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Why Do Sponsors Put their Logos on Formula and Rally Cars?
Sponsorship is a form of advertising, and of course, those who do it are always looking for economic benefits. A recent exhibition in Monaco made us remember the logos that crossed the finish line together with the champion cars. However, there are several main criteria, each of which should be analyzed separately.
To begin with, there is a question of choosing a goal. Sponsors can support the entire series as a whole, as was the case until recently with the IndyCar mobile company Verizon or the Blancpain series, which is funded by the watch manufacturer. A classic case is working with a team, including as a title sponsor. There are so many examples of this.
It often happens that sponsors run from team to team. For example, the watch brand TAG Heuer, which now works with Red Bull, was once a partner of Ferrari, then McLaren, then the whole Formula 1. So there’s no guarantee of permanence at all.
What are the goals of the F1 sponsors? First of all, it’s brand recognition. You can think of the Santander Bank, which was sponsored by McLaren and Ferrari for over ten years. They honestly admitted that they were able to significantly improve the recognition thanks to Formula 1 – and then left.
Secondly, companies find business partners or develop relationships with them through sponsorship. For example, the Andretti Autosport team is known for it. It has created a kind of business platform where different sponsors meet and communicate, become business partners, and sign new contracts. This is beneficial for both the team and the sponsors themselves.
The same philosophy underpins the work of the Russian Kaspersky Lab group, which sponsors Ferrari and gets profitable contracts.
And finally, there are those sponsors – who start supporting someone simply because they like it, they’re sports fans and they want to get involved simply because they’re interested.
Since it takes money to perform in motor racing, performances without sponsors are hardly possible if you don’t take into account the cases I mentioned earlier: when a new team or a team that needs a good and experienced racer can sign a contract with him for free. But in this case, you can say that the team itself becomes its sponsor.
How many more stories happen when sponsors stop paying. The latest example is the Schmidt Peterson Motorsport team, for which in the IndyCar series Mikhail Aleshin played. In early 2016 they signed a contract with the publisher of the game Doom – Bethesda Softworks, and in early 2017 the company withdrew its sponsorship, and because of this SPM had financial difficulties.
If we talk about the future of sponsorship in the light of new technologies, it’s a very difficult issue. So far, we can’t see any dramatic changes compared to what we’re used to. At the same time crowdfunding is gaining popularity, when social networks are trying to find the money for performances of some pilot. For example, when the Indonesian Rio Haryanto drove for Manor in Formula 1, part of the money was collected this way.
As for the way the picture of sponsorship has been changing lately, we can say that there is not much change. Some companies are leaving, others are coming to their place. It is a pity, of course, that such famous brands as Santander or another famous bank, Swiss UBS, have left. But this is an inevitable process, which is often caused by the fact that large companies have a lot of opportunities for sponsorship, not just motorsports. It often happens that company executives are fans of a particular type of activity. A manager changes – the company’s priorities also change. That’s what happened with UBS.
Earn on expenses
The main purpose of any sponsorship is airtime on TV channels and increasing brand awareness. With the same goal in mind, the company can order the usual outdoor advertising or shoot a commercial – it is these methods of promotion compete with the race in budget items. In order for a sponsor to prefer motorsport, it must provide a greater return. Strangely enough, the return rate of secondary racing series is sometimes higher than that of Formula 1.
“Three times a year I get letters from Formula 1 teams inviting me to sponsor them,” says the MOL Group vice president. – The teams see us at WTCC and think we might be interested in another championship. But when it comes to money, the conversation ends simply because, for the money I can spend on Formula 1, the company will not get any media return”.
According to Köfner, last year, half of the money that WTCC invested in the sponsorship program, including all the cost of placing logos on the car and jumpsuit, as well as the cost of inviting and accommodating guests to the races, was returned: “We were able to recoup the cost through the frequency of appearances in the media. We measured how many times the MOL Group brand appeared in non-public materials with no payment from our side: we have the possibility to measure this figure up to milliseconds on TV. As a result, in terms of money, we received more attention from the press than we invested in the sponsorship program”.
The logic of the sponsor is different from that of the participant. While for the teams and carmakers it’s primarily about winning that counts, for the sponsor it’s much more about the frequency of appearances on the screen, and even accidents help the airwaves. For example, in the last WTCC race in Slovakia, MOL Group protégé Norbert Michaelitz flew off the track and smelled a gravel trap. In a not too interesting race, this error became a real event: the director repeated the pilot’s departure from different cameras and different angles several times. There was one thing in common: in each repetition, in the frame, the inscription of MOL Group on the car was perfectly noticeable – that means that even the 13th place in qualification and inaudible performance in the race did not prevent the sponsor from getting precious ether seconds. To some extent, the car logo on Michaelitz’s car turned out to be even more advantageous than advertising stickers on the Citroen cars that had left the car behind, because if the leaders had nothing interesting going on, and the audience could turn away from the not too exciting spectacle, then on Michaelitz’s flight all the fans turned to the screens, including the boring ones who had already thought about channel switching. After the race Norbert’s accident will be shown in local news releases – this is how MOL Group will get additional advertising, on which it did not spend any money.
Why not Formula 1
Of course, it’s not just that Formula 1 is not suitable for advertisers in some way. In many ways, the choice in favor of secondary series is made because the companies themselves lack something for the real transition to the highest level. Such reasons can be reduced to two factors: lack of money and lack of competence.
Millions of Formula 1 companies can maintain its prestigious status, but they will not be able to get new partners. Six companies have become sponsors of the Slovak phase of the WTCC: together with Matador, ESET antivirus, Slovak oil company Slovnaft, their direct competitor from Poland Lotos, car manufacturer Kia and even Catalan winemakers Freixenet have invested in the race.