Formula 1 sponsors are almost as visible as the teams and drivers themselves and the world’s most expensive sport simply wouldn’t exist without them. But do fans really buy in to the brands on the billboards? Do people at home rush out and buy Ray Bans or solely use DHL for their shipping logistics? Did hoards of Marlboro smokers quit with the ban on tobacco advertising?
Motorsport sponsorship features heavily in the MA Business of Motorsport course content, and for good reason – it’s what greases the wheels and pays to keep the lights on at race tracks around the world. Here, guest blogger Lewis Hallett draws on research conducted through F1 Fan Voice to find out just how effective F1 sponsorship is for a brand.
How Does Sponsorship Affect Brand Engagement?
Sponsorship can be seen as a symbiotic relationship between Formula 1 and the brands who choose to either sponsor one of the teams, or the sport itself. As such, this unique marketing tool can have a profound impact on how fans engage with a brand who chooses to be associated with the global phenomenon of Grand Prix racing.
This is a topic that I have a great deal of interest in. Therefore, as part of the BA(Hons) degree that I was studying at the time, I conducted an investigation in collaboration with F1 that was titled: “How does sponsorship within Formula 1 affect brand engagement?” As Volunteer Moderator for Formula 1’s Fan Voice website, I was given permission to conduct a comprehensive survey via the platform, where I received over 2,000 completed responses from fans all around the globe. This allowed me to gain a substantial insight into sponsorship and brand engagement within the sport. Some of the findings were surprising.
The Campaign Objective
When a brand is in the process of becoming a sponsor for either one of the teams, or the sport itself, there are numerous elements that must be considered by both parties – it’s not just about putting a brand’s logo on the side of a car or billboard in hope that it will increase their awareness. There’s far more to it than that.
It is strongly advisable for the team or sport to identify the campaign objectives of the individual sponsor, in order to create a tailored approach. For example, most people have probably heard of Ray-Ban sunglasses. So, when the brand was negotiating its sponsorship agreement with Scuderia Ferrari, they were likely to be more focused on creating a synergy between the prestigious Ferrari name and Ray-Ban. They don’t necessarily need to focus on awareness. In contrast, when ROKiT sponsored Williams Racing, very few people had heard of their name before they entered F1. So, when they were negotiating their agreement, there was perhaps a bigger emphasis on using their sponsorship as a tool to help increase the awareness of the ROKiT brand. This can generally be linked to the maturity of the company. Younger brands might need to increase awareness, whereas more mature brands may choose to use Formula 1 as a tool to create an emotional connection with its audience. Other companies could utilise the sport as a way to create B2B (Business to Business) relationships. This means that corporate networking opportunities with other businesses could be of more importance for them, rather than focusing on targeting the Grand Prix fans themselves.
One key element of brand engagement is social media interaction. For example: Cognizant is the ‘Title Partner’ of Aston Martin Formula One Team, and Heineken is a ‘Global Partner’ of Formula 1 itself. But how do these partnerships affect the amount of engagement each sponsor receives from Formula 1 fans via social media, and how can their social media campaigns be optimised for a better chance of success?
Firstly, it’s important to consider how likely they are to receive an increased number of followers via their social media platforms as a consequence of being associated with Formula 1. After conducting the survey on F1 Fan Voice, it was outlined that just under 40% of the 2,000+ respondents follow at least one brand on social media due to the brand sponsoring a Formula 1 team. This figure was just over 10% lower for brands who sponsor Formula 1 itself. This suggests that a company has a higher chance of increasing its number of social media followers by sponsoring a team, rather than the sport. However, it is extremely unlikely that this will be the only element of brand engagement that a potential sponsor will be looking for. Formula 1 offers its sponsors many benefits that the teams are unable to provide. For example, the title rights to a Grand Prix, or the naming rights to awards such as the DHL Fastest Pit Stop and Pirelli Pole Position Award. This gives these brands the opportunity to post exclusive content via their social media channels, in relation to the awards that they present e.g., the DHL Fastest Pit Stop standings table.
It was also beneficial to discover the justifications as to why fans follow certain Formula 1 team sponsors on social media. The survey respondents were asked which of these two aspects would make them more likely to follow a sponsor on social media: “whether the sponsor posts regular content about Formula 1 on their social media channels” or “whether you are interested in the products/services the sponsor provides”. The latter proved to be significantly more important for fans, thus highlighting the importance for brands to convey themselves in a way that will generate an interest for them within the Formula 1 community. Therefore, the reason some fans choose not to follow any sponsors on social media at all, could be because they are just not interested in them.
