Formula E: sponsorships, business and the future

The exponential growth of FIA full electric series is a significant signal given at both sport and sponsorship level to all professional championships and leagues, as well as to anyone engaged in sports marketing. If you wish to go big, now is the right time to start thinking about the future of sport disciplines and the business opportunities that go with them.

No coincidence that Formula E has catalysed the attention of manufacturers, investors, sponsors and stakeholders quite rapidly, taking the role of the “next big thing” of sponsorship in motor and other sports. We cannot – and should not – forget that motor sport championships are not merely sports events, but they basically are marketing exercises and R&D platforms for car and bike makers. MotoGP, Formula 1, Formula E and similar sports are the tools manufacturers use to show the audience their strength and to develop the technologies they will mount on the cars and motor bikes of the future.

Formula E and car makers

If we start from the viewpoint above, the reason why Formula E has become so much appreciated by manufacturers is self-evident: electric mobility is the future of the mass automotive industry and the present of R&D initiatives undertaken by car makers. On the other hand, gasoline and combustion engines, which still bring along the charm of the times now gone, have a small growth margin in the minds of designers, who are asked by investors to work keeping an eye on environmental and sustainability issues. In this context, it is no surprise that Mercedes top management have been questioning the future presence of the Stuttgart starred racing car in the Formula 1 championship and they are ready to commit to a strong and long-lasting relationship with Formula E.

Formula E and sponsors

If the point of view of manufacturers is no surprise, the huge attention sponsors and potential investors are paying to Formula E is quite impressive and this is the true signal denoting the excellent condition of this championship.

As was mentioned on other occasions in the pages of this blog, businesses may have many good reasons to be eager to sponsor Formula E: environmental sustainability, the possibility to target fans in the city centres where the races are run, the international flavour of the Championship and, last but not least, the opportunity to liaise with top leading manufacturers and sponsors.

On the one hand, this signal gives good hope for the future of this series. On the other – which is more important – it should lead to general considerations about the role and the future of sports sponsorship and sports marketing.

Sponsorships, Formula E and industry state of the art

Formula E sponsorship offer the sponsorship industry a significant signal, which should not be ignored. In the past few years we have often heard about “industry crisis”, “resource downsizing” and businesses generally lacking confidence in sports. Formula E is one of many examples we could draw that clearly show one important truth: businesses are still willing to pay attention to and invest their resources in areas where proposals, values, the future horizon and the people involved are worth it.

The arguments on automotive makers we have addressed in the previous lines essentially apply to sports sponsorships too. If it is a marketing exercise, then such exercise must necessarily have ingredients and systems of values capable of driving brands (and customers) over to the future. In a context where businesses have hundreds of communication strategies at hand, finding money for sponsorships without being able to offer a counterpart that is up to the current market is far from being credible.

Let’s look at the issue from another standpoint. If customers, public attention and the market have changed, then the motivations and methodologies underlying sponsorships must change too. This opens up a new chapter in this story that may take pages and pages to write, if you are willing to investigate all possible facets. I am afraid this is not the right place for long, theoretical and conceptual discussions. However, it is worth making just a couple of observations for the sake of exemplification.

In the past, visibility – especially on TV networks – was the focus of any good sponsorship programme. The more important was brand exposure and the longer the time on screen, the greater was brand visibility, hence the greater were the satisfaction and the returns for the sponsor company. Evidently enough for people involved in this business, the situation has radically changed in our days. Visibility is still important, of course, but pollution of customers’ and consumers’ viewing time by visual, media and commercial overcrowding has definitely affected the sponsorship logics. Where there once was ten channels, now there is one thousand. Where there once was one sport newspaper, now there are thousand magazines and over fragmentation of specialized news organizations. This goes without mentioning the role of the Internet, of course.

The visibility offered by sports sponsorships in modern times has been replaced by the need for brands to be linked to disciplines, causes and events with which they share values and an overlook to the future, which is the foundation for a homogeneous and effective communication strategy. Businesses are now – fairly enough – under the pressure of consumers and trade associations who are asking them to stand up for positive values such as sustainability, equality and respect. Needless to say, it is essential for sponsorship logics too to adapt to this new scenario.

Sponsorship and Formula E: electric vehicles and a new form of communication

Let’s take a step back to the electric four-wheeler championship. Businesses are now evidently interested in some key issues that are essential to any communication strategy: the need to get connected to environmental sustainability topics, the need to build ties with disciplines having a highly advanced technical level, the need for global communication on several markets at the same time, and, last but not least, the need to have a large number of high ranking interlocutors such as big automotive industries and big brands (and their respective consumers). Ironically, which is probably the most astonishing point, the commercial and business driving force this championship is exerting is probably greater than its strength as a sport discipline. Formula E is on a steady growth pattern, but it would be wrong to say that it has superseded, at least sport-wise, historical series such as F1 and the other popular racing competitions that the fans love.

This is yet another interesting point for people involved in sports marketing. Perhaps, for the first time ever in the history of the sponsorship industry, this discipline has a business and communication power far beyond its importance and interest as a sport. We may say that before being a great sport, Formula E is a great communication and networking opportunity for all its interlocutors, both insiders and outsiders.

Sponsorship costs in Formula E

As the above-illustrated context suggests, the sponsorship costs in Formula E are in line with what you may expect sitting at a prestigious negotiation table. Although they are still far from the costs in Formula 1, sponsorship packages in Formula E have largely exceeded the costs in MotoGP and many other motor and non motor sports. Although our intention here is not to give precise figures, entry level packages in Formula E amount to around 300-400,000 € per year. These figures are bound to rise to several million Euro if hospitalities, extensive communication support, large facilities for brand exposure and so on are included.

As explained above, by paying these amounts the sponsors have at hand stunning communication assets, and, what is more important, they become partners of world-renowned groups such as Audi, Porsche, BMW and so on, which gives them access to equally prestigious brands with the related business opportunities. Have a glance at the outlook of the team sponsors to understand the level of the brands at stake.

If you wish to receive information or have any request concerning sponsorships in Formula E and in the other major motor sports championships, please contact us at: info@rtrsports.com or through our website rtrsports.com/en

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