In Formula 1, Formula1

Sports sponsorship, and especially motorsport sponsorship, is a flexible, three-dimensional marketing tool, whose role over the years has changed profoundly as the market, consumer and regulatory changes. From the early years based on pure visibility to the present days of the expansion of decentralized finance, sponsorships and partnerships have evolved tremendously. Telling the story means telling the story of the evolution of sports marketing as a whole, but also, and more importantly, predicting its upcoming trajectories and the future ahead.

One of the first sponsorships in the history of Formula 1 most likely dates back to 1968 when, during the South African Grand Prix, a team  Brabham’s private race car driven by John Love took to the track in the colors of the Gunston cigarette brand.

It was a particularly sensible but at the same time very forward-looking combination. John Love, racing driver and team owner came from nearby Rhodesia (present-day Zimbabwe, part of the British Commonwealth until 1979), while Gunston manufactured and sold his own tobaccos in South Africa. Around the track, several posters immortalized the roaring machine against the backdrop of a large pack of cigarettes. The claim, a rhyming pun, read Men rate Gunston great.

Much has changed since that day in South Africa. Still, well over half a century later, today’s Formula 1 cars race around the world’s circuits with liveries colored in sponsor hues and decorated with all kinds of brand names and logos. This is an obvious consideration, but it is also important as it leads us to a twofold result. The first is that the sports sponsorship works , and it is a powerful, recognized and reliable marketing tool. The second is that, according to syllogism, if sports sponsorship has withstood the passage of time but the world has changed, then necessarily the way of doing sponsorship will have to have changed.

The 4 eras of sports sponsorship

To clear the air immediately, it is necessary to clarify that all companies, from Gunston to the present day, sponsor to sell more. Simplifying further, every for-profit enterprise of any kind in the world has as its ultimate goal to impact the bottom line and sell more product than it sold yesterday or sell it at a more expensive price.

However, the concept of sales is, despite the rather universal understanding of the basic idea, very multifaceted and constantly and frantically evolving. Today’s businesses are faced with more saturated markets, rampant globalization, more knowledgeable consumers, more regulated working conditions, and a crowded media arena in which Gunston’s cherished manifesto by itself can no longer do anything. If sales changes, marketing changes. If marketing changes, so does sports marketing. Basically, how do you get from a packet of cigarettes to Web3.0? How do you go from an orange livery to an NFT? How have the motorsports industry, the related marketing activities and the sponsorship opportunities changed to adapt to the current time?

In this long-term view we like to identify 4 historical moments of sports sponsorship in motorsport. Four eras of sponsorship that differ in mode but not in purpose, and that necessarily have much more sketchy and less clear-cut boundaries than can be detailed in the following lines. The 4 eras we identify are as follows:

  1. The era of Exposure
  2. The era of Proof of Concept
  3. The Age of Engagement
  4. The Age of Digital Monetization

Before going into more details, it is good to make a clarification. Actually, two.

The first clarification is that we are not academics. This is our view of the world of sponsorship drawn from our experience in the field and our knowledge of it. There is certainly someone at some university who can provide a more rigorous observation, better argued and with extensive supporting bibliography. Our purpose is not to replace the academy, but rather to provide the practitioner’s point of view. As such, any comments, corrections, and additions to these pages are not only welcome but also encouraged.

The second clarification is that knowing the past and reflecting on the present is, in every field, a way of attempting to understand the future, and this is not merely a theoretical roil. Sports marketing and sponsorship professionals have a duty not only to handle the discipline, but also to orient it and especially present it to clients and sports properties in a way that brings value tomorrow as much as today.

The era of Exposure

The early age of sports and motorsports sponsorship coincides with a need for corporate awareness. Quoting from the dictionary, we define awareness as “the degree to which a brand, product, or advertising campaign spreads at the level of knowledge and notoriety.”

A brand’s first need, often, is to make its brand known to as many people as possible, in the hope that they will become customers or can increase their purchasing rate (how often they buy). I, a customer, cannot buy or try to buy a specific product if I do not know that the specific product exists.

However, this need is found to change as time progresses when competition within the same product category begins to grow and more products with the same purpose or promise were born. The question turns from “how do I make my product known” to “how do I make my customer think of my brand when confronted with a multiplicity of equivalent products.” This is where the concept of top of mind comes in, which is -to simplify- the most desired evolution of awareness.

To both of these issues, origin companies respond with exposure, that is, with a series of actions that aim to put their brand and product in the limelight as much as possible. In this, sports sponsorship proves to be a very powerful tool. Sports, with a passionate and vast following, is the perfect canvas on which to post one’s logo and name, and to paint in one’s brand colours.

