May 24, 2021

A Story on Why To Use a Sports Marketing Agency

After a meeting that all the top business executives attended, it was decided that the company had an interest in entering the world of motorsport and Formula 1 to use it as a global marketing platform.
Nothing wrong with that, moreover the Marketing Director is familiar with sports and likes Formula 1, so he is tasked to undertake an investigation and understand the opportunities.

A couple of months before he had been approached by an F1 team for a sponsorship opportunity but he declined it as, at the time, it was not part of the company strategy. Now, he is searching for that contact to reach out to him again and have a conversation.
Once they start talking, one of the first questions he received from the commercial guy at the F1 team is “what are your objectives and the budget available?”.

It is a fair question because having an understanding of the investment level can also help the team to tailor better the sponsorship proposal.

And here is issue n.1: The Marketing Director does not know the budget, or maybe he has an idea but he can’t share it with the F1 Team because, willy-nilly, the negotiation has already started and he is also walking in the dark, why?

We are at issue n.2: he knows the sport, he likes watching it on TV, but he does not really know the cost of a sponsorship in F1 and what he should get back in terms of marketing rights.
He works for a big company, he probably can have access to a multi-million budget to spend and the commercial guy at the F1 team knows that so he proposes two different levels of sponsorship.
In doing that, he proposes a very limited marketing rights package for the lower investment level and a much bigger one for the higher investment level. All of this, along with stunning visuals, a long list of assets and data about the F1 audience. He is doing his job and he is doing it reasonably well.
On the other side, the Marketing Director thinks he has got all the information he needs and goes back to the other senior executives to present the project.

We reach issue n.3: he thinks to know everything he should to make a good decision, but he probably just know 50% of it. And it is normal.
During the meeting, the Business Development Director expresses interest in more hospitality tickets to bring potential clients to the races and drive revenues while the HR Director would like to have more access to drivers to create internal engagement events. But in general, the budget is approved and the deal can move forward.
At this point, the Marketing Director goes back to the F1 Team asking for the additional benefits which the F1 Team, to close the deal, accept to give away.

The deal is done, everyone involved is happy and thinks to have signed the perfect sponsorship, but is that the case? For sure the F1 Team have signed a very good deal, but has the brand done the same?

In fact, we now face issue n.4: the brand has signed it without knowing what the marketplace could offer both in terms of opportunities and costs.

F1 Teams 2021

The Marketing Director is now tasked to manage the project and he is given clear targets to hit. So, he goes back to his sponsorship rights package and tries to see how he can use the different assets to reach the various objectives.

The F1 Team is supportive but he quickly understands that the way he thought, rightly or wrongly, he could use some assets is not possible: the drivers for example are difficult to get hold during the summer as they race every week, the hospitality passes are available but he needs to plan months in advance when to invite guests and the beautiful show-car is expensive to move from the team HQ to the brand’s promotional event. And the social media support from the team is there as well, but in order to fully exploit the opportunity, the digital campaigns need to be paid and not organic.

And guess what, he is left with a very limited activation budget after that multi-million deal and he is thinking: was there another F1 team offering the same marketing rights for less money and perhaps a more flexible and proactive approach in terms of activation? Probably yes. Was there another way to structure the sponsorship and have all the relevant assets to reach the objectives? Again, probably yes.

To cut the long story short, the Marketing Director will probably learn how to maximise the sponsorship but it will be too late to get the right results and an overall good project will likely get cancelled simply because it lacked careful planning and insights at the very first stages.

This story, although simplified, is very close to what happens on a day-to-day basis in the sports sponsorship ecosystem and leads to the following questions: who can help a brand avoid these long series of mistakes? Simple, a specialised sports marketing agency.

At Drive, we focus on motorsport marketing not only because we are passionate about racing and cars, but because this is where our experience, network and competence lay and this is where we can truly help a brand planning, structuring and leveraging a sports sponsorship.

We work alongside a brand to select the right sport and team based on objectives and budget, define the key elements of the sponsorship package and focus on the ones that can deliver the most, negotiate the financial aspects with an eye to the marketplace but also to the activation.
And finally, we assist in drafting the sponsorship contract to minimize any potential risks, offering a 360 degrees service.

Our work also extends to rights holders and drivers, but we will talk about it in the next articles.

But now, reach out to us, we are here for you.

P.S: some brands have a highly skilled sports marketing department who would avoid some of these mistakes, but if you are planning to spend millions on a sports sponsorship, you are still better off having a second opinion from the specialists.

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