|It is generally overlooked but nonetheless undeniable that innovation in the form of new product development (NPD) has been the lifeblood of top sport worldwide in the modern era. Football’s all-conquering Premier League (created in 1991) and Champions League (1992), cricket’s revolutionary Twenty20 format (2003) and resultant cash colossus the IPL (2008), rugby union’s game-changing World Cup (1987) and European Cup (1995) are all standout NPD examples, but there are many more.|
|Next off the production line in 2014 is an innovation which has the potential to have the most profound impact of them all – not just on sport, but on society as a whole. Formula E, motorsport’s most radical innovation in generations, is the first world championship race series for electric cars, and will hit cities from London to Los Angeles after its debut in China in September.|
Although it’s still early days, even at this stage Formula E is showing all the signs of becoming a major success.
It’s backed by the considerable weight of the Fédération Internationale de l’Automobile (FIA). The cars and tech are being developed by companies with serious racing credentials such as McLaren, Williams and Michelin. And the starting grid is full, ten teams having signed up to take part from a combined eight countries – five from Europe, three from Asia, and two from the US.
|There’s also already a tangible feelgood factor in Formula E’s commercial programme. Team investors include Leonardo DiCaprio and Richard Branson’s Virgin. Broadcast deals (Fox, TV Asahi) and sponsorships (DHL and Qualcomm) are flowing, with more in the pipeline. All driven by an astute marketing and PR strategy led by CEO Alejandro Agag, the latest example of which saw the first public demonstration of a Formula E car at CES in Las Vegas.|
But the big question, of course, is whether Formula E will prove a hit with fans.
|We think it will.Formula E cars will be as good-looking as F1 cars, and seriously fast. 0-60 in 3 seconds, and a top speed of 150 mph. That will feel blindingly fast on the closed-off city street circuits Formula E will use.|
F1-type cars racing at over 150 mph through the streets of iconic cities such as London, LA, Monte Carlo and Rio at night will clearly be an amazing spectacle.
Add to that the interactive innovations Formula E is working on – including enabling fans to actually influence races online while they are taking place – and it’s clear that it could also be a revolutionary fan experience.
What's not to like?
Along with the fact that it will all be delivered with minimal climate pollution, and raise awareness of the benefits of driving zero-emissions electric vehicles in congested cities, and it’s also clear that Formula E could be instrumental in making sustainability sexy, worldwide.
|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), India, Singapore and other races
One car, no team:
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!!!