Brawn sponsors won value for money championship

14/02/2010
NEWS STORY

Itaipava isn't a well-known name in Formula One. In fact, the Brazilian beer brand only appeared at one race last year and with one team. However, it was a very crucial race and a very crucial team as its logos appeared on the Brawn cars for the Brazilian Grand Prix when Jenson Button won the word championship. According to the ROI Review of sponsorship exposure value carried out by Formula Money, this gave Itaipava an 853% return on investment - the highest of any F1 sponsor. The mere 320,000 ($500,000) it invested for one race produced exposure worth 2.7m ($4.3m) - more than that obtained by some sponsors, such as Williams' Air Asia and Ferrari's Etihad, which appeared on teams' cars throughout the season.

Unlike traditional TV advertising which provides a defined slot with a tailored message, calculating the exposure for a brand in F1 is a tricky business. Each sponsor shares the screen time with over a hundred other companies and there is no guarantee when and for how long its brand will appear. On a race-by-race basis throughout the season, the ROI Review determined the on-screen media value of every team sponsor with branding on the cars. By using the lap-by-lap performance of each team along with the extent of sponsors' coverage, the Review built up the full picture of global exposure value during 2009. When combined with the team sponsorship values contained in the Formula Money annual report, the two sets of data provide the full picture of sponsors' return on investment in terms of exposure.

To add to Itaipava's success, the brand's owner, Cervejaria Petropolis, also gained a further 510,000 ($800,000) worth of media exposure in the same race from its energy drink brand TNT, which also had a deal with Brawn.

Brawn's one-race deals proved to be the most successful sponsorship vehicles of 2009. After starting the year with an almost blank car, Brawn began to sign one-race deals later in the season once it was able to show companies that their brand would be associated with the best team on the grid. But despite this late start, the deals were hugely effective. The nine sponsors with the best return on investment were all Brawn partners and six of them were single race deals only (see table). Prior to the season no company had shown enough confidence in the team to take out major sponsorship on the car but it turned out to be a shining opportunity that was missed.

This kind of performance will be difficult for the team's sponsors to match in 2010, even if it retains both championships. Following its success last year and its subsequent purchase by Mercedes, the cost of sponsoring the team is believed to have risen sharply. This will make it tough for sponsors to get a high return, although the opportunity for them to dominate the coverage is still there.

In contrast, most of the sponsors with the lowest return on investment were smaller sponsors of Renault and Ferrari, teams charging high fees based on past performance which they failed to live up to in 2009. But it was mostly good news for the sport. Almost a third of sponsors gained media exposure of a higher value than the cost of their sponsorship, and therefore made back their investment from race exposure alone.

The team whose sponsors got the best exposure was McLaren, whose partners attracted 78.1m ($122.6m) compared to 66.9m ($105.1m) for second-placed Toyota. Brawn performed less well in this respect as for most of the season its car was largely empty of branding so the opportunity was missed.

Ironically given Toyota's departure, the best-exposed sponsor of the season was Panasonic, the team's title partner. Although Toyota failed to win any races in its F1 stint its sponsors were certainly making the grade. Panasonic clocked up media exposure worth 60.5m ($95.1m) in 2009 and was the best-exposed sponsor for seven of the 17 races, most of them during the first half of the season when the team was regularly on the podium and seemed to be close to challenging for victory.

In addition to Toyota's early performance levels another factor in Panasonic's success was the large amount of coverage it had on the team's cars which made it instantly recognisable to viewers. It is difficult for smaller sponsors on even the best performing cars to get as much coverage as a title sponsor because the title sponsors' domination of a livery means its branding can be seen even when the car is not at the forefront of TV screens.

The six best-exposed sponsors of the season were all the principal partners of their teams. McLaren title sponsor Vodafone closely followed Panasonic with exposure worth 57.8m ($90.8m) and was also the best exposed sponsor at seven of the races. Both Vodafone and Panasonic drew more than 13% of the total exposure. The next best-exposed sponsor was Renault's title sponsor ING with media exposure worth 29.5m ($46.4m), followed by Marlboro, Kingfisher and Petronas.

Itaipava didn't make the top ten, but it put in an impressive performance nonetheless. Its exposure was valued at 2.7m ($4.3m), making it the 24th best-exposed out of the 78 sponsors with on-car branding, despite only appearing for one race. It is a sure sign of the lost opportunity for a brand to have partnered Brawn and share in its championship glory and shows the value of F1 to brands looking to capture the global audience.

This year Formula Money will be including in the ROI Review a running total of the best exposed sponsors after every race. With sponsorship providing the biggest single source of revenue for the teams these standings could well act as a crystal ball on the future of the sport.

The 10 best media exposure returns in 2009

Sponsor Team Est Media Value
Return on Inv
Itaipava Brawn 2.7m 853%
Qtel Brawn 2.7m 841%
Terminator Salvation Brawn 0.8m 524%
Virgin Group Brawn 15.8m 496%
M I G Brawn 15.1m 474%
Angfa Brawn 577k 454%
Henri Lloyd Brawn 1.1m 361%
TNT Brawn 510k 320%
Canon Brawn 1m 302%
Kingfisher Force India 28.5m 179%

Source: Formula Money ROI Review

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Published: 14/02/2010
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