This should not take away anything from the importance of ensuring that the digital media a sponsor posts is engaging for fans. Therefore, one element of the investigation explored this topic further. The survey results illustrated that fans prefer sponsors to post F1 related competitions even more than pictures from Grand Prix weekends, driver interviews and F1 news. Fans can get pictures, interviews, and news from other sources, whereas competitions are generally scarcer. This could justify the reasoning behind these results. Hosting team related competitions may perhaps be seen as more expensive than the other alternatives due to the need for prizes, but in exchange, they could be more likely to increase their number of followers, seeing as competitions are popular amongst fans. With Formula 1 content online being extremely saturated, it could be worthwhile for the sponsor to post content that fans are unable to get from any other source. For example, if Petronas hosted a competition on Instagram, with the prize being a pair of signed Lewis Hamilton race gloves – this would be a very unique opportunity, and not something you see on every Formula 1 related social media account.
Buying Loyalty via Sponsorship
A sponsor doesn’t want fans just to engage with them via social media, they also want them to purchase their products and services too. As such, an additional part of the research was to discover how sponsorship within Formula 1 affects fan purchasing decisions. Over 40% of the respondents replied ‘yes’ to the question “has the factor that a brand sponsors a Formula 1 team, or the sport itself, ever influenced a purchasing decision for you before?” This could be viewed as a significant portion of the fanbase. However, some sources state that this figure is even higher for NASCAR. This can therefore be interpreted in various ways. As NASCAR is generally seen as an American sport, whereas Formula 1 is more of a ‘global’ sport, it could be said that American motorsport fans display higher levels of ‘fanatical consumption behaviour’ than the population of most other countries. On the other hand, some could argue that NASCAR teams are more fan-centric than Formula 1 teams: therefore, having a larger impact on fan purchasing decisions.
If a fan has a loyalty towards the brands that sponsor their favourite team, it is important to consider how this impacts their opinions of the brands that sponsor rival Formula 1 teams. Over 11% of the respondents said that they were either ‘likely’ or ‘very likely’ to avoid buying the products/services from a brand that sponsors a rival team to the one they support. Although this could be interpreted as a minimal amount; bearing in mind that Formula 1 has over 500 million fans worldwide, this figure should not be overlooked.
Another factor which a brand should consider when negotiating a sponsorship agreement within motorsport is the affect that the duration of the partnership can have on sales. This is highlighted by the fact that over 40% of the respondents agreed that the longer a brand is a sponsor within Formula 1, the more likely they would buy a product/service from them. This helps to underline a key benefit of longer-term sponsorship agreements.
It is also important for a potential sponsor to consider where it believes the best place to advertise will be throughout its sponsorship campaign. Firstly, it must decide whether it is more likely to meet its campaign objectives by sponsoring an F1 team, or by sponsoring Formula 1 itself. To understand this from a fan’s perspective, the respondents were asked which of those two options they thought would be more beneficial for a brand. Sponsoring a team received almost three times more votes than sponsoring the sport itself did. This shows that from the fans point of view, sponsoring a team would be more beneficial than sponsoring Formula 1 itself. But why could this be?
Qualitative research conducted during the survey showed that the reasoning behind this includes the factor that some find it easier to spot and remember brands which sponsor a team, in comparison to the sport itself. This either means that Formula 1 could do more to help increase the visibility of its sponsors to fans or use more engaging methods for supporters to remember them. Another reason that some fans thought that it would be better for a brand to sponsor a team was because they find it easier to relate to a team, than with a large global sport. This was supported by the fact that you can identify with a team’s drivers, cars, and personnel. Other academics have highlighted the importance of fan identification, as this can boost loyalty, which in turn improves sponsor recall and recognition; thus, justifying why sponsoring a team could be seen as more beneficial.
The physical location of a sponsor’s logo was also analysed during the survey. With a team’s car being voted the most likely to catch a fan’s attention, this again highlights the benefits of sponsoring a team. However, there are disadvantages to this. For example, if both of a team’s cars were to retire from the race early, then it is unlikely that the logos on their car would be seen for the rest of the race. This then links to factors such as how much airtime each team receives, as Mercedes may get more airtime than Haas for example. However, if you sponsor Formula 1 itself, you are likely to receive a more guaranteed amount of coverage, as cars will be going past your banner each lap – no matter who crashes out during the race.
