Fact: Over 60% of motorsport fans prefer to buy from a brand they see during the races. However, the most successful brands don’t use sports sponsorship in isolation, instead, they integrate it across all marketing and communications touchpoints in their business. In this article, we are going to explain how motorsport sponsorship works and how a brand should approach it.
If you compare sports sponsorship in different sports, you will find some common ground with concepts, frameworks and ideas that would work for all of them, but that's just the basics. Every sport offers sponsoring companies a different list of benefits and assets to deploy and the way you utilise the same asset can vary a lot from football to tennis and Formula 1.
That's why is never easy and rarely correct to compare sports sponsorship in different sports, also because the demographics of the fans are different. Motorsport fans are different from football fans in terms of how they are educated, their interests, their income, their age and also gender split. But more than that, motorsport embodies some unique values that are only marginal in other sports, like innovation and technology.
To give you a quick example, when signing a sports sponsorship with an F1 team the brand generally obtains a number of Paddock Passes that can be used in very different ways: they can be used to reward top executives, convert potential clients, nurture key business partners relationships but also a prize for an online consumers competitions.
The same can be said for the access to the drivers, senior team personnel and team HQ: it can be used to deliver a company-wide business meeting, deliver an experiential event, create case studies and shoot behind-the-scenes original content.
Structuring a strategic motorsport sponsorship requires expertise and deep knowledge of the sport and its main players.
Considered by many as a major sport but yet radicated in Europe, Formula 1 has sometimes struggled to obtain the deserved credit for being the biggest annual global sport. However, today, there are no doubts about it and Formula 1 is on for global dominance.
The sport has registered significant rises in season cumulative audience in several markets, including many of F1's biggest markets: USA (+58% YoY), France (+48% YoY), Italy (+40% YoY) and the UK (+39% YoY).
It has been the growth in the USA, particularly, that created a positive domino effect for Formula 1.
The series has been present in and out of the USA for decades and since 2012 has always had a US race, but it is now with several races taking place in the States that it is leveraging the most its presence in the market.
Next year the first US race will be in Miami on the 7th of May with Austin (Texas) following on the 22nd of October and the highly-anticipated Las Vegas GP on the 18th of November. Having three races in the USA and others in North and Central America (Canada and Mexico) gives American brands a fantastic opportunity to activate partnerships and engage multiple times with their target audience. In a few words, Formula 1 is now a very effective marketing tool also for brands only focused on the Americas.
But how Formula 1 has finally broken into the United States? First of all, Formula 1 is essentially now an American company which stated from the very beginning how the USA would have been crucial for the expansion of the sport, so the focus and resources have been efficiently directed towards this goal.
The broadcasting times have been adjusted to fit better into the US channels' programming schedule which opened up opportunities for wider broadcasting deals. On top of that, thanks to Netflix's "Drive to Survive" series, Formula 1 has been able to engage, and yet educate, the American audience.
But nothing would have happened if the product itself, Formula 1, did not have become more attractive and richer in adrenaline than the previous years. In fact, a new generation of young drivers able to talk to fans in the right way while deploying great performance on track was essential to Formula 1 expansion in the USA. Last but not least, after years of Mercedes dominance, the sport provided again great battles between several teams and drivers.
Having said that, how Formula 1 is performing in other markets? It is growing, simple as that: the biggest market in terms of unique viewers is China (70.8m unique viewers in 2021, +13% vs 2020), but there are also significant YoY gains in Spain (+272%), and Russia (+129%).
China, unfortunately, will not host again the Formula 1 race in 2023 because of COVID but the list of countries willing to replace it seems pretty long. However, apart from replacing China, there are other countries that knock on the Formula 1 door, like South Africa and countries that have just arrived in the sport and already going for long-term renewals like Qatar.
As a motorsport marketing agency, we might be biased when explaining to a brand why investing in Formula 1 is the greatest marketing opportunity right now, but those facts do not lie.
The Formula 1 global dominance is real and the race for countries, corporations and brands to be part of it is definitely on.
As a sports marketing agency, we believe that sports sponsorship is one of the most powerful marketing tools for a brand. However, we are often asked about the sports sponsorship vs hospitality package comparison. In all fairness, it is a bit like comparing apples to oranges and here we explain why.
A sports sponsorship is a 360 degrees marketing tool that gives a brand full access to the sponsored team assets and benefits: branding spaces, hospitality passes, official imagery and footage, social and digital collaboration, engagement with the team's fan base and access to the drivers and team personnel for events and content production purposes. On top of that, it allows the sponsor to integrate their products and services within the team and develop powerful storytelling thanks to the promotional rights included in the sponsorship.
