As news broke last week that Formula One will add another US race to the calendar from 2023 – the Las Vegas Grand Prix – any doubts around the growth plans for the sport in North America could be firmly placed to one side. Miami is the most talked about race on the 2022 calendar and there’s little doubt that Las Vegas will attract the same level of attention, if not more, with its Saturday night race slot, next year.
I’ve previously written about the shifting dynamics for F1 in the US and why Formula 1 has become such a popular sport for fans and brands alike. Another interesting trend is why technology brands in particular have identified the sport.
Why is it F1 attracting so many technology brands?
Formula One represents a strong sponsorship proposition as more brands seek to develop truly integrated partnerships, playing a crucial role in research and development that delivers a mutual benefit for company and team alike. This is particularly valuable in a sport where a hundredth of a second can be the difference between winning and losing.
The motorsport provides an authentic and direct role for technology brands to play in the performance of the teams with which they partner. In return, F1 offers an unparalleled global platform to communicate the role that partner products can play in the most competitive, intricate, and high-pressured sport on the planet
While some brands may be considered ‘small’ compared to what Formula One has seen before, and if their financial investments in any partnership may seem modest, they have found a way to add value to a team and vice versa in other ways. For brands, it means access to state-of-the-art team facilities, an ideal testing ground for new products and solutions. For teams, these deals provide access to value-in-kind support and field experts. The result? Formula One sponsorship deals are now more agile and tailored to individual brand and team needs.
The storytelling opportunity is real, too, driving scale beyond traditional hospitality programmes. Where lifestyle and consumer brands often find authentic storytelling opportunities to be more limited, true integration stories provide a much clearer product or solution endorsement. This is an area where Formula One’s clout and technical prowess sets it apart from the US-based racing series and other global sports, where innovation is less prominent.
Why the US in particular?
Beyond the fact that many of these up-and-coming tech brands are headquartered in the States, it’s Formula One’s history and presence outside of that market that enhances its appeal. As mentioned, the increase in popularity of the sport in the domestic market provides reassurance, but the real value is how Formula One is able to offer US brands a chance to reach the rest of world and unlock new revenue streams.
These are the audiences that the brands will target, driving mass awareness outside of the US with on-car or driver branding, and engaging and educating consumers through their storytelling. Formula One’s global fanbase (projected to reach one billion by April 2022, research suggests) and its nine-month, 23-race calendar provides unrivalled access to consumers, partners, and networking opportunities throughout the year.
What does it take to create a successful technical or integrated technology partnership?
Integrated partnerships are arguably the most valuable and effective partnerships when undertaken with the following golden rules in mind:
Long-term vision
Both parties need to understand the long-term vision for the partnership before any deal is signed. Both the The rights-holder and the partner need to believe in the relationship, the benefits it can bring and be prepared to approach it in a collaborative way – sharing ideas and ultimately embracing the mutually beneficial aspects of the agreement.
Patience and commitment
The reality is that any deal that involves integrating a new solution or technology within a Formula 1 team requires patience. Unless the team has been using that technology all along, product tests will need to be undertaken before any true product integration plan can even be considered. While the long-term vision may be there, there also has to be an understanding that the performance of the team cannot be compromised, so patience and commitment are needed, especially in year one.
Resource
It may sound obvious, but resource – both in terms of people and time, as well as budget is often overlooked or underestimated. While the up-front investment in a deal is one thing, the activation investment – whether it’s a suite of social media assets, guest hospitality programs, PR appearances or sales initiatives – needs to be factored in before any deal is finalised. Ensuring there’s an internal point-person for the partnership with access to the right internal network and the autonomy to make certain decisions, coupled with sufficient resource internally to manage product integration and optimisation, is crucial.
Formula One has undoubtedly evolved with the times; the cars and calendar have developed over the years and the face of sponsorship in the sport has also changed. As the sport continues to grow its fanbase stateside, expect to see more US names enter the mix through strategic integrated deals. The sponsors that succeed will be those that can strike a truly collaborative and innovative relationship with their respective rights-holders, extracting the maximum from their investment and paving the way for long-term partnerships in a sport where technology plays an increasingly important role.