Formula 1 can also increase the amount of coverage its sponsors get during the race with the use of on-screen graphics. For example, the ‘battle forecasts’ which are powered by AWS. This puts the AWS brand in a prominent position on the TV screen and is something which the team’s themselves cannot offer their sponsors, as they have no control over the TV coverage. This helps to emphasize a bonus that comes with sponsoring Formula 1 itself.
Interacting With Fans
Product and service endorsement is another aspect to consider. Not only was this shown in the data from the investigation, but by numerous academics who also state that endorsements can play a big role in boosting the effectiveness of advertising campaigns, as they can help to increase brand recall and loyalty.
It’s important to examine the role a team itself can play too. For example, over half the respondents stated that the more a Formula 1 team engages with its fans, the more likely they are to purchase products/services from its sponsors. The trick is working out what the best ways are for a team to engage with its fans. Luckily, this was also investigated during the survey. An array of various engagement methods were listed for the respondents to select which they believe is the best way for a team to engage with them as a fan. The most popular was holding regular online Q&A sessions, which was followed by replying to comments from fans on its social media channels. Again, this just goes to show the popularity of fan interaction from teams. Holding Q&A sessions with drivers will also give fans the opportunity to get closer to their idol drivers, which could then increase the effects of product endorsements and help to drive sales for the team’s sponsors products and services. It could be argued that different methods should be used to attract different types of fans though, so a mixed approach could prove to be beneficial.
But what can a team do to help further promote its sponsors? According to the respondents, giving out product/service samples to fans during Grand Prix weekends is actually more important to them than the teams and drivers using it themselves. In fact, the data even showed that fans think product /service samples is even better than a brand having visible advertising on an F1 car.
It is also necessary for a potential sponsor to consider merchandise arrangements too. For example, the majority of F1 team merchandise does have their sponsor’s logos applied. Whereas Formula 1’s own branded merchandise only has the F1 logo on it, and not its sponsor’s logos. This means that team sponsors can gain extra awareness and be associated with Formula 1 away from the track e.g., when a fan wears a McLaren jacket in the highstreet, people can see the Dell logo and associate it with the McLaren team. But this would not be possible if Dell were to sponsor Formula 1 itself..
So, Does F1 Sponsorship Work?
A key reason that brands become sponsors within Formula 1 is to make use of the emotional relationship fans have with the sport; thus, making them more likely to purchase their products and services. This helps to justify why some brands are able to charge a premium price for their products.
Hackett produces premium quality clothing, but their association with high-profile individuals and brands – such as Aston Martin, allow consumers to develop an emotional connection with the brand, which can strongly motivate them to purchase their clothing. Red Bull energy drink may taste similar to others in the market, but it’s their association with elite athletes that consumers have an emotional connection with that helps to elevate the brand’s superiority above its competitors.
Sponsorship within Formula 1 affects brand engagement in a wide variety of ways. These days, sponsors want to show fans that they actually contribute to the spectacle of the sport – not just put their logos on cars and banners. For example, DHL is Formula 1’s logistics partner. This helps fans to think ‘if they are good enough to transport Formula 1’s freight from race to race, then they will be good enough to deliver my parcel’. Or ‘if BWT provides the water in the paddock, then it will be good enough for my office’. Sponsors want to be an integral part of the sport, and to use Formula 1 as a way to demonstrate the superiority of their product or service on a global scale.
An important thing to remember is that Formula 1 gives brands the opportunity to connect with consumers in ways that other forms of marketing just cannot. Formula 1 fans are extremely passionate about their sport. If sponsors can strike an emotional connection with them, then this could help make the fans advocates of their brand too. This can lead to a positive impact on sales figures, as well as lessen the effectives of their competitor’s marketing activities. Sponsorship and brand engagement is a complex topic, but I hope this blog has served as a good introduction into this area of commercialism within the motorsport industry.
About the Author, Lewis Hallett
Lewis Hallett is a motorsport content specialist and F1 fan. This research was conducted as part of his BA (Hons) Degree in Marketing with Sport.
Lewis has been a moderator and contributor on Formula 1’s official fan research platform, F1 Fan Voice since 2018 and also writes the official race reports.
A lifelong fan of F1, you’ll mostly see Lewis in Aston Martin Cognizant colours.