The latter, the promotional rights, or the lack of them, is the most differentiating aspect between signing a sports sponsorship and buying a hospitality package. Basically, when buying it, you would be at the race weekend enjoying premium hospitality and providing your guests with a fantastic experience but, as a brand, you will not be able/allowed to officially talk about it, because you have no association with the sport or the teams.
Therefore, which one is the right one to select? It all depends on the company's objective and budget, but also on the overall structure of the marketing strategy. A sports sponsorship can really deliver value on many layers and well-structured companies should definitely go for this. However, if your company does not have a well-structured and defined marketing strategy, then it would be easier and more cost-effective to buy a hospitality package for your most important guests at relevant races.
Whatever your choice, we will be delighted to help in your next steps towards motorsport.
The following story is the same old story that every sponsorship guy in the F1 Paddock will tell you regarding why brands should partner in F1: it is the pinnacle of motorsport and it is a global sport that runs every single year from March to December.
Fine, everything is right and correct. But it is not enough.
Brands are not affected anymore by the CEO syndrome (when a company sponsors yacht racing because a top executive likes yachting) and marketing executives need to show a positive ROI from almost everything they do. They think more strategically now and decisions are very much based on analytical evidence, that’s why the same old story that I told you above, although true, is not as effective as used to be.
In January 2017, Liberty Media bought F1 and made several changes to a sport that had been untouched in the last 20 years. Those changes now provide unique benefits to brands, making this the right moment for them to enter the sport based on the following reasons:
As such, a Formula 1 partnership is definitely the must-have marketing tool for a brand today, but selecting the right team, the right assets and the right investment is a very challenging task, that’s why at Drive we guide brands in the ecosystem to ensure they sign a strategic and meaningful partnership.
When defining the sponsorship strategy, companies sometimes struggle to decide whether to sign a global sports sponsorship or a regional one, that's why we will be talking about this topic: "Sponsorship: Global vs Regional".
Although there are sports that are truly global phenomena, a company might want to focus only on some of the countries touched by that specific sport. They also do that with the idea of investing less money in the sponsorship but this cost-saving operation is not always worthwhile.
For example, let's look at a Formula 1 sponsorship: the sport goes to 23 countries and 5 continents every year but a company can be only interested to promote its brand and products in North America. What should they do?
Global Sponsorship: Signing a global deal would mean that they can leverage the association with the sport for the whole championship, running digital campaigns and online competitions connected to the Formula 1 calendar. Also, they could activate the rest of their assets (hospitality, events, drivers' appearances) in every local market. A crucial benefit is an opportunity to shoot content with the team at different times during the year, tailoring that content around the company's marketing strategy every single time.
Regional Sponsorship: The option to sign a deal only for North American races can be also a good one, however, the rights to talk about the sponsorship might be time and content limited. What does it mean? It means that the company can leverage the sponsorship, for example, just a week before and a week after the race in North America and the content they can utilise has to be shot in that specific market and distributed only on the company's North American digital channels.
Hybrid Sponsorship: This can be a sponsorship very similar to the regional one but with the opportunity to leverage the association with the sport for the whole duration of the championship. This means the opportunity to utilise the content produced by the team in other races of the season and deliver year-round digital campaigns. Obliviously, most of the assets (branding, hospitality, drivers' appearances) will be utilised only in the target markets, but in this way, the company can build a meaningful narrative around the sponsorship while still saving some money compared to the global option.
Conclusively, sponsorship: global vs regional, what is the best option? It really depends on the company's objectives and budget, but also on the team they select to sponsor. Some of them are more flexible than others in accommodating particular requests from sponsors.
That's why it is always highly advisable to have the support of specialised advisors like Drive when navigating the motorsport ecosystem.
We spend most of our time consulting with brands and advising them on which motorsport team, driver or championship they should sponsor based on their objectives and budget. However, another solid option to utilise motorsport as a marketing platform is to become a partner of a circuit, the question is: why sponsor a racetrack?
Some of the most innovative circuits in the world are not only the venues for Formula 1 and MotoGP races, but they have gone through a diversification process. Of course, motorsport will be always their key element but the venues are now open for business 365 days per year, attracting fans and brands thanks to the various activities they develop.
There are many ways in which a company can leverage a sponsorship with a racing circuit:
Naming & Branding: With international events taking place at the selected circuit, a company can drive brand awareness and preference by naming and be present in the venue where millions of fans enjoy their favourite sport.
