In Formula1, Marketing Sportivo, Sports Marketing

What is Formula 1? And why all the questions?

Formula 1 is the pinnacle of 4-wheel racing and the biggest series in motorsport. It’s a global sport, loved by millions, but also an important R&D platform for manufactures and brands to develop the tech we will see on the road in the future.

For this exact reason, it’s an ever-changing, forward-looking sport that’s continuously evolving. Just as cars get faster and faster, regulations get tighter and tighter to keep the competition as close as possibile.Ultimately, it’s an exciting, super-popular sport with a very complex background and a huge industry that’s moving behind the scenes. While the basic idea may look extremely simple (it’s auto racing, at the end of the day), it may take some time to get used to all the nuances and to understand the fine detail that’s making or breaking a team or a driver’s day and career.

So, what is this? Why this article? As a motorsport marketing agency specializing in Formula 1 sponsorship, as well as MotoGP and Formula E, we get dozens and dozens of questions about F1 and how the sport is evolving and growing. We thought we’d try and give all these an honest, non-biased answer. We really hope it’s the beginning of an interesting conversation and, hopefully, a way to quench your F1 thirst.

So whether you’re a Formula 1 sponsor, a racer, a fan or a casual spectator, make sure you send your F1 questions at info@rtrsports.com or reach out via our social media channels. Time to get started.

What is the cost of advertising on a Formula 1 racing car?

The cost of advertising in Formula 1, and advertising on a specific F1 Car, is difficult to establish.

There is not a fixed price list, and each team is different; all the sponsorship packages, are in fact bespoke. So, the only way to get to know it is to ask for a specific proposal. We can say though, that the minimum entry fee in order to do something meaningful is around 250/300k for the smallest programs with marketing rights but no visibility on the cars, and not with the top teams.

How do sponsors of Formula One race teams measure ROI

Roi measurement is a very interesting concept.

You can measure the ROI against commercial objectives, change of Brand perception, or visibility just to name a few. eg how much would I have spent to buy the same amount of ads visibility within these tv programs? The teams generally provide the sponsor several reports over the season with seconds of TV visibility, social media engagement, Press cuttings and a summary of the most relevant pieces of content in those areas.

How do Formula 1 teams make money?

F1 Teams make money in different ways.

First and foremost, in August 2020 the teams have signed the new Concorde Agreement that establish the way in which Liberty Media (the F1 owner) remunerates them. The terms of the agreement are strictly confidential, but some info become available.

Teams are not all the same; the ones that finished in the top three in the last ten years can get a special prize, a 20% percentage of revenues Liberty makes above 650Million Dollar.

Ferrari, Mercedes, Red Bull, McLaren, Renault and Williams are part of the club. What is left of that 20% after these teams are paid is divided by the others according to a sliding scale of around 1% based on the ranking in the championship with the champion that should get 14% of the prize money and the last team 6%.

And then there are the sponsorship deals; every team is supported by their sponsors throughout the seasons. Deals can vary based on the fame, results, and drivers. The more a team wins the more sponsors pay to be part of it.

Is it possible to get a free sponsor in F1?

The closest thing to free sponsorship that you can get in F1 is a Barter Deal.

Instead of paying in cash you can offer your products or services if they are needed and if they are of great value.

Are Formula 1 championship races scripted or fixed?

F1 Races are never fixed or scripted, team orders though can give the impression that there is an external will to fix results but when it is done it is done by a single team in an uncoordinated fashion so it doesn’t impact on the championship as a whole. (non capisco cosa Riccardo voglia dire)

Why brands like Ford and GM do not take part in Formula 1?

There is actually no right answer to this question. Car manufacturers decide how to invest their marketing, communication and R&D budgets as they like, and everyone has got its own priorities.

Maybe with F1 popularity skyrocketing in the USA even GM and Ford will be lured into it.

How does F1 make its huge profits?

F1 has fundamentally four stream revenues which are:

TV Rights, Fee received from race promoters to host the events, Paddock Club tickets and sponsorship. In 2021 F1 is back to profit. The previous year (2020), signed by the pandemic, resulted in a loss of 115Million Dollars

Why aren’t there any Indian drivers in Formula 1 racing?

F1 is the pinnacle of motorsport, in order to get into F1 a driver must follow a long formative process starting from karting and progressing in several categories.

Historically Europe has always been the golden continent of motorsport. An array of national championship and plenty of young drivers made it possible to discover and nurture young talent. Probably in India the motorsports movement is not as mature as in other countries hence the difficulty for Indian drivers to emerge. Having said that few years ago, between 2005 and 2011, India had not one, but two drivers, on the tracks: Narain Karthikeyan and Karun Chandhok.

How big is Formula 1 racing in the US?

Historically the US have not been an easy market for F1.

Races have been held in various cities and tracks, from Long Beach to Las Vegas, from Indianapolis to Austin without winning the heart of American fans. It has to be said though that in the last few years thanks to a more marketing and social media-oriented policy, Liberty media is succeeding in making the series more and more popular in the US. Drive to Survive, a Netflix series based on F1 is working wonders and in 2022 F1 will add Miami among its Gps.

Where are the Formula 1 teams based?

Most of the F1 teams are based in the UK, the only exceptions are Ferrari and Alpha Tauri which are in Italy and Alfa Romeo Team Sauber in Switzerland.

Why were tobacco companies heavily sponsoring motor sports?

Tobacco producers have been sponsoring Motorsports heavily because of the intrinsic capability of motorsport of reaching huge worldwide transversal audiences leveraging on the passion for these sports.

Starting from the sixties various laws limited the possibility, for tobacco producer, to sponsor sports and around the beginning of the year 2000 most government forbid this possibility. This category has been largely substituted by energy drinks first and everything crypto lately.