It is the great insight of Gunston cigarettes and in short of the entire tobacco industry, which blocked by restrictions on traditional advertising, is looking for a way to reach the mass of consumers. Motorsport is, not surprisingly, the perfect medium, and cars and motorcycles roaring at great speed driven by danger-scorned riders the ideal medium. Speed is masculine, courageous, fascinating, rebellious just like the world to which cigarettes and shreds refer.

Big sponsorships were born in the two- and four-wheelers that still color the dreams of many enthusiasts. There is Ayrton Senna‘s McLaren Marlboro, Schumacher ‘s Benetton Mild Seven , Valentino Rossi ‘s Yamaha Gauloises or Max Biaggi‘s Honda Camel. One could go on and on, from the Jordan Benson and Hedges to the daring two-tone BAR of a young Jacques Villeneuve who even attempted to make the two brands of Lucky Strike and British American Tobaccos’ 555 coexist: until the early 2000s, this was the dominant trend.

Large brands and large color backgrounds that had only one purpose: to end up before the eyes of as many people as possible without them being able to miss it.

The era of Proof of Concept

As tobacco and FMCG companies begin to manage and understand the extraordinary potential of Formula 1, MotoGP (still called 500cc at the time) and other motor racing, a small but growing section of highly specialized industries added another piece to the puzzle.

Oils, fuels, suspension manufacturer, and engine manufacturer sense that getting their brand seen is important, but tying it to the concept of performance is even better. Then again, if something is good enough for a motorcycle or racing car, then it will be excellent for everyday use vehicles. The era of proof-of-concept sponsorship, or the guarantee of goodness of a product or service, is coming, which will necessarily give way to technical sponsorships and the concept of a supplier or “supplier”.

From the mid-1970s onward, the brands of Goodyear, Agip, Magneti Marelli, and Champion began to appear with increasing frequency on the liveries of racing vehicles, promoting for the first time the technological side of the racing value system. Because sure, racing was manly, glamorous and synonymous with courage, but it was also-and the idea was beginning to take hold-a concentration of cutting-edge technology and mechanics. Being part of that world meant being able to promote one’s product as something excellent, which was transferred from the racetrack to the everyday street.

Technical sponsorship, as well as the era of proof-of-concept sponsorship, has never ended: the basic idea is so good that even today big brands such as Pirelli, Petronas and other global industry giants are enthusiastically and energetically aiming at it. Such and such is the strength of this union, between technical sponsors and racing, that these brands often transcend the boundaries of the circuits and become symbols of performance themselves. Overseas, the phenomenon of sponsorship stickers , sets of stickers with major OEM brands or spare parts that young people stick on their very ordinary cars to give them a more “racing” air, is beginning to develop.

Sponsorship has broken through the first barrier: from being an advertising tool, it has become an aspirational medium. This will open a new door to the world of sports marketing.

The era of engagement

In the early 2000s, the world facing advertisers and marketers around the world has changed dramatically. Shelves are overrun with equivalent products, radio and television broadcast advertisements on repeat, and consumers are faced with a surplus of goods and information messages never seen before. On the horizon slowly looms the silhouette of a new communication tool, the Internet , which will soon disrupt the way we do and see things.

Sports sponsorship and motorsports is facing a crossroads of difficult resolution. On the one hand, the awareness generated by televisions and media is a two-sided coin, tied closely to TV ratings that are beginning to suffer from the arrival of pay-per-view and plurality of offerings. On the other hand, technical sponsorship is limited to those industries that are closely related to the automotive world. Tobacco has rightly met its end in the racing world: authorities, first in Europe and then worldwide, have blocked the promotion of cigarettes and shreds by vetoing any form of sponsorship.

The answer, as is always the case, will come more organically than one might have suspected. New brands are appearing on the FMCG horizon, and they are set to change the rules of the game. These are brands dedicated to a young, nocturnal audience that reads few magazines and spends little time in front of the television. It is an audience that is uniquely informed by intra-generational rather than infra-generational patterns and practices experience-centered rather than possession-centered choices. An audience that must experience rather than see, that must experience rather than be told. It is the perfect audience for energy drinks.

Red Bull, Monster Energy, Rockstar are the opening convoy of a third era of sponsorship, that of engagement, which other industries will quickly align with.

The age of engagement is not just about showing a brand or saying how good a product is, but it aims to convey how a brand can make you feel. If the founding verb of the age of awareness was see, and learn that of the age of proof of concept, the age of engagement points to feel. The gentleman’s agreement, never signed but implied is “I will make you feel cool, energized, welcomed into a community, and you will buy me.” It is the golden age of grand sponsorship activations: events, concerts, themed parties, large skill contests, extraordinarily well-crafted merchandise, videos featuring stuntmen and often scantily clad girls that soon go viral but far from mainstream communication.

