Does onsite F1 activation increase brand loyalty?

July 31, 2009

The importance of the business of F1 has grown in the previous few years and has reached a certain level of fever pitch since 2008, where every conversation seems to be about income generation and value for money. Despite the disintegration of Super Aguri and the credit crunch in 2008, the total spend on on-car sponsorship peaked at almost US$837m, a rise of US$5m on 2007 (source: Formula Money 2008). Although not significant, it shows that sponsors were willing to justify the astronomical spend in F1.

Now that the credit crunch has set in and a number of high profile sponsors have pulled away from the sport – RBS and ING to name a couple – it will be interesting to see the eventual level of investment in F1 in 2009. One question that has risen in prominence is the level of activation around F1 and its associated success, especially focusing on brand loyalty and resultant income generation – a way of justifying sponsorship spend to stakeholders.

Having looked into studies carried out over a period of 14 years, it can be seen that 72% of NASCAR fans reported that they would ‘almost always’ or ‘frequently’ choose the brand/product associated with their team/sport (Performance Research). At the RAC British Grand Prix in 2000, it was the opposite, where almost 40% of fans insisted that they would ‘almost never’ choose the sponsor’s product ahead of a competitor (Performance Research).

As an example, the RAC British Grand Prix in 1999 was Damon Hill’s last and as such the crowds flocked to see the retiring driver in his last appearance before quitting F1. Benson and Hedges was a major F1 sponsor at the time and took to the Grand Prix stands, handing out a huge number of free goodies, offering Grand Prix simulators and temporary tattoos! The free recall of F1 sponsors onsite resulted in 83% of fans recalling Benson and Hedges (advertising at the time as “Buzzin’ Hornets”), with Marlboro and West at least 35% below.

Performance Research reported a dramatic decrease the following year, back down to 39% of fans able to name B&H as a F1 sponsor. So why did the onsite activation work for B&H and can this be translated to other sponsors?

The onsite fan engagement was honest and open –a simple brand awareness programme that transparently made F1 fans aware of the company’s presence in F1. There were no figures on whether this then increased brand loyalty or boosted sales, but we can deduce (from 29% of F1 fans saying they would be more likely to select the brand associated with their sport) that there would have been a short-term increase in revenue.

I believe that fans are still open to onsite sponsor activation, but are more receptive to non-cynical communications where they are encouraged to learn more at their own pace. For companies that are trying to promote their brand messages through their sponsorship of F1 the task is harder as fan engagement is necessary to allow empathy and understanding of the brand.

We can see from this example that onsite activation can work and would probably have greater merit if the campaign was extended to include a number of races, different markets and continuous campaign theme.

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