Guest blog by Oliver Howard
Partnership Development Director
CSM Sport & Entertainment
I’m sure you’ve all heard it before: technology brands and F1 are a ‘match made in heaven’. A sport that hinges on hundredths of a second, so the narrative goes, provides the perfect testbed to prove the efficacy of your technology.
The tech brands themselves have certainly bought into this neat synergy. Since 2017, there has been a 150% increase in tech sponsors entering F1, and as of 2023, they make up nearly a fifth of all partners in the sport, attributing $380.3million in revenue, according to CSM Research & Insight.
In fairness, the narrative does ring true. This sport, more than any other, remains a battle of technical expertise and engineering as much as the skill of its drivers. Yet, it’s hard to escape the feeling that we’ve moved into the realms of cliché.
In such a saturated landscape, a technology brand simply existing in F1 is not going to cut through the din. So, how do you stand out from the crowd, and what does true partnership success look like? The key, as always, lies in authenticity and having a strong partnership strategy from the outset.
A real need?
We talk about authenticity a lot in the partnerships sector. A word so overused that it has lost a little of its significance. But for a tech brand in F1, it still means everything.
What we really mean by authenticity in this context is a true integration of the brand’s services and solutions into the successful running of either a team – both at track and HQ – a circuit, or the sport more broadly.
This is all the more pertinent given the recent introduction of F1’s cost cap – limiting the amount teams can spend on performance improvements over the course of a year. As teams look to maximise efficiency, tech partners not only provide a bump in sponsorship revenue, but also a cost-effective way of investing in the hardware and software required to compete. This enables brands to create authentic use cases on the most challenging stage.
So, whilst partnerships become ever more sophisticated, there is a remarkably simple truth that applies to tech partners involved in F1. If your technology is being trusted to boost performance in sport’s most pressurised environment, the results will be plain to see and your story will have largely written itself.
In 2021, Red Bull Team Principal, Christian Horner, spoke of Oracle’s role in Max Verstappen’s world title win: “Oracle Cloud enabled us to make race-day decisions that helped Max Verstappen win the 2021 Drivers Championship.”
The bedrock of any successful partnership, then, is demonstrating a real need for your services; the golden goose that could and should unlock a wave of additional opportunities for a business to further harness the power of its technology.
Better beyond the grid
F1 may feel a world away from the scene outside your front window, but the technology endemic within the sport is also being used to improve countless aspects of daily life.
The most obvious is in the performance, efficiency and safety of road vehicles. Back in the early 2010s, energy storage specialists Williams Hybrid Power – a division of the company that owns the Williams F1 Racing team – developed an electric flywheel that could capture energy as cars braked, subsequently using it to boost power via an electric motor which, in turn, cuts fuel consumption. The technology was soon acquired by GKN and installed in buses across London, making the city a whole lot greener.
Elsewhere, fellow Williams F1 partner Aerofoil Energy has used F1-derived tech in its supermarket refrigerators to prevent cold air being lost from the units, which in turn results in 25% lower energy use, fewer carbon emissions and warmer aisles in stores for customers.
And through its connectivity and video distribution expertise, Tata Communications – F1’s Official Broadcast Connectivity Provider – has enabled F1 to move to a remote broadcast production model, reducing its travelling freight and the consequent carbon emissions.
Tech brands that can use partnerships in F1 to spotlight the use cases of their services beyond the confines of the F1 circuit will achieve that added layer of authenticity. Sure, the technology tipping the scales of the Drivers’ Championship is a sexier story, but elevating the everyday lives of the average F1 fan is also powerful.
A seat at the VVIP table
Partnerships in F1, primarily, are a marketing opportunity. And so strong are the synergies between Formula 1 and tech that there is no more compelling platform available in sport for technology brands to tell their product story. For the second year running, F1 has been voted the most tech-forward organisation across the industry. Beyond storytelling, though, lie direct revenue generating opportunities.
Alongside the ten teams, there are more than 330 sponsors and suppliers across the F1 ecosystem in 2023 – a B2B emporium which includes 22% of the world’s top 100 businesses, each of which has its own tech needs.
Through a partnership in F1, you’ve landed yourself a seat at an elite table. And if the technology you offer is tangibly boosting performance, or your specialism in data analytics is helping crunch the vast quantities of information generated by the cars faster than opposing teams, you can expect your voice to be heard across the din.
Take Cognizant, the American IT services specialists – well known in their home market, but less so in the eyes of the wider world. In 2019, prior to its partnership with the Aston Martin F1 team, 30% of its client portfolio was digital. That number now stands at 50%, and CMO Gaurav Chand is under no illusions as to why: “F1 gave us the platform to shift perception… where we could talk to clients and partners about how we are the intersection of technology and racing.”
It was a point echoed by McLaren CEO, Zak Brown, when discussing his team’s partnership with data analysts, Alteryx: “Ultimately while F1 is quite specialised and not necessarily the largest business for Alteryx within itself … it is the opportunities within the partner ecosystem where Alteryx can really benefit long term.”
Tech brands who are authentically elevating the sport can look forward to ‘business back’ opportunities within F1. A boon in an era of squeezed marketing budgets and increased scrutiny over partnership ROI.
Profitability and marketing: A one-two
Now, more than ever, brands are under pressure to focus on their bottom line. And despite the growing body of evidence pointing to the benefits of investing during economic downturn, in that scenario, marketing budgets are often the first to hit the chopping block.
In F1, though, tech brands are being offered the best of both worlds. A truly authentic partnership will not only offer an unrivalled storytelling platform, but also a genuine space for technical service integration and further business generation opportunities amongst the sport’s wider ecosystem.
Far from a choice between the two, this is profitability and marketing working hand-in-hand. A match made in heaven.
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