F1 exploring regionalised trackside sponsorship

The commercial team behind F1 wants to expand the business’s income by regionalising trackside sponsorship presentation.

Trackside signage and corporate hospitality typically account for roughly a third of F1’s annual revenue.

However, that income stream is limited by the number of events.

While the sport’s surge in interest globally allows higher prices for signage, other possibilities are being explored to drive that income higher.

“We see a big opportunity in, I call it, the region,” began Brandon Snow, Formula 1’s commercial managing director.

“So North American region view, from my perspective, I look at not only the three races we have in the US, you have Canada, you have Mexico, even Brazil.

“From a timezone perspective, that works very well for regionalisation opportunities.

“We’re really exploring that area of how can we find big, large scale brand partners that might just want to focus on certain regions before they go to a global position.”

Those opportunities can be realised by using technology, with several companies already working in other sports to offer similar opportunities.

“Our ability to put virtual branding into every race, but only seen in certain regions allows us to begin to break things up in a way that we can monetise a region very specifically,” Snow added.

“So every race coming into the market can have a brand but only seen in that region. So we can begin to then look at retail opportunities.

“There’s categories like telecommunications. [It’s] Tough to find a global partner in telecom because it’s regionalised as a business.

“But you can begin to break that up and monetise it and collectively put that together in ways by having technology provided benefits.

“So we’re really spending a lot of time on exploring that.

“You’ll start to see a lot of that from us as we think about not only global opportunities but how we regionalise in such a way that we can scale that helps.”

It’s also a solution to the issue raised by track design and barrier placement, which often limit branding opportunities.

Going forward, the sport can potentially leverage limited opportunities around shorter tracks further or create more where appropriate.

“Traditionally, this is a business that has just sold on ‘how much track do you have, and how many positions can I have?’ noted Snow.

“It has not sold on the quality of the exposure, the quality of what you’re seeing on TV.

“So we’re evolving that entire model to be much more about the quality of the exposure, because we control the cameras, we control the broadcast.

“We know where we’re pointing the cameras, we know the quality of every corner, the quality of every bridge.

“We can put LED rotationals, those types of things that allow us to then go to the market and say ‘hey, look, it’s now about how many positions you have on the track, it’s about the quality of that position and the exposure that you’re going to get in return’.

“And that opens up a big world of opportunity that we can use the track for, beyond just being stuck into this ecosystem of we only have so many square metres that we can actually monetise.”