMPION’S HALF-SISTER IN EASTER CATALOGUE

A half-sister by the exciting sire Encosta de Lago to World Sprint Champion Silent Witness will be catalogued for the 2005 William Inglis & Son Australian Easter Yearling Sale in Sydney.

“ We will put a reasonable reserve on her,” says the filly’s breeder Ian Smith, of Edinburgh Park Stud at Taree.

“ But everyone knows I put my horses up for sale, so she will be there to be bought.”

According to the sales company’s executive director, auctions Jonathan D’Arcy a price of $1 million would not be “unreasonable”."

Whilst Jonathan may be enjoying the prospect of the commission on a 7-figure sales price I have to say I did look twice at the amount. No, I'm not a bloodstock assessor but the figure did seem extraordinarily high for the pedigree. Silent Witness may be champion world sprinter but a 'freak' horse does not usually cast the same talent on other members of the family (dare I use Songline the dam of Sunline as a case in point). The only other two foals under the first dam who have raced have only placed and whilst the hype continues around Encosta de Lago and the auction houses are desperate for an heir apparent now that the Danehill and Sunday Silence days are behind us ... a million dollars?

For Edinburgh Park's sake I certainly hope the filly sells well (especially considering the Jade Tiara yearling that was scheduled to be sold last year had to be withdrawn after a paddock accident; a major blow to a small stud) but I think we all need to remain commercially realistic in spite of all the hype.

An update to yesterday's post - catalogue pedigrees have now been added to the Collingrove site. The Stud was apparently waiting for clearance from Magic Millions re the correct URL. You'll find the pedigrees on the right hand side of each page when you view each yearling's profile.

Seen the Collingrove website lately? It's well worth a look. Jenny McAlpine is possibly one of the best Stud Farm marketers you'll come across and the approach the Farm has taken to online promotion of its yearlings is a cut above many of its competitors.

There are the 'usual' online features on the site - photographs, pedigrees, sale and contact details etc. Where the promotion gets interesting is in the way the pedigrees are laid out. The catalogue pedigree steps away from the usual AAP version you'll be familiar with and instead incorporates a wide variety of new detail including (for the pedigree enthusiasts) inbreeding and line breeding information. Personally I would prefer to also see the catalogue pedigree underneath the new style to make it easier for clients who want to also see the verbal explanation in diagramatic form (as research shows that a number of people absorb information more easily in that format)- but the novelty of the approach in terms of additional detail (and the ability to move the pedigree into the realm of 'promotion') is excellent.

In terms of additional exposure all lots (photographed) are listed on the Magic Millions site and also on the Cyberhorse site. On the latter site they appear as a Featured Horse banner ad which clicks through to the relevant write up for that horse. It's a novel and savvy approach to web advertising. For not that much money.

Let's see who follows ...

The Darley approach shows how the large stud farms (with requisite staff numbers to allow greater client support) are putting pressure on local properties to match their standards.

Riverdene Stud have taken an alternative approach. Given their staffing numbers their approach is no doubt eminently sensible but in today's business environment it is not a marketing tact that I would encourage a farm to adopt.

In September the Stud's homepage listed the following message: "September is one of the more crucial months of the year for a fully functioning thoroughbred stud and we ask for your full co-operation regarding our first discussion point of this month...

We would like to take this opportunity to remind our valued clients that visits to the stud can only be made by appointment at this time of the year when it's very much a case of 'all hands on deck'.

With Riverdene Stud now home to seven busy stallions, our staff must adhere to a very strict schedule if we are all to achieve our mutual goal... a healthy new crop of youngsters on the ground and broodmares successfully put back in foal.

For the record, our preferred days for visiting are Monday, Wednesday and Friday. All other days of the week provide us with some considerable complications and clients cannot expect to receive the high standard of service they have come to know from the normally accommodating Riverdene Stud team."

As I said - their hardline approach no doubt makes sense - but it also fails to take into consideration who pays the bills ...

Received in the mail last week a pedigree book from Darley and also a very interesting flyer offering clients a personal stallion parade ... at any of the Darley studs around the world. It's an interesting example of a Stud Farm aiming for the personal touch with clients (particularly given the number of clients they are managing).

The first ever code of ethics for the US Thoroughbred auction industry was introduced yesterday (Dec. 16) at a press conference at Keeneland.

