It wasn’t long ago that Formula 1 realized that it had to work hard to defend itself from critics.
Rampaging costs were out of control in Formula 1. The noisy V8 engines were an argument for those who felt it was just a waste of resources, and the sponsors seemed uninterested in a motorsport that suffered from a drop in audience and almost zero social media presence.
However, if we fast-forward a few years to today, things are very different in Formula 1.
The spending cap means the days when F1 was a bottomless money pit are over. With the hybrid era, you’ve been at the forefront of a sustainability push, and audiences have risen, almost certainly helped by the Netflix effect, sparking a gold rush of new backers.
In fact, F1 seems to be reaping the fruits of the proposals agreed between its top leaders, and it seems that a multitude of factors have made it fashionable again.
But what’s especially good for teams is that big companies are eager to spend and join the category, as that ensures that the money that turns the wheels keeps flowing. What has been particularly prominent in recent months has been a new wave of sponsors who have come for a slice of the F1 pie. Not only do they want to take advantage of the reach of Formula 1 to raise awareness of their brand, but they also bring with them valuable products that teams can use.
Cognizant has acquired the title sponsorship from Aston Martin, Oracle has become a major asset at Red Bull and TeamViewer has become Mercedes’ third largest sponsor.
The fact that three big tech companies have joined F1 in just a few months is certainly not a coincidence, and there seems to be some key factors at play in that.
First, F1’s hybrid rules are now perfectly aligned with the demands of the real world, as it has put it at the forefront of both technology and sustainability And with brands looking to be at the forefront of both sectors as well, and F1 draws millions of viewers every other weekend, Mercedes CEO Toto Wolff feels an inevitable magnetism that has drawn the high-tech giants in. to the world of F1.
“I think, first and foremost, F1 represents its historical values, and those are still very high technology, and the best man with the best car wins,” he analyzed.
Mercedes CEO Toto Wolff
“But somehow it has gone from being a gladiator sport to fighter jets with the technology that has come to F1. And add to that also the theme of sustainability that we can be really proud of because of the innovations that we bring to the markets of other industries.”
Speed of delivery is something that has also become attractive to technology sponsors, and on the other hand, technology from major companies can accelerate our own performance. So it is no longer just based on a sticker on the car. but on a really credible joint mission. All recent high-tech sponsor announcements involve teams using new technologies and ideas. Aston Martin will use Cognizant to improve its IT infrastructure, Mercedes is looking for a step forward with augmented reality with TeamViewer while Red Bull is looking for more elements of artificial intelligence and machine learning with Oracle.
Since data is so important in F1, technology has become an obvious battlefield where the team with the best way to operate can have an advantage.
As Red Bull team boss Christian Horner put it “Data and the way we operate are our lifeblood. We generate a lot of that and it affects everything we do: the way we run a race, the way we develop a car, the way we even analyze the drivers and select our lineup “F1 has evolved and the days of tobacco companies are over, and now there are even fewer equipment manufacturers involved. F1 is very, very on the cutting edge of technology, it is cutting edge technology, and it’s great to see these technical partnerships. And one of the biggest fish that goes into the pond has to be Oracle.
The way F1 is spread across such a broad technological spectrum is something that stands out for remote access software giant TeamViewer which announced its alliance with Mercedes shortly after confirming that it will be the new sponsor on the F1 jersey. Historic Manchester United football club CEO Oliver Steil is clear that F1 is not a one-dimensional sport, but rather offers a platform to use its products in many ways.
“I think the real appeal of F1 as a sport lies in the multitude of use cases,” he says. “And I think that is what attracts technology companies, because it is the manufacturing, its design, its logistics, its monitoring, its analysis. So the variety of use cases and the application that is possible in Formula 1 it’s very, very prominent. However, despite the link between F1’s high-tech “fighter jets” and technology companies, there would not be such a great partnership were it not for the fact that F1 is enjoying a surge in popularity.
The record numbers enjoyed by many channels for the season premiere at the Bahrain GP show that there is great interest right now, and the importance of Netflix’s Drive to Survive series cannot be ignored.
Oracle’s chief marketing officer, Ariel Kelman, sees a direct line between the impact Netflix has had and the recent addition of large American backers.
“Personally, I have seen a huge increase in enthusiasm around Formula 1 in the United States, so it makes sense that American technology companies want to get involved in a much deeper way”
Ariel Kelman
“Being good with data, analytics and machine learning is really a core task of all Formula 1 teams today. So we have that combination that F1 is a great platform to promote very sophisticated uses of technology, already in turn, it is a sport where the audience is growing a lot now, especially in the United States. And it has grown for various reasons, including the Netflix phenomenon.
“So I think we will see more technology companies start looking at F1 as a big part of their strategy.”
It is also important to note that F1 is attracting sponsor interest because it is a global sport with tremendous reach.
Beyond big-name companies like Cognizant, Oracle, and TeamViewer, there has been a wave of lesser-known brands that have made that leap to enter F1 as well recently, from cybersecurity companies like Herjavec to crypto exchanges.
For McLaren CEO Zak Brown who has spent much of his career signing endorsement deals, F1’s ability to reach out to fans remains one of its main strengths.
“One of the trends that we are seeing in F1 with the appearance of new technologies, new countries and new companies is that they use it as a great platform to, as we say, become famous quickly,” he explains.
“Some of the most famous companies don’t need to publicize their brand. They want the content that the sport and the drivers create.”
“So if you look at some of our newer partners, like Darktrace, these are fast-moving, fast-growing companies that need a global platform to shed light on their business and its capabilities.”
“You can do it through traditional means, but it is quite expensive. So if you consider that F1 is shown every two weeks to a couple hundred countries and hundreds and millions of viewers, it’s a very efficient way to get a lot of attention to your company very quickly. For F1 as a whole, what it is offering at the moment is a winning combination for the high-tech industries.