A former racing driver himself, Tom has over 15 years of commercial experience in Formula 1, including 10 years responsible for Commercial Alliances at Williams F1. He is currently CEO of Rush Group – the sports and entertainment marketing specialists whose rapid success was recently highlighted by Forbes. This time Tom Potter shows us how the Formula 1 world would look if he had the steering wheel of the whole sport in his hands.
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Sporting regulations or the format of a race weekend seems to dominate these “If I Ran F1” features. Frankly, I don’t think there’s too much wrong with the quality of the racing and it’s hard to say if any changes implemented in recent years have significantly increased or decreased interest in or consumption of the sport. I suspect it is the latter: I’ve followed Formula 1 all my life, but sometimes struggle now to see what happened to a driver until I’ve heard or read the post-race interviews.
Often the drivers will even say they need to speak to the team to understand it themselves! It’s hopeless expecting most people, especially anyone new to the sport, to go to such lengths to understand a Formula 1 race they just watched with their own eyes – but that’s a problem easily fixed. It’s worth noting the World’s biggest other sport, football seems to have done very well without changing the game’s format, size of goals or length of the game preferring to focus on commercial and marketing strategies to increase audience engagement and maximise revenues for the game…
The challenge is adapting the sport to the new digital era of media consumption, which plays into addressing the sports’ key commercial challenges: a) maintaining and growing interest in the sport and b) better marketing to address the issues of unsold or undersold sponsorship. Formula 1, and the majority of its teams, predominantly rely on the race promoters and contracted media coverage (whilst other media coverage is still broad the content is tightly controlled and in effect restricted) of the Grands Prix. They invest very little if anything at all in marketing themselves beyond contractual obligations to their sponsors.
By contrast, the likes of Manchester United or the NBA’s approach to their marketing and sales is more consistent with a large global consumer brand.
By contrast, the likes of Manchester United or the NBA’s approach to their marketing and sales is more consistent with a large global consumer brand: they invested heavily in developing and maintaining the best understanding of their audience; they properly measure the impact of their sponsorships on this audience’s thinking and purchasing behaviour to create a proof and to demonstrate value; they have heavily invested in and proactively developed fan bases in new markets, e.g. through establishing grass roots football programmes, licensing deals, exhibition games and so on; they invest heavily in digital and now have some of the largest social media followings in sport; they are highly visible and accessible in the corporate marketing world, and they are great at reminding the World about the size of their fan base and value of their partnerships. In fact, I suspect the perception they have now established effectively overrides a lot of normal due diligence by sponsors. By contrast, the current broad perception of F1 sponsorship is more cynical, inaccurate and or misinformed. That’s a lack of marketing. The World’s biggest advertising agencies were built on the fact that investment in marketing pays off when it comes to sales. Trying to achieve strong sales without marketing is a tough slog… that’s perhaps why Manchester United’s new £750million 10 year deal with Adidas dwarves the scale of any commercial partnerships in F1 (with the possible exception of Philip Morris’ deal with Ferrari).
The majority of teams’ budgets are controlled by fiercely competitive racing men or technicians rather than businessmen so their natural instinct is to invest everything they have in making a fast car and pretty much then hope the commercial success will naturally follow. I’m afraid in today’s world it isn’t and investment in marketing is too far down their priority list. So if I ran F1 I’d simply take some of this responsibility away from them, and allow them to focus on the racing. I’d place a modest tax on all sponsorship income and fund-match that from Formula One Management’s income to fund an independent world-class marketing operation for the sport as a whole.
Formula One Management and each of the teams would still take care of their own sales, but this independent marketing department would feed them; it would be responsible for raising the profile of Formula 1’s sponsorship proposition in the market, dispelling all the myths, and provide all the necessary insight and data to support their sales and maximise commercial success. It would provide all the information a prospective sponsor could require to properly justify their investment and develop a successful sponsorship – it would be the first point of call for any organisation considering sponsorship to reliably receive all the necessary information, independently audited of course, to make an informed decision. As such it should quickly become a self-funding resource from the incremental revenues the sport generated. It would conduct regular robust consumer research as well as surveying major sponsors’ management teams and other commercial figures to best inform F1’s commercial and marketing strategy across the board, not just in respect to sponsorship. It would be responsible for engaging and educating new markets whilst listening to the current audience in a meaningful way. I would also put some controls in place to prevent the de-valuing of F1 sponsorships through ill-conceived branding applications or brand clutter – we have the science to know what is effective and what isn’t so why is not consistently applied?
Another immediate priority would be to address the accessibility and consumption of Formula 1. The fact is there are now more mobile phones than people and more smartphones and tablets than televisions. People consume sport in many more ways and increasingly at times and places that suit them – increasingly a TV is not involved much at all in their overall time following a sport yet TV is still pretty much F1’s sole channel to market. FOM may reject the scale or lack of direct revenue-generating models digital and social media platforms currently offer, but I’d question if F1 can afford not to embrace this new world at least purely as a marketing platform in the interim. Undoubtedly the revenue models will be developed and when it does F1 needs to be in a strong position with a digital presence and consumption more comparable to its current TV audience.
F1.com’s visitor traffic shows the great potential to feed social media platforms with the fantastic content F1 undoubtedly has in spades, even compared to other successful sports in this space. I’d question if this need would compromise F1’s TV broadcast rights deals. I actually suspect in the medium term the increased engagement from fans and overall viewership would actually help to drive them up. From a sponsorship perspective digital marketing is an increasing, if not already the main, focus for many global brands – this makes them content hungry, but currently the content rights are too restrictive to be of great value whilst both the official F1 related social media audiences are relatively underwhelming by comparison to sports that attract much smaller TV audiences. I’d give them a bit more to play with in return for a simple commitment to investing in using it.