Hospitality & Events: Being a partner of a racing circuit gives you access (in a more or less official way) to all the events that take place at the race track. You can invite your guests to watch the F1 race from a privileged spot as well as utilise the venue to organise a "different" corporate meeting.
Product Promotion & Experiential Activities: Launching a new product utilising the circuit facilities is also another great way of leveraging the partnership with the racetrack. Additionally, you can organise test drives of supercars for your key clients and best-performing employees to give them an unforgettable experience.
Content & Digital: Exciting and original content is key to success for every brand nowadays and a racetrack can be the perfect "studio" to shoot fantastic short and long-form videos. Moreover, the official digital channels of the venues can amplify the reach and engagement of your digital campaigns.
As such, motorsport is a 360-degree marketing platform and the idea of sponsoring a racing venue can be very strategic for brands who are looking for specific assets to deploy in their overall business strategy.
Is it clear now why sponsor a racetrack?
Conclusively, although there are a lot of potential benefits, not all the circuits are the same and only expert guidance like Drive can support a brand in structuring the sponsorship in the right way and achieving a positive ROI.
It is fair to say that companies, at first glance, prefer to sponsor a winning team instead of a midfield team. However, several considerations need to be made before saying that this is always the right thing to do.
Reputation: being the partner of a team that every Sunday fights for wins clearly helps to strengthen your company's reputation, particularly if you are a technology partner of that team, providing them with the solutions to perform better on track. Differently, if you are a more standard partner (like a bank or an entertainment company) this aspect is not crucial. And sometimes, an unexpected podium or win from a midfield team can be a very powerful marketing story to tell as a sponsor.
Visibility: some may think that a winning team gets much more TV coverage than a midfield team and this is not true. Formula 1, for example, constantly tries to distribute TV coverage equally. Moreover, because drivers in the midfield tend to battle more than the ones in the first positions, they generally get more TV coverage than the front-runners. In fact, in the past, dominant teams have even complained of a lack of TV coverage.
Support: the top teams tend to have bigger marketing departments but also a larger number of sponsors to serve, therefore flexibility and availability to activate the sponsorship can be affected by how the workload is managed inside the team. However, when it comes to utilising the drivers or some particular team asset (like the factory) for promotional purposes you might need a lot of planning as the number of requests also from other sponsors is high. Differently, activating a sponsorship with a smaller team can be easier, although the sponsor might need to do a bit more work internally as the team resources are limited.
Investment: a partnership with a championship-winning team will be massively more expensive than with a midfield team, so if you have the proper budget to still have a comprehensive marketing rights package it is the right thing to do. But, if you have to reduce to the minimum your partnership benefits to be with a top team, then is better to be with a midfield team having more assets to deploy.
Conclusively, there is no right or wrong, it really depends on the objectives and budget of the sponsor. A well-structured and carefully planned sponsorship always works, but in order to do that, you need expert, competent and independent guidance.
One aspect that is often underrated when it comes to signing a sports sponsorship deal is selecting the right time to sign a sports sponsorship.
The average sports sponsorship negotiation time is around 6 months, mainly because of the sponsor's internal structure and processes. Therefore, it is an activity that needs to be carefully planned, also because sports properties have their deadlines as well.
When a new sponsor is coming in, sports teams have to adjust marketing collaterals, branding layout and the overall plan for the promotional activities for the year.
That’s why we always advise our clients to engage in a negotiation very early on, so they have the chance also to know the team, understand the sponsorship assets, experience as a guest what a race weekend can look like and then take a decision with all the cards on the table.
Most importantly, agreeing on a sponsorship deal at the right time gives the sponsor and team the opportunity to plan together how to activate the partnership from the very first day.
It is not rare to see sponsorship deals signed a few days from the start of the championship, but then it takes weeks (if not months) to leverage the partnership effectively.
Conclusively, when is the right time to sign a sponsorship deal? We advise engaging with the team 8-9 months before the next championship start and to sign the deal at least 2-3 months before the first race.
When we talk about sponsorship in motorsport, meaning all the categories that make it up, it is correct to go beyond the surface of sponsorship and understand what benefits it offers to those who sponsor a team.
We are not only and exclusively referring to the logos on the car/bike, but to everything that concerns an entire company, its values, and its history, without forgetting all the people who work within it, from the CEO to the workers.
