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Feeling the Force

Liberty Media, who completed their $8bn acquisition of Formula One in January, are beginning to deliver on their promise to attract a new generation of fans to the sport.From creating a more inclusive and entertaining experience for racegoers, to looking beyond direct commercial gain to fully embrace social media and the proposed launch of an OTT channel (as well as making some very smart behind the scenes hires), Formula One is certainly moving in the right direction.

And in this new dawn for F1, one team is making giant strides off the track. With a striking new pink livery, Force India is undergoing a transformation that goes far beyond the aesthetics of the car. Through a savvy commercial strategy, they are putting themselves at the forefront of the Liberty millennial revolution.

Amongst the blue-chip brands, whose logos have adorned the cars across the grid for decades, Force India have quietly been attracting a new breed of partner – and one seldom seen in the paddock before Liberty Media entered the fray; those with a target audience under the age of 30. The illusive and oft-mentioned millennial.Menswear label Farah has been brought on as Official Apparel Partner, bringing to life the partnership through their #RaceReady campaign; “a six-part content series profiling the men behind the scenes of the world’s most stylish sport”. They have also announced deals with designer eyewear brand LDNR and Diageo, as well as a prominent charity partnership with Breast Cancer Care to celebrate the 25th anniversary of the famous pink ribbon.

But the deal which stands out is the recently announced partnership with SPORTbible. Part of the LADbible Group, SPORTbible has become one of the largest communities and distributors of content for sports fans in the world. According to Quantcast, SPORTbible reaches an impressive 2.7m people monthly, of which almost 65% are under the age of 34. The partnership will see SPORTbible given exclusive access to the team to create an array of content, including interviews competitions and behind the scenes video, which will be pushed across their burgeoning social channels.

One would assume that these partnerships may be below many of the inflated rights fees that we see across the grid, placing more emphasis on the reciprocal value that they will receive by association with these brands rather than upfront investment.For partners like Farah and LDNR, it gives Force India credibility and momentum. Brands want to appear alongside other like-minded brands and are likely to seek out teams who have a stable of sponsors who fit their values. We saw a similar situation in our work with Martini, whose very visible title partnership with Williams F1, helped to make Williams a more attractive prospect for sponsors such as Rexona/Sure and Hackett.

For SPORTbible, the association has the potential to enhance the whole sponsorship proposition at Force India. Firstly, it gives potential new partners (as well as the current stable) significant additional exposure to a younger audience and a ready-made activation platform; both of which are extremely valuable negotiating tools. Secondly, if SPORTbible can help Force India to develop a more sophisticated approach to data capture and segmentation, access to this database, full of rich customer data, becomes a very valuable part of any sponsorship proposal and something which not many rightsholders are able to match.

The shift in livery is also unlikely to be a whimsical choice but one made with commerciality in mind. Whilst certainly attractive to Indian brands, the Indian flag inspired livery of past seasons will no doubt have steered potential sponsors away in fear of not feeling a natural part of what was a heavily Indian stable of partners. There are even strong rumours, at the time of writing, that owner Vijay Mallya is also considering changing the teams name in order to widen the commercial appeal. One thing is not in doubt; their current choice of livery will certainly help them to stand out from the crowd.

What this new strategy does is not only open-up a new and potentially very valuable audience for Force India, with a monetizable relationship that could last decades, it also opens the door to a raft of new ‘B2C’ brands who want to reach millennials at scale. And as first-movers in this space, Force India are extremely well placed to reap the financial benefits.And crucially, this incremental revenue will help a team who have been plagued by financial concerns in recent times to safeguard their future. Concerns which would be magnified if they were to lose the sizeable revenue from numerous Mexican brands that come with driver Sergio Perez, should, as rumoured, one of the bigger teams come calling.

All of this happily coincides with an upturn of fortunes on the track. Indeed, in a world where there is a gulf in levels of spending between teams, Force India are, pound for pound, arguably the best team on the grid this season.

Formula One is changing and Force India may just have put themselves in pole position in the Liberty Media revolution.

The Missing Formula

Analysis of industry data suggests that the F1 ecosystem raises over £1b per year from sponsorship. This includes Team Sponsors and Suppliers (ranging from £100m for the big boys to £20m for the smaller teams), F1 Partners (around £25m per year in cash or Value in Kind from each of the 6 global partners) and Race Sponsorship (around £10m for each of the races with title sponsors plus trackside advertising).

To put that into context, the London 2012 Olympic and Paralympic Games raised around the same amount (£750m from domestic sponsors plus around £250m contribution from the IOC for TOP partners) – but that was for a 4-year cycle.

So here’s a question: Given how much is spent on it from some of the world's leading brands, why is F1 Sponsorship not at the leading edge of sponsorship thinking and activation?

It’s fair to say that F1 is ahead of the game in virtually everything else it does. So surely F1 Sponsors should be cleaning up at the major sponsorship industry awards.  In fact, over the past 5 years, an F1 sponsorship has won only once out of a possible 47 SIA awards (Vodafone’s Best Sponsorship of a Team or Individual in 2009). Case studies from F1 should be inspiring sponsors in other sports.  Here at Synergy, we should regularly be showcasing examples from F1 in the ‘What We Love’ section of Synopsis. But this just isn't the case – at least not to the extent that one would expect.

Don’t get me wrong, there are some great pieces of activation in F1 (I’ll point out some of them later), but as a whole, F1 sponsorship is pretty uninspiring.

