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A New Race Strategy

$8bn: The amount paid by Liberty Media to acquire the commercial rights to F1
$750m: Sponsorship revenue in 2015, down from $950m in 2011
400m: F1 television audience in 2016, down from over 600m in 2008

Formula One can be a contradiction — cutting-edge on the track, a marketing anachronism off it. But 2017 is the year when the speed of change off the track may outpace the cars on it. New owner Liberty Media has bought the commercial rights to the sport for a sizable chunk of change ($8bn) and has started detailing where it sees the chance to make good on that investment.

The new management team of Chase Carey (CEO) and Sean Bratches (MD Commercial Operations) have outlined clear plans to revolutionize the way the sport is marketed and experienced. Carey has spoken about creating ’21 Super Bowls’, while Bratches has laid out four priorities, including refreshing the F1 brand, embracing digital channels, democratizing decision-making and re-imagining the race experience.There is no doubt that there are plenty of players in F1 that will find change hard when many teams and sponsors have been following the same rules for such a long time. But equally this is music to the ears of many people in F1, who have been arguing for years that the controlled and conservative commercial model it had pursued was causing F1 to fall behind in the race for consumers’ attention.

The new model is looking to build and market the F1 brand — not just the sport. One of the most exciting implications of this is F1 sponsorship becoming more attractive to consumer brands (it’s no coincidence that many current sponsors are B2B brands). I can speak from personal experience that, with a creative lens on it, F1 can open up huge consumer marketing opportunities.

When I was at Martini, our focus when we returned to the grid as title sponsor of the Williams Martini Racing team in 2014 was to disrupt the traditional sponsorship model. We sensed there was a real opportunity to shift our focus away from the track and towards the city centers where the races were being run. Similarly, our campaign didn’t rely on traditional TV-led media channels to drive exposure, but used digital and social channels to engage with our target Millennial consumers. After all, we knew that they were unlikely to be solely at the track or watching the race on TV.Rather, our activation exploited the opportunity afforded by the extraordinary race locations from Milan to Sao Paulo as playgrounds for non-traditional F1 marketing. We treated the race like a city-wide festival, targeting not only the race weekend, but also the week-long build-up, when the energy of the city noticeably rises with the anticipation of the race coming to town. We fed that excitement by creating Martini Terrazzas in Millennial-dense city center locations, fusing music, food, art and, of course, F1 to create the ultimate physical manifestation of the Martini lifestyle. We then drove the unique content it generated around the city, country and world through on-site, live social war rooms. It was disruptive and effective. We were not only able to create buzz and energy around the brand, but drive sales among a new and younger audience.

It wasn’t always easy and it wasn’t always perfect, but we learnt a hell of a lot on the way. Most importantly, it proved the power of F1 to reach a younger, more connected audience away from the track and traditional channels. With sound data and powerful insights giving us a good understanding of our audience’s behavior, we were able to use F1 to create something that differentiated us from our competition and brought new fans to our brand and the sport.

The idea of bringing fans closer to F1 was also a core element of our recent activation with Bose and the Mercedes AMG PETRONAS Formula One team. Our ambition was simple — to use the power of sound to transport people into one of the most exclusive places in all of sport: the triple world champions’ team garage in the moments immediately before the cars go out onto the grid.The Garage was a truly ground-breaking multi-sensory, immersive experiential activation that we created in Austin, Texas to demonstrate the industry-leading Bose QuietComfort 35 Wireless Noise Cancelling Headphones. We used the true sounds of the team garage to create a 360° soundscape, and a custom-developed play-back engine used the Bose headphones to deliver exactly the right sound to each ear as the fan moved around the space. We took nearly 4,000 fans (plus Lewis Hamilton and Nico Rosberg) inside the inner sanctum of F1, while the digital content was shared by millions.In my view, Casey’s ‘21 Super Bowls’ is spot on, and Liberty Media’s stake in Live Nation further enhances their credentials in the space. They have created the opportunity, but now it’s down to the teams, sponsors and agencies to make the most of it.

Another item that will no doubt be right on top of the new American owners’ agenda will be breaking the USA — the toughest (and most domestically saturated) sports market on the planet — but also the one with the greatest growth opportunity. As Bratches has said: ‘Having the theater of Formula 1 in the backdrop of the iconic US cities could be very attractive’, and it’s not hard to see why. For F1 to call itself truly global, and to reverse a downward sponsorship income from $950m in 2011 to $750m in 2015, it must become more than a niche sport in the world’s biggest media market, with the vast eyeballs, engagement and sponsorship dollars that entails.

