The Formula One group is constantly in search of new sponsors. It is a bizarre situation in that the group is actually in competition for sponsors with the F1 teams and they often end up sharing the take, with similar sponsorship appearing on the cars and on the trackside advertising. This is recommended as being the most effective way to get a sponsor’s message across, although there are some companies such as Red Bull that steer away from all static advertising, preferring to be seen moving.
Formula One have never been very active in terms of official partnerships, preferring a number of big deals rather than a plethora of smaller ones. NASCAR, by comparison, has nearly 40 such deals which includes official banks, credit cards, cars, trucks, haulers, tyres, automotive finish, auto batteries, motoroil, insurance, delivery service, and even more esoteric partnerships covering different classes of drink, health products, shaving equipment, chocolate bars, cookies and crackers, office supplies and even building products supplies.
There is, of course, money to be made from such deals and so as The Formula One group continues to squeeze every possible dollar from the business, there is talk of expanding this area, particularly now that the old Allsport Management is being more closely integrated into the Formula One group in London. Thus far we have seen Rolex named as Official Timekeeper and Official Timepiece for a long-term deal that begins in 2013. This means that Hublot is no longer the Official Watchmaker of F1. It would also seem to suggest that Korean conglomerate LG has dropped out as well, although this is yet to be confirmed. LG Electronics was a Global Partner of Formula One and a Technology Partner, with marketing rights as the official Consumer Electronics, Mobile Phone and Data Processor of Formula One, with its logos appearing on F1 timing screens. The deal began in 2009. With Rolex likely to get the coverage on the screens, the latest suggestion is that the Formula One group is looking for a mobile phone deal, which seems to indicate that the LG deal has run its course. It probably has not helped that the Korean GP has been a complete disaster.
There is no word at the moment as to whether the deal with Allianz will continue. The German insurer is an “Official Global Partner” and uses the deal to promote its connections with road safety. The Swiss bank UBS is also an Official Global Partner, in a deal which began in September 2010, so that is unlikely to be up for renewal until at least next autumn. There have been rumours in recent weeks that Mastercard may come is as the official credit card of Formula One and there has been talk of a deal with Citi for some kind of financial affiliation, but that was before there was a change of management in October. It is worth noting that Dermot Boden, the man who did the F1 deal for LG, is now the chief brand officer of Citi. However, since the company appointed Michael Corbat as its new CEO, replacing Vikram Pandit, the company has announced that it is slashing 11,000 jobs and making savings of $900 million next year and $1.1 billion annually beginning in 2014. Thus it is probably not the right time for the firm to be launching into the sport.
India’s Tata Communications is the Official Connectivity Provider of Formula and Official Web Hosting and Content Delivery Network Provider for Formula One, with a deal that began in February this year, while DHL is the Official Logistics Partner and has been for the last eight years.
Thanks Joe,
Any idea of the amount of investment required to become one of these “Official Partners”? Either one of the smaller affiliations or of the major type?
$30 million a year
How much air time would one get for their 30 million compared with say 30 million dollars worth of sponsorship on a Sauber for example.
Surely Sauber, FI et co can’t ask that much for sponsorship and you’d see more? Wouldn’t it?
Correct me if I’m wrong, but wouldn’t 30 million be enough to make that Sauber, a ‘Rolex Sauber’ with some Rolex colours on it, a pretty picture of a watch and some logos on the nose, body and wings?
Surely watching the race you’d see more of the Rolex Sauber than you would get to see Rolex signs at the end of the race on the boards where you are watching the names, not sponsors.
Even saying that, Marussia and co don’t spend that much on the team. Why not buy out HRT, call it Rolex-LG-Mastercard, and you’ve got 90 million dollars to spend.
That would remembered a lot more as a team name rather than end and start logos on boards.
Anyway.
That’s not a lot for a global brand. What is the total for DHL? I would suspect it’s more than that.
Joe I think CNSZU may be baiting you. According to the report by Zylt in the in the Telegraph the information comes from Bernie Ecclestone not Zylt
As does everything.
I think this one will have been given a good check before print because it was all over the cover of their business section. If Ecclestone did not say the words then they would look like fools!
Christian Sylt from an article in the Telegraph today:
“The cost of becoming an official F1 partner tends to be several times less than that charged for title sponsorship of a top team. Partners get trackside signage rights and use of the F1 brand in advertising for an annual cost of around $15m.”
And Christian Sylt’s connection with F1 is?
He has a relationship with copy and paste ….
I knew he was lazy. But cheap also! Real Copy and Paste “journos” spend a hundred bucks for some underemployed student to write a automated script!
I was rather surprised seeing UBS (at all) track side advertising at the USGP in Austin given the problems of the Swiss bank with the IRS who fined them $708 million and paid ‘en passent’ $104 million to a whistleblower.
By the way, does anybody know where the UBS 0r LG money paid for their newly acquired status ends?
