Ahead of the 2022 BlackBook Motorsport Forum, we sat down with SportsPro Media as part of their agency roundtable series to share our thoughts on the state of sponsorship.
How would you assess the overall health of the motorsports sponsorship market?
The motorsports sponsorship market is extremely healthy. The first half of 2022 has showcased a wide range of new deals, new extensions, new partnerships, capital investments and more cross-promotion than in recent years. The number of technical partnerships continues to be the foundation for exciting marketing agreements that have come on line as well.
Many of those technical partnerships have positive externalities for the entire marketplace outside of motorsports - such as 100% sustainable fuel development, single-use plastic elimination, safety enhancements and many more.
The cost of entry to modern sponsorships has dropped considerably as more flexibility is built into the system. Brands are no longer required to sign multi-year arrangements right from the start. The most successful programs still end up there but the new flexibility has allowed more brands to explore the opportunities sponsorship provides with less commitment.
Of course, there have been brands to depart motorsport, but those appear to be far fewer than new entrants.
What is motorsport lacking and what can it learn from other industries?
Motorsport is still missing its “World Cup” event where an overwhelmingly large portion of the mainstream stops and watches - even if they have zero interest in the sport throughout the regular year. Other industries have made their offerings much more engrained in cultural and mainstream activities.
Motorsports has made positive strides in that direction, but since motorsports affect the mainstream consumer more than they realize, there is still room for improvement.
What are the major challenges and opportunities facing brands/buyers and rights holders/sellers within motorsport?
Motorsport has a unique opportunity to integrate and share audiences more than other industries. There are multiple globally-recognized, professional motorsports series across different disciplines. The US market is particularly well-positioned for brands to take advantage of this.
For example, you don’t see multiple professional US-style football sanctioning bodies. If your brand is interested in US football, you will be attracted to the NFL. However, if your brand is interested in US motorsport, you can choose from NASCAR, INDYCAR, F1, IMSA, NHRA and many others. Each of those motorsport properties provides different value and access to different audiences but there is a common thread linking them.
That creates a challenge for all parties to set aside constant competition, and instead look for ways to introduce each other’s audiences to each other’s sports through collaboration. We believe the brands with assets in multiple disciplines are positioned to bridge this gap with the right activation.
Who’s doing the most impressive work in terms of marketing creativity?
There is amazing talent across the board from brands to properties to sanctioning bodies to agencies. The pace of innovation in motorsport is second to none.
Ally Financial across NASCAR, INDYCAR, IMSA and Sprint Cars have been wonderful to watch grow over the last couple of years. The program has been well-executed and organically expanded with some great campaigns. They have built up equity with a strategic mix of drivers, teams and venues that provide a valuable asset mix to activate all year long.
Wendy’s, in partnership with DoorDash, executed something brilliant at NASCAR’s Daytona 500 this year. They built a pop-up restaurant in the middle of the infield area of the race track where people could pick up their newest sandwich that included a DoorDash discount voucher to use on your next purchase.
The best part? They had a drive-through window for the golf carts and the food was piping hot.
In what ways is the role of the sponsorship agency within the motorsport industry evolving today?
The role of the sponsorship agency has become much more than simply handling footprints and hospitality onsite. The sponsorship agency has become a central hub of marketing and revenue-generating activities for its clients. Because revenue-generating arms of businesses are often the ones to leverage sponsorship assets, the agency has the opportunity to integrate disparate business units to create new value.
This provides obvious value to the brand the agencies represent, but also to the properties their clients are sponsoring because this kind of success leads to longer, more sustainable partnerships.
How do you expect the motorsport sponsorship business to evolve in the coming years regarding areas like sales, new categories, on-site activation, ROI measurement, and market growth?
The business will evolve with a focus on efficiency.
From environmentally sustainable footprints to increased efficiency with resources, the current demands of sponsorship require efficiency. You will start to see decisions made to benefit increased efficiency more than just for increased impressions, or whatever the chosen vanity metric is.
Efficiency will come on the budget side when brands activate more by integrating their sponsorship inventory with their existing marketing campaigns that are already running.
Sponsorships may rely less on vanity metrics because they have been diluted in value recently. There seems to be a gap between how consumers watch live sport and how that viewership is reported. This has come partly from the shift to streaming, emerging OTT platforms and multi-device viewing. This has left the industry without a single source of accurate reporting on all of that, so there can’t really be a single metric everyone can equally compare to.
We expect (and encourage) brands to rely more on customized ROI reporting that closely tracks to their objectives rather than a blanket metric.