Even though it is still largely viewed as an unknown curiosity, it is associated with a mixture of cutting-edge technology and old world European glamor, which is not a bad place to start. NBC, the domestic F1 broadcaster, has showed some growth in F1 ratings over the last few years, albeit off a low base.
And the good news is that Bratches, a 27-year veteran of ESPN, knows better than most how to build a sports fan base in the US. He knows the power of storytelling to capture the imagination of the audience. Focusing on the personalities of the drivers, the intense rivalries and the rich history of the sport (including two American world champions in Mario Andretti and Phil Hill), F1 provides an extraordinarily rich vein of content for an audience that can’t get enough of sports history and stories.

Of course, for a country that loves a winner, it will also be critical for the US-owned Haas team to see some success, while getting home-grown and competitive drivers behind a steering wheel as fast as possible is also imperative. It would also not be a surprise to see the introduction of some technical and format changes that would spice up the racing and make it more appealing to a US audience.

All of this might mean that sponsors — many of whom are based in the States — might need to invest a little bit ahead of the curve, but with so much to play for, surely it’s a risk worth taking. Week-long festivals, which combine world-class sport with technology, music, fashion and celebrity, based around street circuits in New York, Miami or LA and heavily marketed to a Millennial audience through re-vamped social channels and distribution platforms. Now that’s a future for F1 that’s easy to buy into.

When the cars take to the grid in Melbourne, it will officially signal the start of a new era of leadership for F1. Liberty Media has talked an impressive game in terms of up-front investment, focus and desire to expand the sport. Now the race is on for teams and their sponsors to rise to the challenge.

Game On: Sport, Brands and Gamification

With March Madness now in full swing, there are an estimated 60 million ‘brackets’ completed, (including one from Barack Obama) attempting to predict the winners of each match from the first round through to the National Championship match. The official NCAA bracket challenge was predictably ambushed by an unofficial challenge offered by Quicken Loans & Warren Buffett, which offered $1 billion if someone could predict a perfect bracket, but with odds of 9.2 quintillion to one, equally predictably every entry was eliminated by the end of the first round.

The popularity of fan games in sport is not unique to College Basketball, with 3.2 million players registered on the official Barclays Premier League Fantasy Football game and NFL Fantasy Football being a huge part of the culture of being a ‘football’ fan. But despite this popularity, brand engagement in both remains minimal, with relatively low activation by partners. EA Sports’ association with Fantasy Premier League is limited to an EA badge offered for your personalised team kit, and doesn’t highlight their role as Sports Technology Partner – a missed opportunity perhaps.

An example of a brand leading the way in this type of activation is the Hilton Honors Fantasy Racing challenge in F1, which invites fans to select four drivers, two constructors, and an engine manufacturer, with their ‘team’ rewarded in points from actual performances at a Grand Prix weekend. As a partner of McLaren, Hilton is at the forefront of the experience – something that is rarely the case in fan games.

The PGA Tour Connect app and T20 World Cup Fantasy Challenge are relatively new additions from rightsholders, but with limited partner activity. As both rightsholders and brands seek to engage with fans in a meaningful manner, activation in the gamification of sport can be a rich area. The popularity of a major event is indeed often enhanced through gamification, as the various NCAA tournament bracket challenges show. With such games coming at a relatively significant cost, it makes sense that rightsholders would look to their partners for financial and marketing support.

Considering the popularity of many major sporting events, and the impact on public consciousness, it is perhaps surprising that many rightsholders and brands alike have not connected with fans like this. With the FIFA World Cup on the horizon, it could be a rewarding pursuit for non-sponsors looking to gain an association with the biggest single-sport event in the world. The official FIFA Fantasy Football, in association with World Cup sponsor, McDonald’s, will have a lot of entrants, but as the NCAA brackets show, ‘official’ does not necessarily mean other brands will not enter the field.

Wimbledon is one event which could lend itself to increased fan interaction: the huge global interest it attracts, combined with the vagaries of its many matches suggests there is more than enough scope to replicate the NCAA bracket format, with clear opportunities for brands to get involved and enhance the fans’ Wimbledon experience.

As we wrote in Synergy’s 2014 #NowNewNext, the gamification of sport is also exploding via wearable tech, pioneered by Nike +, and the gamification of playing, for example with vPar and GameBook in golf.

With rights holders and brands seeking new ways to credibly connect with consumers, gamification is clearly rich in potential both for passionate and casual fans, and of course to draw new fans into sport, but brand involvement has been relatively modest. Now’s the time for that to change.