Archives for August 2021

DETROIT (AP) — Rick Hendrick erased any doubt that marketing in motorsports is still effective when his automotive sales group bought the sponsorship rights through 2023 for NASCAR title contender Kyle Larson.

With few companies willing to back Larson upon his return from a nearly yearlong suspension for using a racial slur, Hendrick put the website for his dealerships on the hood of Larson’s car. Larson started winning races, which company officials say drove traffic to HendrickCars.com that netted $1.8 million in leads and over $5 million in television exposure.

“We’re having the best year we’ve ever had,” said Hendrick, owner of the largest privately held dealership in the country. “The market is blazing.”

When motorsports began to gain mainstream traction in the 1980s, the motto for auto dealers was always “Win on Sunday, sell on Monday.” But the economic downturn of 2008 nearly devastated the automotive market and NASCAR’s soaring popularity started to level out. The marketing slogan was suddenly watered down to something closer to like, “Win on Sunday, hope a customer comes in on Monday.”

Even so, manufacturers have not moved away from motorsports as a top sales platform. It’s never been more evident than this year as spending has resumed after the pandemic crushed 2020 sales. Motorsports remains a critical marketing tool for companies to show how racing technology transfers from the track to the streets.

General Motors launched a special edition Corvette during a race weekend in the shadows of its Detroit headquarters. Lexus, Ferrari and Acura did the same for their new performance vehicles at IMSA sports car events. At a NASCAR race in Nashville, Ford used its fully electric Mach-E to pace the field and used its high-performance GT model to thrill VIPs for a few laps around the track.

The Mercedes-AMG GT Black Series was unveiled in June at the Concours Club in Miami. Although the sticker price is an eye-popping $326,000, the car ranks in the top group of street-legal sports cars. Its crossover appeal was emphasized when it debuted alongside its sibling Mercedes-AMG GT3 racing car that went 1-2 in class in this year’s Rolex 24 At Daytona endurance race.

“We know from our customers no matter what age they are, even if they’re in the digital world of racing, which is very, very good, that racing is a proof-point of engineering capability, validation of the car itself, and of safety in many cases,” said Mark Reuss, president of General Motors. “The two-way technical things that we do in all of our race programs eventually show up in our production cars.

“The customer cares about that and motorsports is extremely exciting to watch and to participate in, so it is a natural marketing space,” he said.

IHS Markit automotive analyst Stephanie Brinley said automakers get multiple benefits from their racing programs, from torture-testing new technology to a mostly unmeasurable impact on brand perception.

People like to see competition and cheer for their brands, she said, and that translates to loyalty when it comes time to buy a new vehicle. That applies not only to racing fans who love the competition, but also to people who don’t follow the sport.

“It gives owners a reason to cheer on their brand. It helps build an emotional connection,” Brinley said. “That’s really elusive, but it’s also pretty key toward keeping and maintaining brand loyalty.”

Automakers can use the race track to push new technology in ways they can’t reproduce on their own test tracks, Brinley said. While there might not be a direct connection to consumer vehicles, the testing influences vehicles sold to the public.

“It’s an opportunity to put the vehicles in challenging positions that aren’t necessarily 100% under their control versus a regular test track situation,” Brinley said.

Ford Motor Co. points to the 1901 car “Sweepstakes” built by Henry Ford and Oliver Barthel as a race car to help restore Ford’s reputation after his first failed attempt at owning an auto company. Sweepstakes won its first outing against an established driver and car, and the publicity helped Ford launch what is now the fourth-largest automobile company in the world.

For Henry Ford, the win on Sunday slogan had a more significant shift in that it meant he could start a new company on Monday.

“You saw what Henry Ford used Sweepstakes for — for marketing and notoriety and innovation and technical learning and he formed a successful business from it,” said Mark Rushbrook, global director at Ford and head of Ford Performance Motorsports. “The core of that still holds through time from that point to where we are today for the same reasons and effectively.”

