In Formula 1, Formula1, Sport Sponsorship, Sports Marketing

Analyzing trends in motorsport sponsorship is a critical task for marketing professionals. It provides valuable insights into the ever-changing landscape of the industry and guides the decision-making process. Sponsorship deals in motorsport represent significant investments, and their trends can deeply impact the strategic planning of both teams/leagues and sponsoring brands. In essence, understanding these trends not only aids in optimizing return on investment but also enhances the effectiveness of marketing campaigns.

From long contracts to shorter contracts

One key trend in motorsport sponsorship is the shift towards shorter contract lengths. Traditionally, brands would commit to 5+ year deals, ensuring a long-term partnership. However, the landscape has seen a shift towards shorter, 1-2 year deals. This provides brands with more flexibility to adapt and respond to the changing market dynamics and fan preferences. However, it does bring an element of instability for teams and leagues who must consistently seek new partnerships.

Shorter deals allow brands to redirect budgets more nimbly, but make it difficult for teams to plan years ahead when funding is uncertain.

aston martin f1

All about digital

The emergence of tech/digital brands in motorsports represents another key trend. The influence of technology in every facet of our lives has seen digital brands expand into new marketing spaces, including motorsport. This trend brings new opportunities, such as harnessing the power of data and digital engagement, but also presents increased competition for traditional sponsors. The infusion of technology in motorsports, like the Mercedes-Benz collaboration with Dolby Laboratories for Dolby Atmos technology, underlines this trend.

As motorsports embrace advanced technologies like AI, VR, and big data analytics, it creates space for new tech partners while leaving behind brands who can’t adapt.

Activation Vs Brand Exposure

The shift towards activation versus just brand exposure is a crucial evolution in motorsports sponsorship. Today, brands seek deeper fan engagement through social media, experiential marketing, and content creation. The focus is no longer just on logo presence but on creating meaningful connections with fans. For example, successful sponsorship deals in 2023 go beyond mere awareness and prioritize facilitating connections between businesses and their target audiences. This trend gives brands a platform to creatively showcase products and engage customers, but also raises the stakes for teams to deliver ROI beyond logos on cars.

Sustainability

The growing emphasis on environmental sustainability is another trend impacting sponsorship deals. Motorsports, especially series like Formula E, have been heavily investing in eco-friendly initiatives. Sponsorship deals are evolving to reflect this, with brands increasingly aligning themselves with sustainable motorsports and leveraging these partnerships to showcase their own green initiatives. With climate change a rising concern worldwide, sponsors want to use racing deals to highlight eco-conscious practices and connect with environmentally-minded fans.

Formula 1 sponsorshipRising costs

Costs in motorsports sponsorship, particularly in Formula One, are rising exponentially. With the global motorsports market expected to reach $7.47 billion by 2028, the stakes are high.

The increasing costs of top deals have a significant impact on the sponsorship landscape, with only the most successful global brands able to secure these premium partnerships. For instance, Oracle recently signed a 5-year deal with Red Bull Racing for over $500 million. As prices skyrocket, many brands are priced out of top deals.

Taking examples from various motorsport series such as F1, MotoGP, Formula E, WEC, IndyCar, etc., the mentioned trends become evident. Deals in F1 reflect the shift towards big technology partners like Amazon Web Services joining the grid. MotoGP deals highlight the desire for content creation and fan experiences, like Monster Energy‘s kid zone activation. Formula E partnerships showcase sustainability initiatives promoting eco-values. Across top series, costs are rising and require greater activation by brands for value.

In conclusion

These trends have far-reaching implications for brands and teams/leagues. For brands, the shift towards activation and shorter contracts necessitates a more dynamic, responsive marketing strategy. Brands must focus on creating compelling narratives and meaningful fan engagements through content and experiences, not just logos. They must also build in flexibility to redirect budgets. For teams/leagues, adapting to this landscape means embracing digital capabilities, showcasing sustainability progress, and providing brands diverse activation opportunities. With costs rising, rights holders must clearly demonstrate tangible value beyond brand exposure.

Ultimately, successful partnerships in motorsport require creating value for all stakeholders – sponsors, teams, and most importantly, fans. In today’s landscape, that means brands engaging audiences through content and experiences, not just awareness. It means teams leveraging data, digital platforms and sustainability initiatives to attract partners. And it means putting fans at the heart of every activation. Brands that understand these evolving trends in motorsport sponsorship, and tailor partnerships accordingly, will be best positioned to maximize ROI while propelling the sport forward.

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Riccardo Tafà
Riccardo Tafà
Managing Director for RTR Sports, Riccardo graduated in law at the University of Bologna. He began his career in London in PR, then started working in two and four-wheelers. A brief move to Monaco followed before returning to Italy. There he founded RTR, first a consulting firm and then a sports marketing company which, eventually, he moved back to London.
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