Opportunity for US tech brands in F1: Lizzie Isherwood, senior account director, communications, at CSM Sport & Entertainment, explains Formula 1’s increasing prominence in the US.
With the announcement, last week that Formula One will add another US race to the schedule starting in 2023 – the Las Vegas Grand Prix – any questions about the sport’s growth intentions in North America could be put to rest.
Miami is the most talked-about race on the 2022 schedule, and there’s no doubt that with its Saturday night race slot, Las Vegas will draw the same degree of interest, if not more, the following year.
I’ve previously written on the changing dynamics of Formula One in the United States and why the sport has become so popular among fans and brands alike. Another intriguing tendency is why technology companies have taken notice of the sport.
Why is F1(Formula 1) attracting so many technology brands?
As more businesses want to build completely integrated partnerships, Formula One represents a powerful sponsorship opportunity, playing a critical role in research and development that benefits the company and the team. This is especially important in sports where a fraction of a second can mean the difference between winning and losing.
Technology brands may play a genuine and direct influence on the teams’ performance with which they partner in motorsport. In exchange, F1 provides an unrivalled global platform for partner products to demonstrate their value in the world’s most competitive, intricate, high-pressure sport.
While some brands may be deemed “little” compared to what Formula One has seen in the past, and while their financial investments in any collaboration may appear modest, they have found a way to provide value to a team in other ways. It means having access to cutting-edge team facilities for brands, which are great for testing new products and ideas. These agreements give teams access to in-kind support and field specialists. What was the result? Formula 1 sponsorship deals are becoming more flexible and adapted to the specific needs of each brand and team.
The opportunity for storytelling to drive growth beyond typical hospitality programmes is also genuine. True integration stories provide a clearer product or solution endorsement than lifestyle and consumer companies, which often find authentic narrative options limited. Formula One’s clout and technical prowess distinguish it from US-based racing series and other global sports in this area, where innovation is less prevalent.
Why F1(Formula 1) attracting mostly US companies
Apart from many of these up-and-coming digital companies based in the United States, Formula One’s heritage and presence outside of that market add to its attractiveness. The sport’s growing popularity in the home market gives comfort, but the real value is in how Formula One allows US firms to reach out to the rest of the world and generate new revenue streams.
These are the populations that the companies will target, with on-car or driver branding boosting mainstream recognition outside of the US and narrative engaging and educating consumers. The global following of Formula One (estimated to exceed one billion by April 2022, according to studies) and the nine-month, 23-race calendar provide unrivalled access to consumers, partners, and networking opportunities throughout the year.
What are the requirements for forming a successful technical or integrated technology partnership?
Integrated partnerships are perhaps the most useful and effective relationships when the following golden rules are followed.
Before any agreement is signed, all parties must agree on the partnership’s long-term goals. Both the rights-holder and the partner must believe in the relationship, the benefits it can provide, and be willing to approach it collaboratively, sharing ideas and eventually embracing the agreement’s mutually beneficial characteristics.
Patience and dedication
Any contract involving the integration of a new solution or technology within a Formula 1 team, in reality, necessitates patience. Product tests will be required before any meaningful product integration plan can be considered unless the team uses that technology all along. While the long-term goal is important, it is also important to recognize that the team’s performance cannot be compromised. Therefore patience and commitment are required, especially in the first year.
Although it may seem self-evident, resources — both in terms of people and time and budget – are frequently ignored or undervalued. While the initial investment in a contract is one thing, the activation investment – whether it’s a suite of social media assets, guest hospitality programmes, public appearances, or sales activities – must be considered before a deal is finalized. It’s critical to have an internal point-person for the partnership with access to the right internal network and the authority to make specific decisions and the internal resources to oversee product integration and optimization.
Formula One has progressed with the times; the cars and calendar have changed over the years, as has the sport’s sponsorship landscape. Expect to see more US names enter the mix through cleverly integrated arrangements as the sport’s fan base grows in the United States. Sponsors who can strike a truly collaborative and inventive connection with their rights-holders will be the ones that win, getting the most out of their investment and laying the road for long-term relationships in a sport where technology is becoming increasingly crucial.