What is the business model of Formula 1?

Formula 1 is one of the most popular sports in the world. The championship represents the only promotional mobile platform a company can use to communicate to a worldwide audience. Opposite to the Olympics or the World Cup, held every 4 years, every year F1 touches all the continents (23 races in 2022). This characteristic makes F1 very popular among big companies (hence its sponsorship) which is one of the sources of revenue, the others are hospitality, promoter’s fees and tv rights

Is Formula 1 Racing a popular sport in Great Britain?

F1 is one of the most popular sports in Great Britain. It can be said that it has the same standing of football, rugby, cricket and horse racing. Most of the teams are based in UK and Oxfordshire is for F1 what the Sylicon Valley is for high tech.

How do Formula 1 track owners make money?

A track that is used by F1 makes money selling tickets.

The track/promoter pays a fee to F1 in order to have the privilege to organize the race and then sells tickets to make money.

A F1 race builds plenty of awareness, we say that it puts the race/Nation on the map giving huge visibility, so it is not uncommon that the promoters receive support from the hosting nations.

How much are tickets to the US Grand Prix?

Tickets for the 2022 Miami Grand Prix are already sold out while the tickets for the United States Grand prix at the circuit of the Americas in Austin start at 210 Dollars for general admission till over 3000 Dollars for the most prestigious packages

How long is an F1 race?

A formula 1 race length is minimum 305Km (with the exception of Monaco) and cannot last longer than 2 Hours

Why does Red Bull run two F1 racing team?

Red Bull runs two team for a series of reasons. The first one is the possibility to keep and test young drivers employing them in the “junior team” Red Bull uses another of its brand on the formerly known toro Rosso that has been renamed Alpha Tauri after their fashion operation.

Is Formula One really a sport?

Formula one is a great sport that combines drivers, that are athletes you can compare in terms of fitness to Olympians, to superb technical engineering and strategic proves.

Why doesn’t Ford have an F1 team?

Ford evidently doesn’t think that the required investment would be beneficial for its brands Ford, Lincoln and Troller

What should a new F1 fan know about F1 before following it?

A fan can start with reading about the teams and the drivers, then some info about the technical and sporting rules. F1 can be a bit complicated and needs some knowhow in order to be fully appreciated. A look into some of the icon drivers of the past will not harm as well (Senna, Villeneuve, Mansell, Schumacher to begin with)

How many people work on a Formula 1 team (Scuderia)?

The size of a F1 Team varies enormously, you can go from little over 200 of Haas to the over 1000 of Ferrari. Generally, a F1 Team employs between 600 and 900 people.

Why is it that the same racers always win in Formula 1?

Almost all the drivers competing in F1 have the skills to be very fast and potentially win races, some of them are exceptionally good and consistently at the top….and when you are there the best Teams will offer you the best car. It is a combination of skills and right machinery. But F1 is not the only sport that has this pattern, if you think at tennis for example in the last 10 years the big three (Djokovic, Federer and Nadal) have almost always won the grand slams with few exceptions (Murray, Wawrinka, Cilic, Thiem, Medvedev)

How popular is F1 in the United States?

F1 has never been so popular in the United States as it is now.

Traditionally the American petrolheads have been very fond of Indycar and Nascar but in the last few years F1 id becoming increasingly popular with the 2021 Season registering an average of 934.000 viewers per race on ESPN a fat increase of 54% over the previous year.

2020 was a good year as well since it grew 39% over 2019 recording an average of 670.000 viewers per race. So F1 is on the right trajectory in the States and with Andretti Autosport entering the Championship in 2024 we can predict a further jump in popularity.

What do Formula 1 drivers do between races?

The F1 Calendar counts in 2022, 23 races, the schedule of a driver is extremely tight.

Time is the most valued thing for people and probably even more so for a F1 Drover.

If you consider the days spent at the tracks, the travels and the promotional days used by sponsors and partners there is very little left.

Drivers tend to “steal” some free days for short breaks when the schedule consents it but nonetheless they have to keep exercising in order to keep fit and be in the best possible physical and psychological condition for the next race…. So, to be a F1 driver is hard work.

What are the aims of the Formula 1 championships?

F1 is a highly sophisticated and glamorous sport. It is a mobile promotional platform that gives to car makers and sponsors the possibility to communicate all over the world with a single programme.

Every year the championship touches the biggest markets in the world, giving the opportunity to run hospitality and PR operations, promotional activities and so on.

Moreover, F1 is a great R&D exercise to test new technologies, the best engineers compete to better the best and every year they manage to improve on the previous one. So, it is a complete package that makes sense for big industries wishing to engage a worldwide audience.

Will BMW ever take part in F1?

Nobody but BMW knows if they will ever re-enter F1.

in the Turbo Era BMW produced some of the most powerful and victorious engine ever. It would be good to welcome back BMW in F1 especially now that even Porsche and others Volkswagen’s brand are rumoured to be coming back into F1

What is the most prestigious F1 race?

it is difficult to say which race is, amongst them all the most prestigious one. F1 purists probably will go for SPA Francoschamps, Monza could be well high on the list but if I had to name a name I’d go for Monaco where the street circuit, allure and Glamour makes the event truly unique.

Why doesn’t Porsche take part in F1 races?

It is rumoured that Porsche is talking with RedBull to enter F1, in the meantime Porsche competes in the Electric series for single seaters Formula E

Silvia Schweiger
Silvia Schweiger
Sport has always been my passion and I was lucky enough to be able to make it my job too. Graduated in Foreign Languages and Literatures, with a Master in Marketing and Communication, for 20 years I have been offering consultancy to companies wishing to use sport as a marketing and communication tool to better engage with their target and reach their objectives. Without sport, life is boring.
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