The Code includes the following provisions:

- Veterinary procedures deemed to "improve the conformation of horses and thus enhance their opportunity to remain sound" are acceptable but must be disclosed. This includes invasive joint surgeries and other surgeries "designed to affect permanent" conformation changes, such as transphyeal bridges and periosteal transsections, manipulations, and elevations.

- Veterinary practices prohibited and deemed unacceptable are "temporary alterations" which may mask a horse's conformation, such as shock wave therapy and acupuncture and/or electro-stimulation with the intent to alter laryngeal function. These practices are not permissible "after a horse has arrived at the sale grounds."

- The injection of an internal blister or any other means of temporarily altering conformation is "prohibited any time, regardless of the animal's location, within 90 days of sale." If proof is provided within 14 days of a sale that such a practice has happened, the code considers it "to be just cause for the buyer to turn back the horse and expect reimbursement of the sale price."

- The code mentions that an appended form will be provided by sale companies to consignors to provide information on performed procedures on sale horses, and consignors are "asked" to include the information in repositories. The form is voluntary for foals of 2004 but will be mandatory for foals of 2005 and later.

- The code asks veterinarians to sign a dual agency agreement that reads: "I agree to fully disclose my ownership in any horse that I am asked to examine or render an opinion on, to the client or his agent for whom I am employed."

- The "supplying of ownership information is not held to be a requirement." Thus who owns or buys a horse will remain as clouded as it has been in the past. It does require disclosure of ownership interest in a horse held by a sale company official. A change of ownership in a horse once it reaches the sale grounds "must" be announced from the auction stand. However, this is only if the sale company is informed of the ownership change.

- The code suggests a written agreement be made between an agent and buyer, but does not require such a document. On the subject of dual agency, the code states: "dual agency (without disclosure to all parties) is inherently fraudulent. No agent/trainer should ask for a commission from a consignor, nor should a consignor pay a commission." However, like the entire code, there is no penalty for not adhering to the dual agency question.

Details from article written by Dan Liebman and Deirdre B. Biles The Bloodhorse.com

For a full text of the Code click here

Athlone & Associates are currently completing a major research article on this subject. We expect to publish it in the next few weeks.

It's also worth noting that the New Zealand Bloodstock Ready-To-Run Sale at Karaka on November 16-17 of this year offered buyers a new service to enhance buyer confidence: a dual blood testing system to verify that nothing has been administered to any Lot (all horses had blood taken from them immediately after they breezed-up & buyers had the option of requesting a further blood sample to be taken at the fall of the hammer)

The blood sampling was in addition to a voluntary pre-sale x-ray repository

It's reassuring to see auction houses introduce such initiatives BEFORE a Code of Conduct is applied (as one suspects it will be).

From today's Bloodhorse.com News Update

Sales Integrity Task Force to Release Results Thursday by Deirdre B. Biles

"The Sales Integrity Task Force will release the results of its work during a press conference Thursday at 11 a.m. (EST) at Keeneland in Lexington, Ky. According to the task force's chairman, Cot Campbell, "six or seven" people, including himself will be involved in the presentation of an auction Code of Ethics.

"Campbell said previously that "significant steps have been taken" by the task force to ensure that sale participants are treated fairly. The Code of Ethics is expected to address such issues as dual agency and disclosure of veterinary treatment of auction horses."

I have previously commented on this issue - see the following link in our acrchives section (from September 29, 2004).

And don't think it's just Satish Sanan and various organisations trying to protect us. Don Engel has written an interesting article titled "How to Protect Yourself From Crooks" which appears on the Thoroughbred Information Agency site. The article commences with the (rather worrying) question: Are there more thieves per capita in the horse business than elsewhere? The author posts an equally concerning answer: "Probably not, but there are still enough to meet the demand".

In terms of reform 'Down Under':

From Breeding and Racing Daily News on 5 November 2004

NZTR Considers Code Of Practice

"NZ Thoroughbred Racing “is to consider the establishment of a Code Of Practice governing the buying & selling of thoroughbreds in New Zealand, in line with the UK’s Bloodstock Industry Code of Practice”. New Zealand “intends to work closely with other countries on this issue & particularly Australia”. The UK BICP sets out principles applying to all sales of bloodstock & sales of stallion shares & nominations (whether private sales or sales at public auction) “to ensure a high standard of integrity & transparency to safeguard vendors, consignors, agents, owners, trainers & sales companies”. NZTR noted the US “is also in consultation on the same issue under a grouping of industry stakeholders titled The Alliance For Industry Reform”."

