Some deals are done direct by F1 commercial director Brandon Snow or the teams’ commercial departments, but many come in through agencies that then help the sponsoring brand to activate its sponsorship through hospitality or PR and content programmes. One of the largest agencies in motorsport is CSM, headed by David Webb.
Webb’s route to F1 was unconventional. He was in the British Army for 10 years, leaving with the rank of Captain. His first civilian job was as assistant to Sir Jackie Stewart for two years, during the Stewart Grand Prix years. Webb moved into the account management side of the team, which was acquired by Jaguar Racing. The team was subsequently bought by Red Bull and is the Red Bull Racing team we know today. David was headhunted to manage Royal Bank of Scotland’s F1 sponsorship with Williams and all their other sports sponsorships. Zak Brown brought Webb in to run the international side of his JMI Business and when that business was taken over by Seb Coe’s CSM sports marketing business and Brown left to run McLaren, Webb took over management of CSM’s motorsport business.
They are active in Formula 1, Formula E, MotoGP, NASCAR, IndyCar, WEC, Extreme E and Dakar and have been responsible for bringing in many of the familiar brands that fans see on the F1 cars.
“To be successful as an agency, you need to have the point of the arrow, which is very much the sales side, finding the brands that we can marry up with a sporting property,” says Webb. “For example if we find a brand we think is interested in F1. We try and match their brand attributes and other KPIs and show them across a number of different teams. We're not retained by a team, we actively push back on being retained. This means we can walk brands into McLaren, Alpine or Ferrari, depending on which one has the best commercial ‘fit’ or offers the greatest value. We've got to be very careful knowing what the brand attributes are of the teams, that we're taking them the right brands. So we've done a huge amount of due diligence before we bring a brand to a team.”
F1 teams today are not only looking for brands that fit with their image and will pay a high sponsorship fee. It’s important that any partner brand is active in different markets. Ideally they will spend money advertising their F1 partnership and activities. That in turn promotes the team and all its other sponsors. The more they activate, the more it brings the team and its ecosystem to life. Advertising alone is of limited value.
“There’s nothing worse than a brand going in and just paying money to put a sticker on a car and not do anything with it,” says Webb. “Teams are actively looking for brands to promote themselves and their partners.”
With F1’s commercial success many teams are experiencing a curious phenomenon, albeit a nice problem to have, whereby they have too many sponsors and not enough contracted days with the drivers to service them all. Drivers only have so much available time when not racing or training and some teams have over 50 partners.
“We’re seeing situations where a team has a certain number of days they will have contracted with the driver when they wrote a contract two years ago. Now they're finding the inventory is getting really full, they can't give any more driver days. So they've got to renegotiate with the driver, or not give those rights to a new brand,” says Webb.
Another challenge arising from the recent success of F1 is that many teams that had been struggling to land sponsors before Drive to Survive and the COVID pandemic, sold their rights cheaply and are regretting that today.
“There were teams out there, without mentioning names, who were underselling the marketplace dramatically. And then suddenly, two years later, they're waking up to the fact that they've got brands on the car that haven't paid them the money that the current market will justify,” says Webb.
“So they're using clauses now to get out of their contracts. Brands, which came in on a five-year deal with an option after three years, the teams are pulling the option, because they know there is more money elsewhere.”
Many people point to Drive to Survive as the trigger for the unprecedented growth in the series, especially in the US. But Webb believes that another tactic by Liberty Media has also made a significant difference; opening up freedom for the drivers and teams to make social media videos.
“Ten years ago, no driver had a significant social media platform. And now every single driver is communicating to at least 300,000 people and in some cases many more. Lewis Hamilton has 46m followers, more than Mercedes, Max has 16m. It's huge, it's made a dramatic difference allowing the drivers to be able to communicate through platforms with their own content,” he says.
This has led to F1 pulling in significant numbers of previously hard to reach demographics like 12-18 year olds, while the female following F1 now accounts for 40% of the total audience and is rapidly heading for parity with males among the new fans of F1. This opens up scope for more consumer and lifestyle brands to enter the championship.
Most brands have a clear objective when buying rights to sponsor F1 or a team, for example to increase brand awareness or grow market share in key markets. Most achieve their objectives and stay around, but some do not. Webb argues that this is where an agency makes a difference by knowing the F1 landscape and advising on how best to activate the sponsorship to maximise the objectives and return on investment. We are seeing more and more data-based performance marketing tools being used in F1 sponsorship, whereby teams can get a significant uplift on the money they receive from sponsors by connecting their fan database with sponsor databases, identifying new customers and receiving a share of new business sales.
“It's not just about purchasing rights,” says Webb. “It's about taking it to the next level after you've purchased the rights. Because if you're not activating, you're wasting money.”
