The British Grand Prix passed slightly under the radar last weekend, due largely to England’s 2018 Fifa World Cup performance dominating the sports news agenda, not to mention tennis' Wimbledon and the start of the Tour de France.
Nevertheless, it’s a hugely exciting time for Formula One as an industry. The Liberty Media identity is beginning to come through whilst sponsors and teams are finding new and varied ways of trying to grab the attention of potential customers in an incredibly crowded space.
I opened the doors of Right Formula in 2009 and since then have seen a huge shift in the marketing landscape around the sport.
The early days of sponsorship in Formula One were an exercise in branding and hospitality. Companies wanted their logos on driver overalls, on bodywork and around the racetrack. They wanted to entertain guests in the paddock and, more often than not, wanted to be seen doing it.
As the model developed, brands realised they could layer on money-can’t-buy experiences for their guests. VVIP hospitality included grid access, meeting the drivers and, in some cases, travelling to and from the circuit alongside the teams.
Up until 2007, teams relied heavily on tobacco companies. These companies were spending in excess of UK£50 million for title sponsorships up and down the paddock and budgets across the board were huge, which had a massive influence on the sponsorship approach. The prevailing attitude from teams and sponsors was to create content to simply deliver to broadcasters, with little thought on targeting and how it linked back to the potential customer base and their bottom line. I remember drivers trekking in the Himalayas, taking powerboats across Lake Como to beat the speed record and even being sent into space!
Tobacco branding at the Formula One Japanese Grand Prix in 2001
But what we’ve seen at Right Formula over recent years in Formula One has been indicative of the gradual evolution of sponsorship on a wider level. Nowadays obviously a much greater level of intelligence is applied to sponsorship because brands want quantifiable results. They don’t just want anecdotal feedback that someone has enjoyed their day at the race, or that their logo might have been seen on TV.
The shift towards digital-first activation has been well documented. We all appreciate that consumer behaviour has changed to the point where casual fans may prefer 90 seconds of Instagram content over a full two-hour race broadcast. However, from the brand perspective, the real interest of digital lies in the transparency on ROI [return on investment] and understanding the depth of engagement from potential customers. The successes or failures of an activity are far easier to measure, which has huge benefits for brands who are constantly looking to improve their offering.
Aside from the predisposition for brands to focus on digital, we’ve also seen an increased level of sponsorship activity away from the racetrack, rather than brands just focusing on what happens on it. For example one of our clients, Logitech, has an incredibly successful partnership with McLaren via the team’s esports proposition, which delivered a huge increase in sales of steering wheels as a direct result.
There are countless other examples of activations and campaigns on the non-race element. Recruitment company Randstad partnered with Formula One racing team Williams to develop the Randstad Engineering Academy. The programme engages with talented young engineers throughout their studies by providing mentors and support from the Formula One team, with a view to enhancing their chances of a career in the sport on completion. It’s an incredibly fertile environment.
As regards the future of Formula One, I feel the outlook in broad terms is very positive. Like any sport or entertainment product nowadays, there is huge competition for consumers’ attention. The willingness of Liberty to embrace new media should be commended, and it’s encouraging to see that Formula One is the fastest growing sport on digital platforms of any sport globally.
Formula One's new esports series offers new opportunities for brands
However, Liberty and other rights-holders will have to continue to work hard to help brands justify their partnerships. To back this up, we have had a number of brands contact us over the last few months – both to help them structure prospective partnerships as well as put a microscope over the activation of brands already invested in sport. In both cases the brands want to ensure they achieve authentic and measurable results in the future. This is a world away from the approach of ten plus years ago, when there was often a headlong dive into partnerships without much consideration of the broader long-term picture.
My view is that brands will have to work harder and harder to connect with their target audiences. We live in an increasingly cynical world, so if companies are seen to be just pumping money into something in return for some nice hospitality tickets and to rub shoulders with drivers then consumers will see through it. Moving forward, I believe the most crucial aspect of relationships between brands and teams will be the level of authenticity of the partnership.
Take Pirelli as an example of a brand where there is an endemic partnership between the product and the teams, because tyres are clearly critical to the running of the sport. The teams couldn’t operate without their technology and tyres, and in turn Pirelli want to help tell the world that their product is best in class. They’re adding value not by slapping a logo on an overall, but by having an authentic reason for their brand to be positioned in the sport.
For brands where there is no natural link then the challenge will be greater. However, the combined effect of this means sponsorship in the sport will be increasingly competitive and creative which will ultimately deliver better results. This is good news for all of us in the industry.
Robin Fenwick is the chief executive of Right Formula, a multi-service sports sponsorship and events consultancy.
W: www.rightformula.com
F: www.facebook.com/rightformula
T: https://twitter.com/RightFormula