From AAP Racing and Sports on 29 September 2004.

Plans For Bloodstock Code Of Practice by Chris Scholtz

"The Australian bloodstock industry will come under close scrutiny from the Australian Racing Board with a view to establishing a code of practice for auction companies and bloodstock agents.

"The ARB has appointed a panel to engage in consultation with the major auction houses, the Bloodstock Agents Association, owners, breeders and trainers on industry standards for bloodstock transactions.

"The move follows a similar review in the UK that was instigated by newspaper investigations into malpractice by agents and trainers.

"The UK review resulted in the Jockey Club publishing a "Bloodstock Code of Practice: which applies to all sales of bloodstock conducted privately and at public auctions.

"The sale of stallion shares and nominations are also covered by the UK code.

"The brief given to the Australian Racing Board panel is to examine the merits of adopting a similar code in Australia, as well as investigating other means of promoting confidence in Australian bloodstock sales.

"Racing NSW CEO Peter V'Landys has been appointed chairman of the review panel.

"He has invited interested parties to make submissions and suggestions on the approach that should be taken by Australian authorities.

"Submissions will be taken until October 20."

The Australian Racing Board has yet to release an interim report on the review.

Meanwhile, if you have an interest in this topic you may wish to have a look at the interesting debate about setting reserves on the Thoroughbred Village Forum (title of the thread is: Sales Reserves)

Whilst online advertising may be growing the fact remains that a large proportion of existing advertising budgets will focus on more traditional media such as newspapers/magazines. In light of this I have put together a few tips to ensure that your ad has every chance of success:

1. Your headline has to contain a benefit to the reader. Why would they read on if they don't understand what it is that you are offering them - and why they need it?

2. A picture tells a thousand words. People will always look at pictures first, then read any words so if possible you should include a photo - and one that's appealing to the eye. Darley have become very well known for their very artistic shots (an approach that Magic Millions have also adopted for their 2005 yearling catalogue).

3. Branding is very important. The same look/feel plus the inclusion of your tag line and your logo are important as it allows people to recognize the ad is from you without actually having to read anything. It's the 'reminder' value that's so important. Some companies also choose a particular section of a magazine to advertise in eg. Woodlands often takes the back cover of a magazine; Coolmore/Darley often the first few pages; some smaller companies choose the same column in the listings; others always ask to be alongside a certain section of a magazine/newspaper (targeting)... it all just acts as a subtle reminder in the reader's mind.

4. Highlighting your ad is important. It's not as if yours is the only ad that will appear in the magazine. You should therefore consider including a border around your ad, an icon or bold text to make your ad stand out.

5. It can be good to include a time limit to make people act on any offer you're making rather than allow them to be persuaded by someone else's offer. Alternatively give them a reason to log on to your website or visit your office etc. What you want to achieve is the person actually doing something as a result of reading the ad.

This is a 'must read' article if you oversee the design of your company's online advertising campaign.

The Nielson article reports on recent research that shows that around 95 percent of web users react negatively to pop-up advertisements and that not only is blocking software becoming more common but users are increasingly transfering their dislike of such ads to the advertiser -"of 18,808 users surveyed, over half said a pop-up ad made them regard the advertiser very negatively while nearly 40 percent reported that it affected their opinion of the website very negatively".

The article provides essential know-how on what NOT to do in an online sales environment.

The research was also discussed in an article titled "Most web users hate pop-up ads: Nielsen" in the Sydney Morning Herald on December 7.

An article that appears in the Opinion Section of the BLOODHORSE on 1 December 2004 is well worth a read in terms of its thoughts on use of a PR agency to promote the sport of racing:

"Let's Move On" By Victor Zast

"Why has Thoroughbred racing decided to put its future into the hands of a public relations agency?

"Is it because the available funds for running an effective ad campaign haven't materialized? Could it be that the people who control the purse strings are beginning to comprehend the positive effects of Seabiscuit and Funny Cide and Smarty Jones? Are the critics of this change in marketing direction right when they warn that Thoroughbred racing no longer appeals to the subscribers of newspapers and magazines, and that with each passing day, there are fewer writers devoted to the coverage of the sport? ..."