Starting with what immediately comes to mind in the eyes of the public, namely the logo positioned on the vehicle, we can say that its position is extremely relevant and we should not be fooled by its size or where it is positioned: if we look at Formula 1, areas such as the halo or the head-rest, although small, are very strategic and generate lots of media value because being often well-framed, they make the sponsor's logo very visible and defined. This is part of what is known as branding, i.e. all those strategies and activities that make a particular brand recognisable and distinguishable from direct competitors. In addition to this, if you want to push not only the association with a team but also with a driver/rider, branding the helmet is a winning choice and one that can make all the difference.
What is the biggest dream for a motorsport fan? Having a pass to the paddock to get up close, meet, and take pictures with the drivers he/she sees racing on TV almost every weekend. Well, this is all part and parcel of the benefits that come with a sponsorship: passes for access to the paddock, but also those for access to VIP hospitality (MotoGP VIP Village and F1 Paddock Club to name a few) and their fan zones, are a great way to involve not only the executives of the sponsoring company but also as a reward for the company's employees or business associates.
Remaining in the driver sphere, a motorsport sponsorship agreement allows access to them to produce multimedia content, or it is possible to request their presence as guests at corporate events or during events where fans are also expected to attend.
A final benefit conferred by a motoring sponsorship, certainly not in terms of importance, is access to the factory of the sponsored team: inside it will certainly be possible to try out simulators or experience firsthand how a pit stop works, but it will also be possible to use a meeting room to hold company meetings in a different and perhaps more stimulating environment than the usual and classic meeting room of the company itself.
Once we understand how important and effective sponsorship benefits are, there is nothing left to add except that an agency specialising in sports sponsorship is very often needed to help the prospective sponsor select the best benefits according to its needs and mindset.
The world of sports sponsorships, but the world of sports in general, as we can easily imagine, follows the global economic, social and environmental trends very closely and reflects the changes, one example is the technology sponsorships in motorsport.
It is in the last two years that, due to the Covid-19 pandemic, the greatest changes have taken place: among these, there is an acceleration of the use of digital services, to which so many people around the world, both for work and personal reasons, have turned to. It is no coincidence that the use of digital technologies and software has increased significantly: consider that Zoom, a video calling software, in 2020, the first year of the pandemic, increased its turnover by 326% compared to the previous year.
How can this be linked to sponsorships in the world of sport and motorsport in particular? Looking at motorsport sponsorships in Formula 1, it can be seen that the championship and all the teams now have sponsorship relationships with technology brands: these are of the most diverse nature, from video calling software to cloud services via cybersecurity, and with brands linked to cryptocurrencies and blockchain. A reason why is that the technological innovations tested by the various teams are then reused and adapted to other contexts, such as urban transport or even the field of medicine.
Starting with the aforementioned Zoom, this well-established brand has signed a multi-year partnership agreement directly with the Formula 1 Championship, but its direct competitor, Webex, is no different, having signed a partnership agreement with McLaren in 2020. It must be added that these video call systems have also proved essential for the teams, who have been able to use them to allow their drivers to interact with fans and to give virtual garage tours to those guests who should have been present at the Grand Prix but could not be there due to Covid-19 restrictions limiting the number of people in the paddock.
Cloud computing is also now more than present in the Formula 1 circus: since 2018, Formula 1 has started to move a large part of its IT infrastructure to the AWS Cloud (Amazon Web Services) to monitor race strategies, better track data and digital transmissions, and the same thing has been done by the teams, who have equipped themselves with other cloud systems such as Google Cloud (McLaren), Ionos (Haas) and Cognizant (Aston Martin).
Hand in hand with cloud computing, which is a key resource for any type of business given its agility, resilience, and speed of development, there is cybersecurity: those tools and technologies, such as Mandiant (Alpine), Sentinel One (Aston Martin) and Darktrace (McLaren), aimed at protecting computer systems and all the data they contain from hacker attacks, are increasingly demanded and used by companies, whether small or large.
But what about other high-profile motorsport competitions such as Formula E and MotoGP, direct competitors of Formula 1? In Formula E, the number of sponsorships in the technology sector is extremely low, almost non-existent, a sign of a championship that focuses more on sponsorships linked to renewable and sustainable sources. On the other hand, the teams of the MotoGP championship, which has innovation as its cardinal value, are increasingly turning to companies operating in the technology sector, as already demonstrated by those sponsorships in the fields of cloud (Aruba for Ducati) and cybersecurity (Kaspersky for Aprilia Racing).
The technology sector is therefore confirmed as a major player in motorsport, but not all series and championships are yet able to exploit its full potential in terms of sponsorship.