Promotional budgets like banks, have no conscience!
“It probably has not helped that the Korean GP has been a complete disaster.”
Has anyone ever said a kind word about the Korean GP? I honestly haven’t seen one.
They won the FIA award for the best promoter in 2010
But I wouldn’t be surprised if that award is all PR/politics.
Microsoft is looking for different ways of attracting attention to Windows 8. They should enter with a mobile phone deal. then maybe W8 users could actually get some interesting F1 apps
With the global audience falling each year it would be interesting to see what Coca Cola can do by means of an F1 promotion, That is if there are any countries left where they are not the dominant fizzy drink provider and actually need some corporate push.
As it stands with the current setup the competition for sponsors can only get more intense as majors drop out. BTW Vodafone have increased their McLaren spend for next year, contrary to rumours that they were ending their F1 involvement.
The global audience is not falling each year.
I can’t even grace this with a moniker of anecdotalism, but as a worried F1 fan, I have been on the recruit, and it is paying dividends. It really is not hard to get people interested. It’s just hard to keep them interested, and with a nice race weekend close to what the average honeymoon budget is, you see a fear in people, like you are pushing crack cocaine.
But if you want to shoot the numbers something silly, re-run every race possible on Sky (they have been trying a bit, but not like they care, I guess they want to own it all, first, a house clearance from a old man, suits and all) so I can leave it running in my kitchen “cabinet” and anywhere else that makes sense.
I was a total nincom this year, to not realise you can let someone else watch your Sky. But put it on continuous, repeat in sequence. I think I might have problems getting people concentrating on work. Or me.
For rpaco, so sorry moonlight sucked rocks. Must add also that the goog’s chrome busts silverlight too. Have to use IE else feed crashes. Feels like mid 90′s MSFT tactics.
(explanation, rpaco is a dedicated Linux guy, and the delivery of Sky on Linux failed us, when by rights all he needed to do was log in, and I seriously doubt rpaco makes mistakes with his machines. “moonlight” is the Linux “copy” of msfts “silverlight” a attempt to replace Adobe flash. I actually think silverlight could have been superb. Their problem is so often too much talent, no way to manage it. Just look at the size of their programming staff. But when the game is to change everything every year or so, fat chance making ports (making software work for where it was not written))
Anyone weird enough to have been paying attention to my comments, will know I made a switch on my mid term predictions for F1, with caveats. I think I should collate those caveats carefully for one ensemble. But we are still dealing with fundamentals, and we’re not talking potholes here in a street road, but hitting them at 200MPH.
The Unique audience in the UK has dropped by 22% since Sky F1 was launched. The non-unique combined BBC/Sky viewers are down 16.93%, and the BBC has lost 31.4%.
The tiny Sky audience (just under half of what they had promised, average of only 620k), has led to the departure of Santander as station sponsor, although it’s being spun as a positive thing.
One way to reach out to the next generation is to reduce the cost of F1-related apparel. Nascar fans are happy to dress like billboards for their favorite team or driver; the cost of similar F1 gear is prohibitive.
I’ve heard that UBS are unlikely to renew their deal. It doesn’t look good spending $50m on F1 when staff are being made redundant and one former trader posts the biggest losses from “rogue trades” in history.
I read this afternoon that Ecclestone has got a deal with a vodka maker waiting in the wings so he can drown his sorrows with that (if they pay in kind!). Then again, if they pay in kind I would have thought that Lotus and Kimi would be first in the line!
Do you believe a ventriloquist or his dummy?
Just depends if you can get the vent to talk.
Correction, biggest losses from rogue trades in history in the UK. Jerome Kerviel in France a few years caused three times as much damage.
“… the Korean GP has been a complete disaster.”
Surely not, I thought it was merely looking to re-organise its payments to BCE because it was experiencing teething problems, taking time to find its audience, in the process of expanding its profile and in the early stages of a long term plan for economic growth!
The benefit I can see of being an FOM sponsor is that you’re not linked the one team’s performance. Companies are now very risk adverse. No company CEO wants to invest $30m into a team’s sponsorship only for it to be embroiled in “Crashgate”, “Spygate” or a driver’s death. Hence, being a FOM affiliated sponsor makes sense.
This would be good time to dig up MOLE !
He had plenty of rest since May
Surely he would be able to shed some more light on the F1 shenanigans, starting with how Mr E is still able to run rings round
everybody including the German banks and prosecutors…
Regards,
“Martin”
So wrong!
Mole does not rest, but is on a mission!!
I think you are the Mole. Joe is merely Watson to your Holmes.
Any truth to the rumors that honeywell could become the title sponsor of lotus?
If you read The Business of Motorsport you could have read all about that three weeks ago…
http://joesaward.files.wordpress.com/2012/12/screen-shot-2012-12-11-at-10-56-20-e1355220554138.png