[click on link above to read full article]

First it was the TAB. Now it's Betfair receiving a censure.

And all because of advertising.

The claims against the TAB Ltd and Betfair ads have run the gauntlet of defamation, innuendo, 'misquoting', and finally - misleading and deceptive conduct. Given the threat of legal proceedings and official reprimands one can only wonder what in-house counsel signed off on the campaigns and what ground the companies thought they are making (except in terms of media comment) by so flagrantly challenging advertising standards (and trade practices law).

If this is war (and it certainly seems to have assumed the guise) then the TAB and Betfair ads have been somewhat less than an outright success in terms of 'fair advertising'.

But let's look at how the ad game has played out so far:

On April 21 2004, Darren Beadman threatened legal action over a controversial ad which appeared nationwide in the Australian Financial Review and the Australian two days after the shock defeat of Lonhro in the Queen Elizabeth Stakes. The advertisement said: "Will Darren Beadman jump off Lonhro?" Then underneath appeared the words: "Ask for a price with internet betting exchanges. TAB calls on Australia to ban betting exchanges."

The advertisement drew a comparison to the scandal in England when a jockey allegedly jumped off a horse (who was a firm favourite) and that had allegedly been backed to lose with betting exchanges.

The TAB's response to the ads content was somewhat baffling: "It's not about casting aspersions ...There is no innuendo. It doesn't suggest anything at all in terms of Darren doing anything (untoward) with Lonhro or any other horse."

Betfair's response was, I would suggest, perhaps closer to the mark on this occasion: "[The advertisement] was as inaccurate as it is offensive. It suggests that betting Lonhro to lose would only have been possible with an exchange".

The story didn't end there. There was another TAB Ltd ad about cricket results being corrupted, then another that was said to "deceive" the public through a "mischaracterisation" of the views of problem gambling campaigner Reverend Chester Carter (who is on record as being equally opposed to the TAB's own Internet operation as he is to other forms of internet wagering), and then, in a bizarre twist, the Prime Minister was "misquoted" in yet another TAB ad which seemed to suggest the Federal Government was directly opposed to betting exchanges. Betfair's response (not surprisingly) was: "[the ad in question] seriously manipulates and distorts the PM's words to suit the TAB argument to ban betting exchanges."

The TAB ads played to advertising's traditional (albeit at times dangerous) role of manipulating public perception. TAB Ltd went as close as possible to the line before falling on the knives of legal action and in doing so achieved their objectives of pushing the topic of betting exchanges to the top of the pile on radio talk-back shows, headline news in every newspaper, copious amounts of chat room debate, planting the seeds of doubt in the general public's mind (forgetting for one moment that the company behind the ads is also 100% about "the evils" of gambling.)

At this point Betfair had absorbed a few blows (and no doubt Mark Davies was wondering what exactly the benefits were of being communications manager for the company) but as most businesses would know - the best way to deal with such negative PR in a war of this nature is to ensure information continues to flow to all stake holders in a timely and open manner and ensure that every action that's taken is above board (and transparently so) as the public and the media have an unhealthy obsession with dragging a company's name through the mud once concerns have been raised, particularly when a company is not Australian-owned and deals in a product/service that ignites such passionate public debate due to its wider social implications.

So what happened next? On 1 December 2004 in a judgment published in the UK, Betfair was censured by the Advertising Standards Authority for three complaints of misleading advertising on the BBC's The Money Programme by bookmaker Geoff Banks. According to the Racing Post the complaint "related to a national press advertisement (which itself used evidence put forward on BBC's The Money Programme) claiming a £2 punter betting on Betfair 10 minutes before the start of each race at Goodwood on May 18 would have collected £334 from the winners, compared with £187 at starting price". In its judgment, the ASA noted The Money Programme was the source of the comparisons, but held Betfair "responsible for the wording of the advertisement".

It was, in retrospect, as much a third party error as Betfair's but in the way it has been reported it was one the betting exchange could ill afford to make. It may not be considered 'an equal playing field' by some but a large percentage of people have a vested interest in ensuring that Betfair do not succeed.