Having run the Reuters sponsorship of WilliamsF1 from 2000 - 2003 (yes - I agree - it was nowhere near 'award-winning'!), I thought I would have a go at answering that question based on my own personal experiences.

1. Most Formula One sponsorships are B2B

Reuters primarily used F1 for B2B relationship building. A quick scan of F1 sponsors shows that over 40% have significant B2B businesses. There is little better than F1 if you have a relatively small number of high-value, global customers who you reach through targeted sales and marketing programmes.  Travelling around the world to all the key markets, Formula One and Paddock Club™ are the absolute gold standard of corporate hospitality. With this being the focus of the brands' activation programme, it is little wonder that it remains unseen by the mass audience, award panels and the Synopsis editors.

The activation challenge for the B2B partners, however, is to create the most compelling brand stories and event experiences to attract their audience.  Because the fact is, especially in the small markets, most of the B2B sponsors are going after a very similar audience, in some cases exactly the same people.

2. There is too much focus on brand exposure and logos on cars and not enough on activation

Whenever brand exposure is such a critical part of the sponsorship package, it is easy to rely too heavily on it at the expense of all the other things you can do with the sponsorship. I absolutely hate the “media value” figures that are at the heart of so many F1 sponsorships.  However, it is easy to measure and as long as the media value is bigger than the cost of the sponsorship, brands can be tempted to think “job done”. In comparison, Olympic sponsors can't rely on any media value to justify their sponsorship.  That's why they have to work much harder and be far more creative with their activation.

A knock-on effect of this over-emphasis on media value is the fact that it can lead to an under-investment in activation.  Typically, the rights fee is so high (because brands are paying for the exposure) that there isn’t enough left over for activation. I’m not a big believer in any rule-of-thumb ratios, but the proportion of rights fee to activation spend when I was at Reuters is definitely not going to make it into any how-to textbooks. I suspect this isn't unusual for F1 sponsors up and down the Paddock

3. The calendar gives you no time to plan and develop great campaigns

The F1 season is relentless. The first race is in early March and the last race is in late November. In between is a never-ending cycle of travelling and managing the day-to-day execution of race weekends. Everyone goes on holiday during the 4-week summer break and at the end of the season, which then leads into Christmas. Trust me, if you want a year to fly past, get a job in F1.

Which basically just leaves January and February to do any sort of campaign development. But even those months tend to be dominated by tactical planning for the season ahead. There just isn't the time to think about a season-long campaign or a brilliant piece of activation.

Another challenge is the global scale required by an activation campaign. Japan, Abu Dhabi, Britain, the US and Brazil have very little in common with each other from a marketing perspective.  So as an F1 sponsor you are sort of in limbo between creating and delivering a global campaign that doesn't quite work in loads of markets and developing local campaigns which feel a bit 'small' and short term.

4. The F1 community is too closed

There are some great people who work in F1.  However, it needs more ‘churn’.

For example, when I needed a sponsorship agency, everyone I invited to pitch was effectively a specialist F1 agency. I understand why most sponsors do that, but it leads to a form of 'groupthink' where new ideas are thrown out in favour of "what we did last year" or "what we do with our other clients".

This happens up and down the paddock. If an F1 team needs a new Account Manager, they are likely to hire someone from one of the other teams. If a brand needs an F1 Sponsorship Director, they are likely to hire someone who has done a similar job at another sponsor. If an F1 agency hires a new Account Director, they typically hire someone who already has F1 experience.

The danger of this 'closed' community is that it loses the fresh influences and perspectives that drive creativity.

I know it’s tough (I’ve been there myself) but I think F1 sponsors need to be braver and set the bar higher for their activation campaigns. The benchmark should not be: “we want to create the best F1 sponsorship campaign”, but rather “we want to create the best sponsorship campaign”. And to do that, I think that it is critical for sponsors to look for inspiration outside the very small world of F1.

The point of this blog is not to say that there are no good F1 activations - because clearly there are some great examples.

My point is simply that given the number of world-class brands who are sponsors in F1, the amount that they invest and the possibilities of F1 as a platform, there should be far more ground-breaking activation programmes than there are.

Some of our Favourite F1 Activation Case Studies:

Johnnie Walker - Step Inside the Circuit Series

Johnnie Walker extended this campaign with some experiential activity in Travel Retail environments but at its core was some great behind-the-scenes content, from Monte Carlo (below), IndiaSingapore and other races

Vodafone:

One car, no team:

Camping:
Santander:

London Grand Prix:

The Silverstone Chase

Hugo Boss - Dress Me for the Finale

Using a special online configurator, consumers in each country could create bespoke designs of the drivers’ race suits. The drivers wore the designs during qualifying for each race, while the best two designs as voted by the audience were worn on the Sunday during the Brazilian Grand Prix. Boss also did a good job of connecting this activation to their social media and retail channels:

Red Bull - Faces for CharityIn exchange for a donation to charity (which Red Bull matched), consumers could upload a photo which was then put on the car for the British Grand Prix.

Vodafone -  Drive to the Big League

Vodafone introduced this initiative at the British Grand Prix in 2010 which offered one of their small business customers the chance to put their logo on the car for the British Grand Prix.  Vodafone have taken it to a whole new level in India now, where they have combined it with a Dragons Den style TV programme to select the winner – watch it – it’s brilliant!!!

See - it is possible - more of that please!!!