There’s still an important competitive element, as noted by David Salters, who last October was named president of Honda Performance Development.

HPD leads all Honda and Acura high-performance racing programs in North America, and Salter pointed to the IndyCar race at Mid-Ohio in July when Josef Newgarden in a Chevrolet edged Colton Herta in a Honda for the pole by 0.0031 seconds.

“You can find out where you are as a company, every qualifying session and at the end of every race,” Salter said. “Between two human beings, two different powertrains, between people setting up chassis in different ways, and somehow one got it quicker in the blink of an eye.

“We begin to sweat when that happens. We go back and look at the data and try to analyze where the differences are, and then we bring that into our business.”

Nearly every series awards a manufacturer championship at the end of each season — it’s called a constructors title in Formula One — and it is a vital tool for automakers.

Edsel Ford II, great-grandson of Henry Ford, still believes that beating the competition is the best way to sell cars.

“I’m old school so I guess I still believe that if you win on Sunday, then you do the best you can to sell on Monday,” Ford told AP. “Winning is so important to us and we do the best job we can in marketing our victories to our customers, to our fans, and we hope that they will come in on a Monday and buy a Ford.”

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AP Auto Writer Tom Krisher in Detroit contributed to this report.

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More AP auto racing: https://apnews.com/hub/auto-racing and https://twitter.com/AP_Sports

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WASHINGTON (AP) — What does Bitcoin have to do with roads and bridges?

A lot right now in the U.S. Congress. One way lawmakers propose to pay for the $1 trillion infrastructure bill the Senate approved Tuesday is by imposing tax-reporting requirements for cryptocurrency brokers, the way stockbrokers report their customers’ sales to the IRS. It could open the way for tighter regulation of cryptocurrency — something the Biden administration is moving toward as it also pushes for tax compliance.

The plan could raise about $28 billion in revenue over 10 years, congressional accountants estimate.

The $28 billion could get stretched very quickly. Take bridges, for example. It would cost an estimated $25.6 billion to replace all the bridges in the country that are classified as structurally deficient, according to the Federal Highway Administration.

So, currency you can’t hold in your hand would effectively pay for roads, bridges, water systems, internet broadband access and shoring up the electrical grid, what President Joe Biden called “a generational investment” on par with building the transcontinental railroad in the 1800s or the Interstate highway system in the ’50s. That’s testament to the explosive growth of cryptocurrencies in recent years — an enticing potential revenue source — and the mounting push by some government officials to put new reins around a largely unregulated market.

After weeks of wrangling, the Senate passed the bipartisan infrastructure package in a 69-30 vote. It now moves to the House.

A look at the situation:

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WHAT’S THE STORY WITH CRYPTOCURRENCY?

The market for cryptocurrencies has ballooned to an estimated $1.8 trillion. They’re basically lines of computer code that are digitally signed each time they travel from one holder to the next. Not tied to banks or governments, they allow users to spend or receive money anonymously. That appeals to libertarians, off-the-grid types and risk-taking millennials who believe the financial system is rigged.

But it’s also favored by international criminals, money launderers, drug dealers and ransomware hackers.

The most widely traded cryptocurrency is Bitcoin, now worth around $45,000 each, down from a high in April of about $64,800. It’s notoriously volatile, in some instances spiking or plunging on public pronouncements by Elon Musk, the provocative Tesla Inc. CEO. Some businesses now accept Bitcoin as payment. Other well-known cryptocurrencies include Ethereum, Dogecoin, Ripple and Litecoin. All told, there are thousands. Bitcoin and others can be bought and sold on exchanges with U.S. dollars and other national currencies.

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WHERE DO GOVERNMENT OFFICIALS STAND?

On both sides of the coin.

Some lawmakers see cryptocurrency as a font of technological innovation, especially in the development of blockchain, the digital ledger that records transactions.