In terms of comparison the TAB Ltd series of ads were an abysmal example of 'fair advertising'. Yet one expects that in spite of this they themselves will made suitable noise about the UK judgment as it relates to Betfair; a weary observer could perhaps say that it is just another trading of blows in this entrenched battle where an announcement of an early victory seems unlikely.

Given the way the media have been reporting on the matter (and some of the race clubs) it might be useful to quote Lord Falconer of Thoroton (Secretary of State for Constitutional Affairs and Lord Chancellor) who spoke at the Law for Journalists Conference in London on 26 November 2004 . Speaking about freedom of information he said:

"The benefits of open government are clear: transparency, accountability, honesty. That's the kind of government which people want to see ... Openness and transparency lead to better decision-making. Greater accountability will improve standards. As journalists you have a clear part to play here. You are the prism through which the public will often look at open government.

"The media in all its forms - television, radio, advertising, newspapers, the internet - now penetrates all our lives every day in a way that would have been impossible thirty years or more ago.

"With that increased influence comes an increased responsibility. Freedom of information can mean that the relationship between the government and the people, and between the media and the people, can be different. Can be better. Can be more open. More transparent. More honest.

"Those are objectives worth striving for.

"And we both have a job to do.

"We as politicians in government. You as journalists in the media.

"Not for the benefit of government. Not even for the benefit of the media. But for the benefit of the public."

His words are as applicable to advertising/marketing as they are to journalism. We sometimes forget who the recipient/reader of media/ads are: the general public. It's those people we should be looking after. Deliberate mis-statement in the media and in advertising for political (and commercial) gain (which the TAB Ltd vs. Betfair debate is all about - make no mistake about that) helps the public not one iota.

What differentiates a horse sale? Lots of things really - quality of horses, quality of buyers, time of year, type of sale ... the list goes on. A number of sales have become brand names in their own right: think Keeneland's September yearling sale (all 14 or so days of it), Keeneland's November breeding sale, Inglis' Easter sale (and also their broodmare sale), Magic Millions' January yearling sales, the Japan foal sale ... and then there's the Hong Kong International sale.

What makes the HK sale special? Well it happens but once a year, it's so select that if you dozed off you'd miss it - just 20 horses go under the hammer, and the fairer sex don't get a look-in - the two year olds on offer are all colts/geldings. The horses are purchased from a multitude of other countries (6 in total) and buying at this sale is as much about 'face' (a unique Chinese concept) as it is about owning a race horse. In years gone past the sale was strictly invitation only and a black-tie affair. This year sees it shift to the new Parade Ring at Shatin which I imagine will ensure the 'black tie' piece of the equation is lost.

If you wish to peruse the catalogue you can do so by clicking on the following link.

Breeze-ups can be viewed as well

Speaking of Hong Kong, only 5 days until the Internationals. The following specialist site has all the latest news and photographs.

Spotted in this morning's Breeding & Racing Daily News (citing the UK Racing Post)

"Irish Turf Club senior steward Pierce Molony 'lambasted Ireland’s breeding industry for not taking steps to solve the over-production problem' at the prestigious Moyglare Dinner, reported racingpost.co.uk. Molony declared: “Despite the buoyancy, there is a major problem facing our industry & that relates to the over-production of foals. If something is not done soon by breeders to address the problem, the consequences could be very serious. Surely recent bloodstock sales results must have made breeders aware that many of them are engaged in commercial suicide? More seriously, however, their actions are having catastrophic consequences on the very sport of racing, without which they would not have an industry. I believe breeders must take mares out of circulation & I also believe stallion owners can help by reducing the number of mares that he or she will allow their stallions to cover & by being selective over the mares actually covered.”

I'm looking forward to what response (if any) comes from Australia given the push this year to breed MORE mares.

In their latest newsletter (ISSUE 21, November 2004) TrendWatching.com reports on the ‘Customer Made Revolution’. They state:

“Marketing has finally become a conversation. Not, in most cases, as was intended, BETWEEN corporations and consumers (that would make too much sense), but rather a global conversation involving millions of consumers ABOUT corporations. On sites like Planetfeedback.com, thecomplaintstation.com, Epinions, About.com, on hundreds of thousands of blogs, community sites, forums, viral emails, bulletin boards, and what have you, consumers relentlessly exchange views, complaints, opinions and comments about products and services, about brands, about companies, about YOUR company.

