Why branding is so important in Formula 1

Branding is important to attract sponsors and gain fans; a few teams could certainly benefit from better marketing and livery choices.
Saturday, July 20, 2013

July 20th, 2013 (F1plus/R Baillie/G. Roche).- F1 has struggled financially for a few years now and has seen the loss of a few circuits from the calendar and saw the loss of HRT from the sport at the end of the 2012 season.

More recently Sauber found themselves in financial difficulty though the Swiss team recently announced that they had formed a partnership between Investment Cooperation International Fund, the State Fund of Development of North-West Russian Federation and the National Institute of Aviation Technologies.

Of course they aren’t the only team struggling financially, as teams will spend more money than they have to keep developing the car in the hope that it pays off and they receive a big chunk of prize money at the end of the season.

As a fan it’s quite easy to forget about the financial side of the sport and it’s easy to forget that the teams are actually selling something; space on their car.

Which brings us to marketing and whether some teams are doing enough to create a standout brand that people want to get involved with.

Think about the teams at the front of the grid; Ferrari, Red Bull, Lotus and Mercedes. Their cars are striking, stand out on track and they’ve developed a great brand to go alongside it. In fact even the Caterhams at the back of the grid look great and feature a distinct brand.

Some of the cars in the midfield though are a little less striking and their brand isn’t quite as strong. Their livery choices aren’t as exciting and it can be hard to make sponsors logos stand out on the car.

Take the dark grey Sauber, sure it makes the C32 look more appealing than the black and white livery they used during the past two years, but it’s still not exciting or striking.

Another example is the deceased HRT which had that lifeless gold and cream livery and a website which screamed lack of effort. This “message” can be projected to the track, and since results were never there, well, its demise it was written in big letters.

Interestingly, a big team such as Mercedes does not seem to care much about their online presence, as its web site could do with an update/revision, while boosting its webstore and social reach.

The opposite can be said about Red Bull, McLaren and Lotus that lead the field not only in the track but also in their online effort with impressive web sites, their massive social reach and engagement level, plus the obvious appeal of their overall branding in the form of clothing, car livery, etc.

Ferrari is probably the strongest brand on the grid given its extremely solid roots and a fan base that is equally supported by the teams marketing team.

Sponsors look at many factors before they reach a decision about supporting a team and pouring money to it, performance and branding will probably be the two key ones.

Performance. Very simple, the better your team does the more media time will get, which in turn brings more audience. Not to mention that it is better to be associated with a winning team than a backmarker that is followed with more negative discussions.

Branding. A strong presence and well-conceived marketing strategy increases reach, which is the ultimate goal. By being appealing you lure people who want to be associated with the ‘cool’ teams or drivers.

Lotus has done a remarkable job by bringing back 70s livery and working very well from the marketing  and social side. 

There also some teams who are doing a good job in both areas and are growing. Force India has done well; the team continues to gain fans and has a strong sponsor base. If the team keeps with the upward trend in terms of performance, things can only get better.

But again, isn’t surprising to see smaller teams struggling to project that ‘cool’ image as they have less money and resources and will without a doubt pour as much money into their car as possible in the hope that it helps them move through the field, so branding perhaps takes a backseat.

While the sponsors won’t put up with the team performing poorly for years, they’re realistic and understand that a team won’t go from newcomers to title competitors in the space of three or four years, so performance won’t put them off.

For the most part humans are materialistic; this is never made clearer than our willingness to pay slightly more for something if it looks better than similar products. A great example of this is Apple products; while more expensive than competitors and sometimes not as good as similar products, people are willing to pay more for the look.

If the teams have great branding behind them and a brilliant looking car it’s certainly going to help them attract sponsors, even if their car isn’t competing with Red Bull.

Of course great marketing and branding isn’t going to mean teams suddenly get a lot of interest, like any other industry advertising has taken a hit and decisions are more carefully made.

When it comes to money though no matter how great the car looks, it’s not going to convince someone to part with money they don’t want to spend, however great marketing could intrigue more businesses meaning teams have more chance of acquiring more sponsors.

Other factors will come into play too, for example Vodafone announced earlier this year that they no longer felt they needed to sponsor a F1 team anymore and would end their sponsorship deal with McLaren at the end of the season.

Following Sergio Perez’s move to McLaren, it was rumored that TELMEX would take over Vodafone as a title sponsor. It would be a great opportunity to help them increase their reach and expand, basically it would make them global brand.

By being a truly a global sport, Formula 1 allows sponsors and partners to gain exposure, increase reach beyond their current boundaries, which of course, boost brand awareness and ultimately, brings more business.

In order to try and attract more sponsors and partners though, some teams need to put more focus on branding. While it’s not the magic answer to all of their problems it really could help, after all, one penny can mean the difference between breaking even and not.

The bottom line for teams is that unless they have the funding necessary they won’t reach the end of the season and will have to call it quits.

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