Sponsorship becomes a tool to engage, a starting point through which to try new experiences, a hand outstretched toward new experiential forms that tickle consumer behavior change. There is a lot of psychology behind this: brands focus on emotion and belonging, they associate buying with feeling.

The most savvy, again in this case energy drinks, are returning to even target models of grassroot sponsorship, going to fund from the bottom up young and very young athletes who are not yet famous, accompanying them on their path to success and carefully selecting the most adrenaline-pumping and “cool” sports. The brand definitely untangles itself from the product and becomes experience, community, pure emotion: on nights lit by colorful LEDs, while cars and motorcycles perform mind-boggling evolutions and DJs play loud music, thousands of young people dance around a logo with two red bulls ready to collide in a yellow circle. The miracle has finally happened: motorsport has sublimated into its purest essence, and the energy that is its distillate serves to unite companies and consumers.

The age of digital monetization

At the turn of the second decade of the 2000s, new technologies imposed new ways of relating, new ways of shopping, and new ways of doing business and creating value. Social media, already practically obsolete to the point that big names are leaving the scenes, has paved the way for a great granularity of consumption, experience, opinion, and education. Thomas Merton himself, who wrote in 1955 that “no man is an island,” would be surprised to see how one-to-one the entire communication machine has become and how the concept of community, so much touted only a decade earlier, is crumbling into an individualism that is first and foremost forma mentis.

The pandemic wave sweeping the planet from late 2019, forcing long lockdowns and isolations will radically change the habits of many. Computers, cell phones and television screens become the most important or often the only window to the world and the Internet becomes the tool with which to interact. Web3.0 changes perspectives on what was taken for granted until yesterday: cryptocurrencies undo the relationship with traditional banks and currencies, NFTs change the concept of ownership, and blockchains reshape the very idea of exchange.

What is the purpose, in this redefined scenario, of sponsorship in motorsport? The answer is as simple as it is fascinating: to speak to a new consumer audience that is with increasing force embracing the concept of a digital economy designed around the individual. It is the age of “digital monetization,” and dominating it are cryptocurrencies, NFTs and decentralized payment systems.

Formula 1 cars and MotoGP motorcycles become the place to formulate a modern business proposition: invest with me and on me, together we will both become richer and we will do it our way. However, why do the big names, Crypto.com, Velas, Tezos, Lunar and Binance among others choose the very best of motorsport for this meeting? The answer, once again, lies in the demographics of the viewership, which is very young, hyper-connected, utterly global and fascinated by the technologies that permeate the best of two and four wheels.

It is a whole new way of doing sponsorship, and these companies, led by very young people little involved in the ceremonial of traditional business, are not interested in the activations of the early part of the century, much less in simple visibility. MotoGP, Formula 1 and Formula E become a gateway to strengthen the shoulders of a new and growing economy. Properties also need to adapt to new tools and modes: these young players in the scene need little hospitality but great support to generate NFT, they want few newsletters but require fan tokens. It is the new world, and those who are not afraid to throw themselves into it headlong will see pharaonic deals come to the table.

The present and future of sponsorship in motorsport

As mentioned in the opening, these four segmentations of sponsorship in motorsport are not categorical, definitive, and least of all so regularly segmented. More, we believe, they should be understood as liquid models, permeating each other rather than replacing each other.

Bottom line: exposure and awareness, today as much as 70 years ago, remain important components of a good sponsorship plan. Today, as then, any customer would want his or her branding on this bike or that car to be a little bigger than how the sponsorship proposal presented it. Engagement and value system equivalence are as central today as they were then. But on their own they are no longer enough.

It is also evident, then, that these eras are not erasing the previous ones, but are neatly arranging one upon the other to give birth to an object of increasing complexity-but also of increasing potential. If good John Love’s sponsorship was a genius idea but also extremely simple (then again, all genius ideas are), sponsorship in motorsport today is a multi-layered, multi-faceted tool that must be manipulated with enthusiasm but awareness. To go to a decentralized payments company today and offer a sticker on a wing is to do a disservice to the industry, the discipline, and the sport itself.

Understanding the trajectories of the market and the world in which we move is our task if we are to give efficient answers to the companies that ask us, today, how to build their success tomorrow.

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Emanuele Venturoli
Emanuele Venturoli
A graduate in Public, Social and Political Communication from the University of Bologna, he has always been passionate about marketing, design and sport. Even before finishing his studies, he started working in sports marketing and discovered the importance of everything outside the playing field. Since 2012 he has been with RTR Sports, where he is now Head of Communication and Marketing Officer for projects related to Formula 1, MotoGP and the best of other two- and four-wheel motor sports.
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