Redefining Media.



Jennifer Lopez, Robbie Williams, John Legend, Pet Shop Boys. Sounds like a lineup for a music festival. Or an MTV awards show. VMAs maybe? No actually, this is the lineup for the upcoming 2014 Formula 1 Singapore Airlines Singapore Grand Prix. Not much to do with Formula 1 racing?

In fact, since the onset of the Singapore Grand Prix in 2008, such fringe activities have always been held alongside the main race. Lady Gaga, Katy Perry, Justin Bieber, Maroon 5, have all graced the stage during the huge motorsport event. Anyone who has been in
attendance during the previous years knows that it’s not just about the race; it’s about the host of activities held in conjunction with it. According to the Singapore Tourism Board, tourist arrivals increase by 40% during this period.

So the big question, are advertisers taking advantage of the buzz from Formula 1 to convey their marketing messages to revelers looking to catch some fast car action?

Short answer is no.

A simple search on the web shows that Singapore Airlines is the title sponsor… and that’s it. The reason for this is two-prong: Brands advertise through other means, and, F1 trademark guidelines make it difficult for non-sponsors to have a presence during the run of events.

Brands Advertise Through Other Means

Since the late 1960s, when commercial considerations permeated the sport, sponsorship liveries have been used so that brands can advertise on the vehicle itself. The figure below (source: Paolo Aversa) shows the costs of advertising on any part of the vehicle. F1 is one
of the most expensive sports to sponsor, with an average cost of between $5 million to $10 million (source: Sports Business Global 2013).

This has been the de facto method of advertising since the 1960s, and is likely to stay as such. It does come with good returns; boasting around 500 million viewers on TV over the course of the whole race season. That’s easily nine months of people looking at Infiniti logos
(NB: title sponsor of the Red Bull Racing team). From March till November such brands would be top of mind at least when being associated with Formula 1.

There seems to be a trend as to what kind of brands sponsor F1: Telecoms makes up 18%, followed close behind by Automotive at 18%, and Fashion comes in at 17%. Since the early 2000s, the European Union has banned the use of branded goods to advertise tobacco,
which explains why Mild Seven, Marlboro, and the like have slowly stopped appearing on F1 cars. Yet this does not bode badly for whoever advertises using such traditional methods; it was announced in January of this year that Infiniti has received over $1 billion in advertising value. That is a good instance of high investment, high returns in advertising.

F1 Trademark Guidelines

The F1 website’s guidance on trademark states that F1’s trademarks aren’t to be used in conjunction with an unauthorized third party brand or logo. Effectively that means, one is not able to advertise unless it is through official means, which tend to be huge investments, as seen above. This is in part what causes apprehension from brands to have a presence during the run of events.

Yes, the returns are tremendous, but more in a long-haul sense rather than hijacking a buzzworthy event, a la Oreo during the Super Bowl or Snickers during Suarez’s World Cup biting incident. It would be extremely difficult for social media monitoring agencies to pick up F1 events beyond the norm, unless it is extremely noteworthy.

Opportunities Abound

So does this mean advertisers should stay away from advertising on F1? Certainly not. Whilst F1’s own advertising guidelines are pretty clear, the beauty of social media is in its virality and speed at which news is broken. And as long as it’s pretty clear that you are not
leveraging F1 to promote your brand, you can still talk about it. And you should. Keep monitoring your social media platforms, for all you know come September 21, the record for most tweets tweeted in a single second might be broken again. With Robbie Williams
coming, we sure can’t rule out something exciting happening.

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