The Art of Selling: Sponsorship 101
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The Art of Selling: Sponsorship 101
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By David Cameron, Italy
Atlas F1 Magazine Writer
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Table of Contents includes links to each chapter
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Ron Dennis once commented that there was an unofficial rate card to sponsorship in Formula One, whereby it was a simple process to work out a sponsor's bill by looking at where their branding appeared on the car, adding up the total spots against the rate for them, and pressing the equal button on the calculator. But the array of services now offered to potential sponsors has thrown the rate book out the window. "I think it's more complex than that - we don't just sell a position on the car, we sell a package of rights.
"Take a company like Accenture; they don't need branding because they're not selling their services to a consumer market, but they want a hook to hang their hat on. So the programme we would sell to Accenture is based far more on corporate hospitality, advertising rights to use the name, fame, image and reputation of the team, access to key personnel, and using Accenture's service within our business to highlight their skills, and they then clearly follow that through with public relations and advertising. So branding to them is of little consequence.
"So I don't subscribe to a sidepod's worth this, front wing end plate's worth this, whatever - we prefer to look at it and figure out who we are trying to sell to; what actually would suit them? Do they want small visibility or high visibility? What package of benefits would be needed to go with that? "Another example of this would be Veltins, who we had for five years, and in terms of corporate hospitality they had virtually nothing, so the resources we had to apply to that side of it were minimal, but what they did want was large branding spaces. So we structured the deal according to that, and as such the rate card has to move. "In simplistic terms, when it was just tobacco money, they were only interested in exposure - never mind the quality, feel the width - just any TV, camera, press, and get the brand on there as bold as you can do. And they've since tried to create a little bit of lifestyle to create an image for that brand, but it's about exposure. That's very, very simple and easy to do; any mug could do that. "With non-tobacco companies getting the exposure but getting the message across is very, very complex, and getting the correct messaging across for HP is very different to getting the messaging across for Allianz. And so it means that we have to apply a far greater resource in my opinion for a non-tobacco sponsor than for a tobacco sponsor. I guess that some of the other teams, when they actually do come out of tobacco, will have to understand that." Wright is very careful to ensure that there are no potential clashes between the various sponsors, and to that end the team will never have more than one sponsor from a business field at any given time. Having ensured that, the potential for the various sponsors to pick up business from each other is enormous, and adds value to the sponsorship deal. "There's two points here. First, there's the point of exclusivity - and every sponsor that we sign with has a clearly defined business group in which they have exclusivity: Castrol is lubricants, Petrobras it's fuel only. Now, Castrol is owned by BP, so clearly if we allow them to have a wider remit then you'd find BP using the image of our team in their forecourts, which they're not allowed to do because we sold that right to Petrobras. And, equally, Petrobras make lubricants, but they're not allowed to associate their lubricants with our team because that's Castrol. So we ring-fence the sponsor's business group and give them exclusivity in that area. "The second point is what the other sponsors feel about [a new sponsor] - say, Budweiser - coming in. Well, we would forewarn them that this is likely to happen, we would even make introductions before, and we have what we call a sponsor workshop on a regular basis where all the sponsors sit together and they will discuss different areas for mutual cooperation and collaboration. "Let's take Budweiser as an example - at the next sponsorship workshop they will be given the opportunity to stand up and say 'right, we've come into Formula One, these are the main geographic areas that we are interested in and this is what we are trying to achieve through the association. We will be doing TV advertising; we will be doing print campaigns'. And what we'll do is say 'how can this work for the other sponsors?' "Let's take some examples: for BMW it may be very interesting at the trade fairs - like the Frankfurt Motor Show or the Detroit Motor Show - to have a Budweiser bar there and Budweiser provide the beer free of charge; more exposure for Budweiser, and for BMW they've got a partner coming in which is high profile and giving them beer at those motor shows. "Let's take another example: the recent swap we did with Juan Pablo Montoya and Jeff Gordon - well, we might do that again, but it might be Dale Earnhart Jr, a Bud driver, and Ralf Schumacher. And it then may become a jointly funded programme with both Budweiser and BMW paying the costs rather than BMW, who incurred all the costs last time. "Let's give another example: Budweiser may say that South America is actually a key market for them in terms of sales expansion, and we would be very interested in working with Petrobras - who have a lot of retail outlets, and I mean thousands of outlets across Brazil, Argentina, Chile and Bolivia. So I might put the two of them together and say here's an opportunity for both - from Petrobras' point of view they could get Budweiser in there and make good profit from selling Bud, and from Budweiser's point of view there's an opportunity to increase their distribution in four countries which they earmarked for expansion. "That may work even further, and at the Brazilian Grand Prix you might get Budweiser and Petrobras contributing to a major forecourt promotion across 7,000 gas stations in Brazil, promoting the BMW Williams F1 team with on-pack promotions on Budweiser exclusively sold through Petrobras retail outlets. "That hopefully answers your question on that one - that's the kind of things we'd look to do."
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"Change to Allianz - Allianz wanted to make their brand internationally known; in Germany it's got 95% recall, everyone knows who Allianz are, but outside of Germany up until a few years ago no one had ever heard of Allianz. So branding is important to Allianz, and the other thing that's important for Allianz is for the message which is all about risk management, hence their focus on safety issues. They're an insurance company - insurance is about risk management. So the package of benefits which we would sell to Allianz would be very, very different to those of Accenture.
