From brewers to pubs: The secrets of F1 sponsorship

F1 sponsorship: Company pays millions, company gets logo on car and T-shirts, company gets a few hospitality tickets and perhaps a few minutes with one of the drivers, right?

Wrong. There’s so much more to sponsorship in F1 – and much of it is thanks to a rule change in 1968…

Cigarette company colours – F1 takes a deep breath

Until 1968, cars taking part in international races were prohibited from appearing in sponsor liveries.

In F1’s early days, cars were painted in ‘national colours’ – British Racing Green, Rosso Corsa for the Italians, silver or white for Germans.

But in early 1968, the rules were relaxed. At that year’s South African Grand Prix, F1 was introduced to team Gunston (1970 car pictured) – set up months earlier by Rhodesian tobacco company Winston – and its two cars, painted in the orange, brown and gold colours of the Gunston ciggie brand.

Eyebrows were raised but plenty in the paddock saw the opportunity which was there to be seized.

It wouldn’t be long before other teams raced in tobacco firm colours and benefited from tobacco firm money as well.

Team Lotus, under the wily guidance of Colin Chapman, abandoned the British Racing Green livery which had served them so well and turned out in the Gold Leaf brand colours of Imperial Tobacco.

The sponsorship wars had begun.

Ban tobacco adverts? Not so fast…

As the years passed, F1 teams faced ever more stringent restrictions on advertising tobacco.

A ban in some countries on cigarette advertising saw F1 teams come up with gloriously inventive solutions to keep tobacco money flowing in.

At Ferrari, tobacco sponsor Philip Morris started to introduce a barcode design on the cars that reflected the Marlboro packet colour scheme; the design evolved but eventually was dropped as controversy grew over its use. But the job had been done – people were talking about Marlboro.

BAR’s Lucky Strike logos were replaced with ‘Look Alike’ – again, it was enough to get people talking.

And the West company (Imperial Tobacco) replaced their name with East. How we chortled.

The Jordan team (pictured) were even more inventive.

Prevented from running Benson & Hedges cigarette logos, they adapted the B&H theme to give us cars emblazoned with Buzzing Hornets, Bitten Heroes and Be On Edge.

The liveries were among F1’s most memorable – snake heads, hornets and cheeky but cool logos, all executed in an eye-catching yellow and black colour scheme.

The Ferrari solution: Sell the whole car

Despite F1 trying to squeeze tobacco branding out, there is still cigarette money in the sport.

Ferrari have an ongoing deal, worth an estimated $160million a year, with Philip Morris. The tobacco giant effectively buys all the advertising space on the car and is then allowed to re-sell it to other advertisers to recoup money.

This gives Ferrari and Philip Morris the chance to tweak the red Ferrari colours so that the cars are actually running in red, white and black colours… rather similar to the colours of a packet of Marlboro reds, in fact.

See what they did there (that’s the 2016 car, pictured)?

In fact, Ferrari’s relationship with Philip Morris runs far deeper even than that monster deal.

Team Principal Maurizio Arrivabene came from the tobacco giant, where he was a vice-president and Marlboro brand ambassador.

But I can’t even see the logos

F1 sponsorship is not just about getting logos in front of TV cameras, although that remains a key consideration for big-name sponsors.

Smaller sponsors will work in partnership with an F1 team, perhaps supplying data devices or other expertise.

These partners get to work and learn with the F1 teams and, of course, they also get to treat clients and potential clients to a VIP trip to the races, complete with corporate messages galore.

For a great example of this, look to the Williams team. Their headline sponsor, Martini, has its iconic stripes all over the car, and very handsome it is too.

But another partner is called Randstad; if you’re a Williams fan, you’ll be familiar with Randstad’s logo, which has featured on the cars for ten years.

Randstad are an HR company, specialising in engineering and IT. Working with Williams helps Randstad keep abreast of developments in the engineering world, as well as helping it schmooze clients.

Williams and Randstad have taken their partnership to a whole new level, jointly launching an academy to identify talented young engineers from around the world and help them get into F1.

Other firms have similar deals but you won’t even see their logos on TV – they aren’t worried about a global TV audience, but they do want to tap into key areas of expertise in an F1 team and, yes, they do want to take clients to a grand prix.

Such deals can bring upsides for the public – audio giants Bose have produced free playlists with Mercedes drivers Lewis Hamilton and Nico Rosberg, for example.

And there can be downsides – sometimes, the marketing messages sound ever-so-slightly over-contrived. Try this one from Daniil Kvyat, talking about Toro Rosso’s partnership with cloud data company Acronis: ‘Acronis is a cutting edge and forward-looking company, growing rapidly in the field of data protection, which links in very well with the sport.’

But, of course, that message is not aimed at general F1 fans, but rather targets a very specific group of people in the tech world… albeit in a painfully clunky way.

I want my name on the car. How much?

Depends on how big you want your name to be, and where you want it to appear.

Teams have found it harder and harder to attract sponsors in recent years – it’s estimated they raised $750million in 2015, but that was $200million less than three years previously – but it’s still eye-wateringly pricey to get some space on an F1 car.

A big logo on the rear wing, sidepod or airbox of a top car could set you back $25million a season.

Something a bit more modest, say on a wing mirror or rear wing endplate, would still leave you little change from $5million. Other slots, such as a small logo at the bottom of a sidepod, can be snapped up for a paltry $1million.

Of course, less successful teams cannot charge as much – they’re not going to get you the same exposure.

McLaren have found this out to their cost: they have refused to drop their rates significantly since their championship-winning days, even though they parted company with their last title sponsor, Vodafone, in 2013.

It was reported that Chairman Ron Dennis turned down a £43million offer from Johnnie Walker whisky at the end of 2013 because it was ‘too small’. McLaren are still without a title sponsor, Dennis – whose position is under threat – says he is concentrating more on short-term deals and the team’s performance has been mediocre at best.

Teams have to compete with F1’s owners for advertising

As if life wasn’t tough enough for F1 teams struggling to find partners, the really big sponsors are being poached by F1 overlords.

The most recent example of this was Heineken’s controversial decision (it’s that drinking and driving thing) to become F1’s main sponsor, in a deal that could be worth a quarter of a billion dollars if it runs for its full seven years.

Now, it’s not all bad news for the teams – about 60 per cent of the money raised by Formula One Management is distributed to teams, although the way it is split is unfair to smaller teams.

But the fact remains that Heineken could have supported one, perhaps even two teams with that sort of spending power.

But big brands know there’s a big risk in tying themselves to a particular team – it may underperform, like McLaren have been doing – and they’ll get far more exposure from trackside billboards than from logos on individual cars.

That means teams, and the marketing agencies such as Chime Sports Media who help deliver sponsors to those teams, have to exert ever more effort for ever diminishing returns.

F1, brought to you by the Windmill Inn

In 2014, F1 was in crisis as both Caterham and Marussia went into administration.

The battling team at Caterham looked to crowdfunding to help them compete at the season’s final event, having missed two races.

As a result, the logos of huge brands such as Dell and GE were replaced with the logos of rather more modest outfits.

One of those was Sussex pub the Windmill Inn, whose logo appeared on the Caterham and in the garage.

Even if fans didn’t spot the logo, the pub did get a name-check in pre-race TV coverage – which is something even brewing giant Heineken would struggle to achieve.

Now that’s how you get value for money from F1 sponsorship.