The Space Race for 2010

July 6, 2009

Mark Jenkins (Left) with co-author and former Commerical Director of WilliamsF1, Richard West

Mark Jenkins (Left) with co-author and former Commerical Director of WilliamsF1, Richard West

There are some major changes going on in the commercial landscape of F1. Some of the blue chips who poured in vast sums over last few years are leaving, unsurprisingly many of these are in the banking sector. Ing will end their relationship with Renault at the end of 2009, this has been a great case study in brand development with the F1 relationship being used to enter new markets and develop new products, but like many organisations they’ve now achieved their immediate objectives and there’s always a problem with becoming part of background if you stay too long. 2009 will also see the departure of the RBS brand from Williams. However others will remain such as Philip Morris whose Marlboro brand’s logo has been a mainstay of F1 since they first became involved in 1972. They were strongly associated with McLaren up until the late nineties when they put all their resources into supporting Ferrari, even to the extent of getting them to adjust the tone of red they used to more closely align with the Marlboro brand – not something Ferrari do lightly! Currently you will not see the Marlboro name on the Ferrari car and yet they are reputed to be putting in in excess of $100 million per annum, an arrangement which is due to last until the end of 2012. Another big blue chip still in the game is Spanish bank Santander, currently sponsoring McLaren, although this contract is due to expire at the end of 2009, and the rumour mill is suggesting that a move to Ferrari, along with one F. Alonso is on the cards.

Honda's earthdreams concept for F1 in 2008

Honda's earthdreams concept for F1 in 2008

One of the shifts that has occurred in recent years is the changing role of the commercial director in an F1 team. In past times the role of the commercial director was to sell space and effectively create the revenue base for the whole team to run. My co-author Richard West was at Williams during the mid nineties when the whole team were dependent on him bringing in the contracts. However today many of the teams are either funded by car manufacturers who are very particular about the appearance of the overall car and therefore place particular constraints on other imagery being used (BMW are a good example of this), or they are owned by a major brand or group of brands (e.g. Red Bull Racing and Force India) and therefore the options for bringing in further partners are limited. So in most of the teams these days the commercial director’s role has become more concerned with corporate identity and partnerships. However there are currently two notable exceptions to this, the first is Williams who as a private team (ie not owned by a car manufacturer or corporate brand) exist to race and have to fund this through direct sponsorship from organisations such a Philips and AT&T. Up to this year Williams were unique in this position, but have now been joined by Brawn GP in the privateer racers category. The interesting question is whether or not the Brawn management who currently own the team will sell a stake to a major corporate and therefore reposition themselves with the corporate brands category, or whether they will keep ownership and sell space. This presents an interesting challenge as in their previous existence as Honda and before that BAR they have never had to sell space in the way that Williams have always had to in order to survive. When Honda paid the bills we witnessed some rather disastrous marketing programmes (remember the earth car and the green teamware?), and it’s an open question as to whether Brawn have the commercial capability to deliver the funding the team will need going forward. As things currently stand all the Brawn deals look relatively short term and with the exception of Virgin, rather peripheral. It will be interesting to see whether any big corporate names will soon be aligning themselves with the team that is currently most likely to win the championship in 2009.

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