Top U.S. regulators, on the other hand, are flashing danger signs. Gary Gensler, the chairman of the Securities and Exchange Commission appointed by Biden, said last week that investors need more protection in the cryptocurrency market, which he called “rife with fraud, scams and abuse” and “like the Wild West.” While the SEC has won dozens of cases against crypto fraudsters, Gensler said the agency needs more authority from Congress — and more funding — to regulate the market.

The Federal Reserve, meanwhile, is considering developing its own digital currency pegged to the U.S. dollar. A so-called digital dollar could enable faster payments among banks, consumers and businesses.

“You’ve got federal agencies not talking on the same page,” says Suzanne Lynch, a professor at Utica College who focuses on financial crime. “It’s so grey right now.”

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WHAT’S THE CONNECTION WITH THE INFRASTRUCTURE BILL?

The debate over cryptocurrency landed in the middle of the Senate’s work on the massive infrastructure package. An earlier plan to pay for the legislation, by bolstering IRS enforcement to crack down on tax cheating by individuals and businesses, went down as Republicans objected to expanding the agency’s reach. That would have brought in an estimated $100 billion over 10 years.

Going back to the drawing board on revenue raisers, the plan was hatched for stricter tax-reporting requirements for cryptocurrency brokers. The estimated $28 billion it would generate over a decade is only about a quarter of what the IRS crackdown proposal envisaged. But it’s still the biggest revenue raiser of several in the infrastructure bill.

It raised objections from some senators and unleashed an opposition lobbying blitz from the cryptocurrency industry as well as internet freedom advocacy groups.

The provision defines brokers too broadly, opponents say, potentially stifling innovation by unfairly putting new tax-reporting obligations on software developers and crypto “miners” — users who create coins by lending computing power to verify other users’ transactions and receive coins in exchange. Those people don’t have access to cryptocurrency users’ data the IRS would be collecting, opponents say.

Opponents brought forward amendments to the provision and a compromise emerged. But it failed to muster Senate approval, pushing the debate over cryptocurrency, taxes and brokers to the House.

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WHAT’S THE SITUATION NOW WITH CRYPTOCURRENCY AND TAXES?

Some cryptocurrency brokers already report transactions to the IRS, though most don’t, experts say. Brokers place buy and sell orders for users on the cryptocurrency exchanges.

The exchanges are required to collect personal identifying information from users and report their annual activity to the IRS.

The IRS defines cryptocurrency as “property” similar to stocks or gold. That means you pay capital gains tax when you sell it or cash it in at a profit.

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Follow Marcy Gordon at https://twitter.com/mgordonap

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PROVIDENCE, R.I. (AP) — Facebook said Tuesday that it has removed hundreds of accounts linked to a mysterious advertising agency operating out of Russia that sought to pay social media influencers to smear COVID-19 vaccines made by Pfizer and AstraZeneca.

A network of 65 Facebook accounts and 243 Instagram accounts was traced back to Fazze, an advertising and marketing firm working in Russia on behalf of an unknown client.

The network used fake accounts to spread misleading claims that disparaged the safety of the Pfizer and AstraZeneca vaccines. One claimed AstraZeneca’s shot would turn a person into a chimpanzee. The fake accounts targeted audiences in India, Latin America and, to a lesser extent, the U.S., using several social media platforms including Facebook and Instagram.

Russia has been actively marketing its COVID-19 vaccine, Sputnik V, abroad in what some analysts see as an effort to score geopolitical points. But Facebook representatives did not speculate on the possible motivation behind the smear campaign.

The Fazze network also contacted social media influencers in several countries with offers to pay them for reposting the misleading content. That ploy backfired when influencers in Germany and France exposed the network’s offer.

Along with removing the network’s accounts, Facebook also banned Fazze from its platforms. Messages seeking comment from the company were not immediately returned on Tuesday.