"Why now? Because they finally can. For decades, consumers have been saving up their insights and rants about the stuff they consume, simply because there were no adequate means to interact with companies, or with other consumers for that matter. No longer. These fickle, wired, empowered, informed, opinionated and experienced holders of a MC (Master in Consumerism) are getting used to 'having it their way', in ANY way imaginable, which includes wanting to have a direct influence on what companies develop and produce for them.

"It certainly helps that these same consumers are also part of GENERATION C: they're creative and increasingly have access to professional hardware, software, and online distribution channels to show (and dictate) companies what it is they expect from them, using text, sound, picture and video in ever more powerful ways.

"Some companies ARE now engaging creative customers in new ways … These companies are clearly aware that tapping into the collective intellectual capital of their customers yields great creative and 'real' content. However, let's not make the mistake to think that in the end these conversations will all be about communications and branding: how about extending this cooperation with consumers to virtually everything a corporation does, by making the customer an integral part of ALL creative and creational processes?”

It’s an interesting read not least because of the opportunities businesses have to involve clients in their business. You will see this to some extent with websites that include chat rooms/discussions threads. These forums certainly encourage participation and new content (and for many a journalist quite a few leads!). The down side is that increasingly such chat rooms are coming under the scrutiny of legal restrictions. Recent case law suggests that the test of whether a statement is defamatory is determined by the country where it is downloaded not where it is drafted … so all those people who adhere to free speech ideals may potentially find themselves in hot water if the person they are attacking is in a country that supports much stricter standards.

The Australian Stud Book has adopted a more interactive approach to client relations by encouraging people to contribute foal photos to the monthly newsletter. It’s certainly one approach to ‘engaging’ customers.

I think thoroughbred businesses have the potential to go a lot further however. One idea is as simple as a horse stud having a section of its site devoted to interaction with its clients (this includes potential as well as current clients). One suggestion would be to ask people to submit photos they had taken (camera or mobile phone) of any of the horses the stud had raised/bred that the person had spotted at a race track anywhere in the world. Of course you wouldn’t choose every photo (but you could post them all and get the community to vote for their favorite 5 each day and just post those ones). It would be inviting interaction and developing a community of participation.

Equally, a stud/business could invite clients to give feedback on initiatives. Rather than just say “thank you for the suggestions” they would be wise to then get the community to vote on the best ideas and ask people how the ideas might best be implemented. Most horse studs don’t have the time or staff to take a list of 150 suggestions and then work out how to implement them … why not use the knowledge of those that do have the time (and the desire to produce some interesting content for you) and see what comes out of it. One reason to adopt this approach is to move beyond a rather tired public who continually hear “please tell us how to change”, who then go to the trouble of making a suggestion (or three) ... but never hearing another word.

Yes, it is giving up a small measure of control. But it is involving people at a far more intelligent level than previously and I would suggest that it is the way businesses will be forced to move in the future if they wish to maintain strong customer loyalty and increased brand awareness.

On 13 November I posted an entry titled Broodmare Diamonds. The subject of that post, Ipi Tombe, made headlines on Day 2 of the UK Tatts Mares Sale this week when she sold for 850,000 guineas (AUD$2.21m) to the bid of agent James Delahooke (buying for an unnamed US client).

From a marketing perspective (in terms of choosing the right market for your horse - which will often impact on country let alone State or auction company these days) it was interesting to note the words of Team Valor's Barry Irwin who said "The more we thought about it, the more we thought Tattersalls was the right place to sell. We felt people here would appreciate more what she achieved. There were a lot of Europeans in Dubai when she won & they are probably more in tune with what she has done than the Americans."

Jockeys are an increasingly 'marketable' commodity, a fact ably demonstrated by the debate over jockey sponsorship earlier this year.

Another event which slots under the 'marketing' heading is the 18th World Super Jockey Series in Japan this weekend. Glen Boss will represent Australia, Opie Bosson will represent New Zealand & Douglas Whyte Hong Kong. Representing Japan will be Yutake Take, Katsumi Ando, Shinji Fujita, Yoshitomi Shibata, Norihiro Yokoyama & Hiroyuki Uchida.

It got me thinking about specialist websites that cater to information about riders. A quick search revealed quite a few:

New Zealand jockeys



JockeysRoom.com



JockeySite (in English and Spanish)