We are joined by Chief Strategy Officer at Synergy Sponsorship, Carsten Thode, to catch up on the updates of this interesting market.
As an agency, we’re constantly trying to move forward: coming up with bigger ideas, being more creative, creating campaigns that are more integrated and using new technologies to connect with fans. So there is nothing specific that is “completely new” for us in 2015, but we have definitely made huge progress along each of those dimensions over the past few years. Ultimately, I think that’s why we just won the title of “Sports Agency of the Year” at the recent Sports Industry Awards – because all of those marginal gains have added up to something really meaningful.
Without question, the biggest game-changer for sports sponsorship has been social media. Up until then, the consumption of sport, and therefore sponsorship, followed a “broadcast” model with a one-way flow of communication. Social media has turned that model on its head. Fans now not only consume but they are active participants in the universe around the sport they love. Sponsors can participate in that universe as well, which gives them a far richer and deeper way of engaging with the audience they are trying to reach. We are constantly finding new ways for our clients to participate in that world, whether that is with real-time content or new platforms, and we are only just scratching the surface.
The sport is clearly not evolving fast enough. The millennial generation has a completely different perspective on what it means to be a fan.
Unlike many agencies in the Paddock, only about 10% of our business is in motorsport, so we have a pretty good perspective on how it compares to other areas. Ironically, I think that the biggest challenge that Formula 1 presents is also its biggest strength: its global scale. With so many countries to cover and such a short time in each country, it is really difficult (and/or really expensive) to land a truly integrated campaign with a single big idea that is communicated effectively around the world. But we feel like we have managed to make significant progress with Martini on that front so it is possible!
From a sporting perspective, Formula 1 is constantly evolving and will continue to do so. There is no doubt that this means that from a technical/engineering/performance perspective, it is absolutely on the cutting edge in many ways.
However, in other ways, the sport is clearly not evolving fast enough. The millennial generation has a completely different perspective on what it means to be a fan. When we look at sports like UFC, cross-fit and the e-sports phenomenon, we can already see glimpses of how the way we watch, play and belong to fan communities is evolving. What happens on the field of play is only one component of what drives fan engagement. They also crave a deep connection with sports that helps them to connect with it. For Formula 1 that means being more open to new communications channels, becoming more transparent and being more flexible with the way in which IP is controlled. I don’t think Formula 1 is moving fast enough towards this openness, even though most teams and sponsors we speak to recognise that it needs to happen.
I am really hopeful that Formula 1 will move towards this more open and flexible model, which will allow brands to be a bit more creative with their activation. In particular, that will result in brands moving away from the traditional activation channels like media exposure and corporate hospitality towards more digital channels. There is no doubt that everyone would benefit from that shift.
From a team perspective, the focus has to be on creating a sustainable model for delivering value to sponsors that isn’t dependent on their performance on the track. The key driver on that front will be data: teams and sponsors will need to work together to collect, analyse and monetise customer data more effectively.
It will be incredibly interesting to see how a series like Formula E develops, because it definitely has tried to tap into this millennial culture. The electric powertrains and city centre races are right on the money for this audience while the FanBoost is a great example of how fans can be more involved in the whole experience. And there is no doubt that some pretty powerful sponsors have been convinced of the sport’s potential.
However, it all comes down to fan numbers because that will always be what sponsors are after. And fans will always be most interested in what they perceive to be the pinnacle of the sport. If Formula E ever takes that mantle with the best drivers, engineers and technology, then that would be a real problem for Formula 1.