2014 was a spectular motorsport season. The arrival of hybrid engines in F1, a thrilling duel between the Formula 1 world championship contenders Nico Rosberg and Lewis Hamilton, a spectacular WEC season which saw Porsche’s return and Toyota’s first triumph, and a brand new Formula entering the scene with 100 percent electric cars setting sail for a new era of racing. The SPONSORs Motorsport Summit 2014 at the sidelines of the Essen motorshow therefore promised to be an exciting event. Under the slogan ”The future of motorsport. Where are we heading?“, experts from the industry discussed trends and perspectives in an industry that is in a state of flux.
In Formula 1 there is a saying that goes, the end of the season is the beginning of the season. And with 20 races stretching from March until the end of November, there is indeed very little time to sit back and reflect. Although this year, maybe more then ever, there is a need to give thought to the future. The end of the ”silly season“ saw two teams bankrupt, a heated debate around engine regulations following the first year with new turbo hybrids, financial issues across the midfield, a crowd-funded team at the back, and a promoter who sees no value in marketing, despite a shrinking global community and empty ranks in Germany, traditionally home to one of the world’s most loyal F1 nations. The need to integrate efficiency and high performance into attractive sporting events that appeal to core fans as much as new target groups is a challenge that all racing series have to meet. Top-class speakers like Mercedes AMG Petronas boss Toto Wolff, Formula E Commercial Head Lars Stegelmann and reknown brand expert Frank Dopheide met in Essen to discuss the future of the industry and ways to inspire people in a time of change.
One of the big questions of the event was how to appeal to a new generation of motorsport fans. Today’s fans are different from the ones that cheered for Senna, Schumacher and Hakkinen in the early 90s. While Formula 1’s promoter insists that the sport doesn’t need young target groups and the likes of social media, the makers of the new Formula E series immediately discovered the potential of the so-called digital generation. „Story telling is becoming more and more important“ says Lars Stegelmann, responsible for the commercialisation of the electric single seater series which banks on fan involvement with tools like the so-called FanBoost and an innovative App. A strong brand lives of a strong community of supporters who like, share, retweet and distribute own content on relevant platforms. “There are so many topics we can talk about and we are very strong on Facebook and Twitter. We had 3 Mio. video downloads on youtube during the first race which is a phenomenal result for a new product“. The problem with such numbers and certainly one reason for the hesitation from more traditional stakeholders is the lack of financial counter-values. “The user behaviour has shifted towards handheld devices. People want to consume the product on demand. But the crux is, we don’t manage to monetarise this today. We all say we should do more in the social media, but as long as Formula 1 gains 600 millon Euros from traditional TV with partners like RAI, BBC and RTL, you cannot put their noses out of joint and say, we’ll do it for free on Youtube from now on.“ argues Toto Wolff.
You need to open your eyes and analyse what others do better.
But the truth is that even the traditional media partners are loosing out on viewers. The German TV channel RTL is currently reconsidering its involvement for 2016 following a drastic decline in viewers by one million compared to 2013 and six Mio compared with 2001. 2014 saw them with the worst audience share since 1994, the year of Senna’s death. An alarming value in a season with more drivers from Germany than any other nation, a German title contender and a German team winning the contructor’s championship. According to RTL sport chef Manfred Loppe at least partly a result of “a hardly comprehensible rule set and the sometimes unfortunate and counterproductive external presentation“ of the sport. Such issues are not exclusive to the pinnacle of motorsport; complicated rules and incomprehensible penalities have also caused a great deal of frustration in the German Touring Masters Championship, the most popular Touring car series worldwide, which also suffers from noticeable losses of TV audiences.
“Comprehensibility is a key element of successful brand positioning. Everything we do to complicate an event is counterproductive because it reduces the communicability and dilutes the experience“, explains brand expert Frank Dopheide, who thinks the motorsport industry could learn a lot from Hollywood. A key element of any successful blockbuster is the clear identification of heroes and opponents as well as their rituals, recognisable icons and an understandable rule set for the big showdown. This common understanding creates a sense of belonging and identification amongst the fans. But there would be no excitement if the outcome of the story was clear from the start which is why an element of uncertainty is key to the success of every good story, but also of every sporting event. Regulatory bodies put in a great deal of thought to create a ruleset ensuring fairplay but also enhancing excitement to keep the fans interested. But sometimes, these efforts backfire as we could see with F1’s double point debacle in Abu Dhabi this year. Natural obstacles, coincidences and accidents are good for the communicative thrill; an artifical rule set isn’t. But the latter is largely the set up of the entire industry. No reason to worry according to Wolff: “We have had one of the most spectacular seasons at all with more overtaking manoevers than ever, so when someone claims it is all too complicated for the fans I would like to know what it is they don’t understand and then we can address it, but I don’t see that being the issue“.
The discussions show that it’s time to rethink the core values of the sport. What is its mission? What are the common rituals nowadays that fans are sitting in front of their Iphones rather than around a barbecue on a track campside? For the innovative Formula E the solution lies in bringing the action to the fans. “Nowadays not everybody can afford to take three days off to travel to a race track in the countryside“, says Stegelmann. In his series, everything happens within a day: practice, qualifying and race. “That way we can reach target groups who are less financially sound because they can afford to take a day trip to the city. Plus, the access to the race track is partly free – you don’t even need a ticket.“ His success formula is to create entertaining events rather than a race series designed for motorsport enthusiasts only. The so-called eprix offer off-track entertainment with music acts, racing simulators, e-bike displays and cultural villages with activites for families and children. All under the umbrella of sustainability and clean mobility. An approach which is supported by the brand expert: “It’s not about what people buy, it is what people buy into“, Dopheide quotes the President of Procter and Gamble, a company that spends more than 3 Billion Dollars per year on advertising. Today’s brands promise the consumer more than just the purchased item, they offer an entire lifestyle that comes with it – for free. A good example is Nespresso. When viewed dispassionately, it is just another coffee brand. And yet people are willing to pay 23 EUR per pound instead of 3 EUR for an alternative brand even though blind tastings have shown that consumers find absolutely no difference between a cup of Nespresso and the cheap no-name brew. The reason is simple: Nespresso promises “la dolce vita“ and buying coffee in one of their elegant shops is an experience, not an inconvenient necessity. That principle doesn’t work for products only – it could work for an entire industry.
In order to achieve this, the players need to learn how to exploit the power of the communities. Give them exciting stories and personalities to identify with, good content to share and a platform to extend the communicational efforts of the brands. Mercedes AMG Petronas have done a good job off track as well. With 10 Million followers on twitter the team’s account alone has made up over 30 percent of social media activity of all F1 teams this year. Toto Wolff is thus confident: “In the future we will develop new formats with the existing partners, and this is what’s happening. But the technology has to set the agenda. And you have to take it one step at the time. Formula 1, as a product, is too big for experiments and I am convinced that eventually, it’s all gonna fall into place“. Formula E and its partners are already working on such solutions. In the near future, they will introduce a 360 degree camera on each car which the fans can select and control via the Formula E app. A real-time lap with your favorite race driver – more involvement is hardly possible. “You need to open your eyes and analyse what others do better“, admits Wolff. “There are new concepts, new ideas and new approaches that we don’t see with our mindcuffs, and Formula E is something that we watch very closely. We’ll have to see which way it goes, whether or not we need a FanBoost or not is anyone’s guess.“ “But Formula 1 is in the media, and it is also in the media because it is controversial. Sometimes any news is good news and that’s always been part of Formula 1.”