Sponsorship Visibility and Possible Problems

The visibility of motorsport is at its best well targeted and effective advertising, but even with the current Formula 1 cars, some teams are not able to communicate the benefits of visibility to potential marketing partners.

Attracting sponsors to motorsport has always been a challenge, including in budgetary terms. Almost all visibility is concentrated in the main series, where sponsorship budgets are considerable for many companies. Companies must therefore be confident that the marketing money spent on motor racing will be returned, preferably many times over. Many smaller companies that sponsor racing probably have more of an emotional attachment to the sport. For example, key people in the company may be former Formula One fans or even racing drivers.

Is sponsorship the only way to finance racing?

Sponsorship is one of the main ways of financing motor sport, although not the only one. In general, sponsorship in motorsport can be divided into personal sponsorships for drivers and team sponsorships. The sums involved in team sponsorships run into several million euros per year at the main motor sport league level. In Finland, for instance, kasinot ilman tiliƤ (casinos without registration) can in the upcoming years be sponsoring rallies.

Over the years, such well-known sponsors have included Shell (Ferrari), Red Bull (rally, two different F1 teams), and a few unnamed tobacco brands. But how can smaller leagues get funding for their activities in sports with seasonal budgets that easily run into hundreds of thousands of euros?

This is not an easy equation, which is likely to reduce the training volumes for lower motor sport categories and junior activities. Start-up stables and teams usually need a venture capitalist or other financial backer. On the other hand, corporate loans taken out by stables are also at least partly an important part of the core funding for small stables.

Many early racing drivers usually have their own angel sponsor, who will finance a driver they believe will do well in the future in return for long-term visibility.

Target group for racing marketing

The target group for racing marketing is a very international group of people of different ages. People in Europe, Asia, and also across the border in the United States are interested in different forms of motorsport. However, motor sport in the U.S. is more distinctive, while in Asia and Europe the same series, Formula 1 and MotoGP, are predominantly encouraged. The vast majority of the target audience is adult males across a very wide age range. Motor sport is followed in urban and rural areas, although rallying, for example, is more popular in smaller towns and cities.

Sponsorship opportunities

Motorsport sponsorship usually includes logo placement on the sponsored car, various sponsorship events for key customers such as companies, and product licensing opportunities. Logos on cars have a high value, especially through TV broadcasts, which can easily increase brand recognition, especially for consumer brands.

Is there too much sponsorship in motor sport?

Motorsport has often been accused of being at worst a marketing showcase for big business. On the other hand, the development of racing games in particular is a very expensive business and many motor sports simply would not work without sponsorship.

In the last 10 years, sponsorship of the main series has also been restricted. Many companies are also discouraging sponsorship of motor sport, for example for environmental reasons.

Motorsport can also encourage sustainable development

What do motorsport and climate change have in common? At least that motorsport can be affected by weather conditions that are predicted to become more extreme as a result of climate change. A case in point was the F1 race in Japan. After the race, the headlines were dominated by the damage caused by typhoon Hagibis, which ravaged Japan. The news coverage portrayed the Formula One circus as a victim of the hurricane, with qualifying sessions having to be cancelled due to windy conditions.

However, the link between motor racing and the worsening climate change was not highlighted. It is very strange that while the rest of society is developing and implementing solutions to the climate crisis, motor sport is going round in circles on the strength of fossil fuels as if nothing has changed.

It could be another way. Motor racing could serve as a testing ground for developing new solutions. An easy first step would be to run rallies on sustainably produced biofuel. The desire of traditional oil companies to cling to the fuels of the past is understandable, but for companies developing new solutions, sponsoring a petrol-fueled frenzy is a growing image risk.

F1, touted as the pinnacle of motor racing, could lead the way by switching to electric motors. Boring races would be spiced up if, in addition to changing tires, cars were to swap batteries during the race. Better still, if F1 races had to develop batteries that could last the whole race without running down.

But developing car technology and new power sources is only part of the solution. Even more important may be the pattern of thinking that motor racing gives people. When car manufacturers, racing teams and the formula and rally stars that so many fans follow take climate change seriously, it sends a strong message to all those who follow the sport: sport is not an isolated island, not even motor racing. New and more sustainable approaches are needed everywhere.

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