Things to consider when investing in motorsports: Part 2

November 20, 2017 / by Kyle Richert

After part 1 was published a few weeks ago, a number of colleagues reached out and asked about specific series’ that weren't mentioned. Our hope is to cover every pinnacle-level racing series through a sequence of blog posts. There is no order of importance because I believe every form of motorsport has potential for growth and investment opportunities.

So, let’s recap part 1. Millennials and Gen Z are the most relevant demographics for Global RallyCross (GRC), Boomers with extra spending cash remain strong in Sports Car racing and IndyCar is currently playing on both ends of the spectrum as it remains popular with Boomers, yet is shifting to attract more Millennials. 

In part 2, I am going to keep with the theme of three series per blog and stick to my promise of discussing NASCAR, Formula 1 and Formula E.

Looking for the most brand-loyal marketplace?NASCAR.jpg

When you think of motorsports, especially in the United States, I have to believe the first thing that pops into your head is NASCAR. NASCAR has been the gold standard for motorsports in the U.S. for decades and continues to lead the way in a number of KPIs, including TV ratings and event attendance. NASCAR is so popular that it tends to be measured against the big four “stick & ball” sports, such as the NFL, NBA, MLB, NHL. For the most part, it holds its own and has for a long, long time.

How, you ask?

Well, it starts and ends with their fans. NASCAR has an All-American, mostly middleclass fan base that will spend their money on the products of brands that participate in the series. They are probably the most brand-loyal demographic of fan in SPORTS, not just motorsports. I would love to know how many Mountain Dews have been sold since that guy blew his “Dale Call” and the 88 spooked thousands of ducks. Mountain Dew, an all-American brand, Dale Earnhardt Jr., an All-American athlete and hunting, an All-American pastime. They probably sold Dew by the truckload. So, what do you want to sell in NASCAR? 

Want your brand in the highest level of motorsport?F1.jpg

Since the 50s, Formula 1 (F1) has been the pinnacle level of motorsport in the world. With hundred million dollar cars, exotic brands and the world’s best drivers, combined with blistering corner speeds and sweet, sweet engine sounds, there’s nothing better to a car guru. However, all that glamour does come with a very high price tag if you want to be a sponsor in F1. Just a logo on the engine cover of the Scuderia Ferrari could cost you millions. After spending that much for a simple logo placement, how much will you have in your activation budget? Surely, you would want to bring some of your clients to the track, wine and dine them and showoff your brand (that’s placed ever so nicely) on Sebastian Vettel’s car. 

Similar to NASCAR, F1 fans are also very brand loyal. So, although the investment to get into F1 is a bit higher, your brand will still be exposed to millions of enthusiasts on a global level.

Another added bonus if you’re looking at getting involved in F1, is that the sport has become more accessible than ever. In the past, F1 was always viewed as exclusive and only for the elite, but the recent acquisition by Liberty Media, who have a strategy of making the sport more accessible, may open the doors to some brands. If you’re looking at getting into a very well-established and polished series that has an international presence, then F1 may be for you.

Or are you looking to get into something on the rise?FE.jpg

If there is any series that I was more skeptical of in its early years, it was Formula E (FE). I thought there’s no way that this series is going to work. I understand the concept with crossing pinnacle-level and global formula racing with no / low emission power plants, but there’s no way that the people will show up to watch it, or the honeymoon stage won’t last long. I was wrong. Dead wrong.

Sure, I’m a motorsport purist whose draw to motorsports is the sights, sounds and smells of the racetrack. These things are what I thought would be the demise of FE, but most people don’t seem to care, especially manufacturers and corporate brands. Performance / luxury manufacturers like Audi, Jaguar and BMW and international brands like Panasonic, MS Amlin and Julius Bar have gone all-in on FE and I don’t see the series slowing down at all. There was also a race in New York City last year, the noisiest city in the states…who would have thought?

As the world of motorsport moves closer to zero-emissions racing and consumers invest more into electric vehicles like Tesla, I believe FE will only get stronger. You will no doubt see other manufacturers get involved over the next few years and the sky is the limit for corporate sponsorship. If there’s one thing that FE has that traditional motorsport doesn't, it’s peace and quiet at the racetrack. Perfect for entertaining clients and prospects up close to the action without earplugs and yelling. I didn’t realize how much of a selling factor that is and will continue to be.

In closing, I hope this blog helps you narrow down what series you want to invest your marketing dollars in. If not, we at CHARGE have the knowledge and expertise in motorsports to help you. If you have any motorsport / sponsorship questions or just want to chat racing, feel free to reach out at krichert@chargegf.com.

Oh, and stay tuned for part 3!

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