we want to be in Formula One but we don't know what we want to get out of it. The brands that to do with well and are able to eke out that value from their sponsorship are the ones that go in with clear goals and are able to understand how they do it going to measure them.
MA: Maybe that's true of small family owned businesses but of the 200 businesses that make up the paddock and contribute about 7% of the global GDP, they simply can’t go spending shareholders money without clear rationale.
PC: There is a big distinction to be made between F1 and the rest of motorsports. F1 has its own rules, values etc. but there is a paper from Jensen and Cobbs, 2014 who has developed a model on Return on Investment in Formula 1 – it goes through the mathematics, financing etc. but at the end it says most of the F1 sponsors spend more money than what they have made out of the sponsorship.
What I always say to prospective sponsors is the key word “NETWORKING”. I promise you, you're going to have a stage and have 3 days of undivided attention for your peers or from potential client or supplier and in an emotional environment you are going to be able to talk about business and in the end this was for me the main reasons why people should get into motorsport.
DC: For me quantity is important but also it depends on the value of what I'm selling so it's not a tangible object. It is an experience that I'm selling. I’ve noticed that more people are interested in top of the line items – things that are priced similarly to paddock club in the $4000+ range or just General Admission; there's been a drop off in the middle at least at the Circuit of the Americas for me personally. That's something very interesting and I think it's just difficult to measure ROI on a passion experience which is why you see a lot of people do experiential marketing which is great but you can't always measure every return on people's experiences. In fact, it is something I'm interested in studying a lot more because I’ve been watching it for a while now and clearly there are several businesses set up for the purposes of measuring ROI in these sports so it's very interesting for me.
CJ: There is some really interesting stuff particular to F1 that comes out Repucom and Nigel Geach. One of the interesting things we talked about when I launched Chicane, we talked about attitudes toward the brand. It is fairly likely that in a B2C situation that a F1 fan is more likely to buy a F1 sponsors’ brand than a non-sponsor but more importantly it doesn't happen in other sports. There is an interesting company called YOTA that has a lot of interesting technology but no-one knows about them. Formula 1 is their way of getting everyone to see that they are global, not just Russian. So although it may not lead to more sales, it does a lot to change attitudes and awareness towards their brand.
Qualcomm is another really good case study because they are involved in two series (FormulaE and now Formula1). Why did they feel the need to get involved in F1? Principally because they wanted to activate in key markets and they wanted to globalise what they do so as to not stay too niche.