Fazze’s effort did not get much traction online, with some posts failing to get even a single response. But, while the campaign may have fizzled, it’s noteworthy because of its effort to enlist social media influencers, according to Nathaniel Gleicher, Facebook’s head of security policy.

“Although it was sloppy and didn’t have very good reach, it was an elaborate setup,” Gleicher said on a conference call announcing Tuesday’s actions.

As social media companies have improved their ability to spot and remove fake accounts, disinformation campaigns have had to adjust. Paying social media influencers to repost their content provides the potential of exposure to the influencer’s audience, but there’s the risk that social media influencers will refuse or, as happened in this case, call them out.

Facebook investigators say some influencers did post the material, but later deleted it when stories about Fazze’s work began to emerge.

French YouTuber Léo Grasset was among those contacted by Fazze. He told The Associated Press in May that he was asked to post a 45- to 60-second video on Instagram, TikTok or YouTube criticizing the mortality rate of the Pfizer vaccine.

When Grasset asked Fazze to identify their client, the firm declined. Grasset refused the offer and went public with his concerns.

The offer from Fazze urged influencers not to mention that they were being paid, and also suggested they criticize the media’s reporting on vaccines.

“Too many red flags,” Grasset told the AP. “I decided not to do it.”

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This story has corrected information supplied by Facebook that Fazze was based in the U.K. Fazze’s parent company is, but Fazze’s corporate residency is unknown.

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Stocks ended another jagged day mostly higher on Wall Street Tuesday as gains in banks and elsewhere in the market outweigh a slide in technology companies.

The S&P 500 index and the Dow Jones Industrial Average rose slightly, wile the the Nasdaq slipped. Crude oil rose after slumping the day before.

Food distributor Sysco surged after reporting results that were much better than analysts were expecting. Kansas City Southern jumped after Canadian Pacific raised its offer for the railroad operator, reigniting a bidding war with Canadian National.

On Tuesday:

The S&P 500 rose 4.40 points, or 0.1%, to 4,436.75.

The Dow Jones Industrial Average rose 162.82 points, or 0.5%, to 35,264.67.

The Nasdaq fell 72.09 points, or 0.5%, to 14,788.09.

The Russell 2000 index of smaller companies rose 4.55 points, or 0.2%, to 2,239.36.

For the week:

The S&P 500 is up 0.23 points, or less than 0.1%.

The Dow is up 56.16 points, or 0.2%.

The Nasdaq is down 47.67 points, or 0.3%.

The Russell 2000 is down 8.40 points, or 0.4%.

For the year:

The S&P 500 is up 680.68 points, or 18.1%.

The Dow is up 4,658.19 points, or 15.2%.

The Nasdaq is up 1,899.81 points, or 14.7%.

The Russell 2000 is up 264.51 points, or 13.4%.

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NEWPORT, R.I. (AP) — Ready to go out on the town before summer ends? In parts of the U.S., you might have to carry your COVID-19 vaccine card or a digital copy to get into restaurants, bars, nightclubs and outdoor music festivals.

After resisting the divisive concept of vaccine passports through most of the pandemic, a fast-growing number of private venues and some local officials are now requiring proof of immunization in public settings to reduce the spread of the highly transmissible delta variant of the coronavirus — and to assuage wary customers.

It’s unlikely the U.S. will adopt a national mandate like the one in France, which on Monday began requiring people to show a QR code proving they have a special virus pass before they can enjoy restaurants and cafes or travel across the country.

But enough venues are starting to ask for digital passes to worry some privacy advocates, who fear the trend could habituate consumers to constant tracking.

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WHO’S ASKING FOR VACCINE PASSPORTS?

New York City set the tone last week when Mayor Bill de Blasio announced that the city will soon require proof of COVID-19 vaccination for anyone who wants to dine indoors at a restaurant, see a performance or go to the gym.

But a growing number of private venues, from Broadway theaters to music clubs in Minneapolis and Milwaukee, have established their own similar rules for patrons.

“I’m a firm believer in the right for people to choose whether or not they get the vaccine,” said Tami Montgomery, owner of Dru’s Bar in Memphis, Tennessee, which will start asking for paper vaccine cards along with photo identification on Thursday. “But it’s my business and I have to make decisions based on what will protect my staff, business and customers.”

Organizers of the Lollapalooza music festival in Chicago said on its opening day in late July that more than 90% of some 100,000 attendees presented proof of a vaccination, while most of the rest showed they’d recently had a negative COVID-19 test. Hundreds of others were turned away for lack of paperwork.

Only in a handful of states — Texas and Florida are the biggest — are private businesses prohibited from requiring proof of vaccination.

HOW DO THEY WORK?

In some places, venues are simply asking you to bring your vaccination card — the same piece of paper you get from health providers and the Centers for Disease Control and Prevention. Taking a picture of that card at home and then showing the image to the bouncer at the club can also work.

New York City offers a streamlined way of showing a photo through its NYC COVID Safe App, in which people can store images of their vaccine cards and then display them in the app when needed.

Other places are encouraging people to register their credentials using a scannable digital pass like New York’s statewide Excelsior Pass or similar systems adopted by California, Hawaii and Louisiana and private companies like Walmart and the airport security app Clear. Some of the state-sponsored digital passes verify a person’s vaccine credentials through a state or local immunization registry.

Such passes are designed for convenience and to prevent fraud. But that’s also where the biggest privacy concerns emerge, said Adam Schwartz, senior staff attorney at the Electronic Frontier Foundation.

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WHAT’S WRONG WITH QR CODES?

The barcode known as a QR code was originally designed to help track products in a factory. These days, it’s increasingly being used to track people’s devices.

“Those systems are a giant leap towards tracking people’s location,” Schwartz said. “There’s a very real risk of mission creep once there are scanners at doors and people are showing their scannable token to pass through.”

But the coalition that helped create the Smart Health Card framework used by New York, California and the Canadian province of Quebec say they’ve already set privacy safeguards to guard against misuse of health data.

So long as a venue is using a VCI-compliant scanner, there shouldn’t be anything to worry about, said Dr. Brian Anderson, chief digital health physician at MITRE and co-lead of the Vaccination Credential Initiative, which counts Apple, Microsoft and the Mayo Clinic among its members. “That app won’t store an individual’s data beyond the time that the QR code is scanned,” he said.

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WHY NOT STICK WITH PAPER?

Proponents of digital passports say they’re more convenient for already-overwhelmed restaurants and other venues because workers don’t have to peer at everyone’s vaccine cards before letting them in. Lines move faster, and the digital scan reassures those who don’t want to risk damaging or losing their paper cards. It’s also easy to fake a paper card or a photo of one.

The startup CrowdPass, which generates QR codes so vaccinated people can attend events, said it helped get about 15,000 people swiftly admitted into the recent Newport Folk and Newport Jazz festivals in Rhode Island. The events required attendees to digitally upload proof of full vaccination or a recent negative test.

Demand was slow at first, said Duncan Abdelnour, the startup’s co-founder and president. “But since the delta variant has sprung, we’ve had a huge uptick.” Among its clients are couples planning weddings and organizers of other small events. Abdelnour said the biggest spike in calls came after New York City’s announcement.

It’s a crowded market that includes apps made by Clear and Walmart, many of which have now signed onto the VCI’s privacy standards and code of conduct.

But for Schwartz, of the EFF, the best advice for venues that need to see proof of vaccination is to stick to asking for the CDC card or a photo of it.

The process of making vaccination checks should end when the pandemic does, Schwartz said. “Some of the companies that are in this space have a track record of being in the business of monetizing data,” he added. “I’m not going to name names, but they’re the last people that should be involved in developing scanners for proof of vaccination.”

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AP business writer Mae Anderson contributed to this report from Nashville, Tennessee.

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