An insight into Formula One for 2013 – Zak Brown

In just the first three races of 2013, the sport of Formula One has lived up to the usual promise of drama, excitement, political intrigue and human interest, and looks set to be another firecracker of a season. Similarly activity in the business of F1 has been fast-paced and promising, with five global brands entering high-profile sponsorship agreements and a global reach that continues to evolve into new and emerging markets (such as Russia and possibly Mexico and Thailand). The F1 landscape continues to adapt, providing new opportunities for corporations and brands.

The New Year brought a slew of announcements for new global partners and team sponsors of Formula One, including Rolex, Blackberry, UPS, Emirates and Experian. This winter has been one of the best in the past decade from a commercial point of view and the entry of these leading global brands speaks to the health, versatility and global reach of the sport. The variety of brands entering F1 is impressive, with the FMCG and CPG categories well represented along with luxury consumer brands and financial services.

F1 has been gravitating towards BRIC and the developing markets in order to increase the strength and stability of the sport, reflecting the geo-economic shift. This is one reason for such significant new interest in Formula One. As a tool for brands to reach a global audience, the breadth of F1’s reach has been instrumental in the sport’s continued success and sustainability in tough economic climates.

Inevitably, bigger teams attract bigger sponsors, which often leave the less successful teams having to fight much harder to stay buoyant. When the Concorde Agreement is finalised, the stress between the FIA, teams and rights-holder will diminish, allowing lower-budget teams more breathing room.

The dominance of NASCAR and the ‘Big Four’ sports in North America – NFL, NBA, MLB and NHL – guide traditional media content and fan awareness. Historically this has acted as a barrier to the penetration and expansion of international sports in the market. However, with NBC’s multi-year broadcasting agreement with F1, plans for another US race to be added in the future, and a plethora of US-based sponsors showing interest, F1’s outlook in the North American market is improving.

The build up to F1 re-entering the US market culminated at The Circuit of the Americas in Austin, Texas late last year, which was a considerable success quantified by the number of fans in attendance and overall slick organisation of the event.

Now that the 2013 season has started, there are a few key stories that are worth keeping an eye on. Lewis Hamilton is a big story; the veteran McLaren driver’s move to Mercedes has already seen success after the season’s first few races, placing fifth in Australia and third in Malaysia and China. His three-year contract allows him to leverage external sponsorships and his own personal brand through the Mercedes-Benz global network. It will be interesting to follow his achievements this year due to the risk he took signing with Mercedes; it could go either way making for an exciting watch.

Secondly, it’s only three races into the season but from the looks of it Ferrari and Red Bull are strong and Lotus and Mercedes are in the hunt while McLaren will regain form. This could also be a year for the underdog in Formula One to determine key race results and therefore championship standings. This kind of change is indicative of the unpredictable nature of F1; it makes it interesting for sponsors to choose the right team as a vehicle for their brands, increasing the importance of data and analytics, an area we have increased our investment in as an agency to complement our digital team.

Lastly, the change of equity ownership of Formula One could see the return of 2012’s postponed IPO in late 2013 on the Singapore Stock Exchange SGX. This, in turn, should open up other opportunities for growth. Although the Formula One landscape is complex, the excitement and unpredictability of the sport makes it transcendent and attractive to sponsors and fans, seen through its broadening reach into developing and key markets.

I expect  another thrilling year of F1, considering an expanding global sponsor portfolio and emerging market exposure; promising new significant demographics that encourage the sport to self evaluate and evolve on both the racing and commercial sides. Although it’s too early in the year to predict a winner, I will certainly be enjoying the dramatic, exciting journey to the Formula One World Championship.

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American Zak Brown has a passion for motorsport – as Founder & CEO of JMI (Just Marketing International), the world’s largest motorsport agency, he is a sponsorship expert, team owner, driver and collector. He operates at a global level, with an enviable track record for raising more motorsports sponsorship within Formula 1 and NASCAR in the modern era than any other agency.

His racing team, United Autosports, now partners with McLaren and Audi, and attracts world class drivers, making it one of the most successful new sports-car teams of recent years with multiple race wins and numerous podiums since its debut in 2009.

As an agency founder and team owner, Zak possesses the network, experience and knowledge to help anyone interested in the sponsorship or commercial aspects of motorsport and business.

As an authority on marketing in the world of motorsports, Zak’s list of accomplishments have resulted in multiple awards. He is a regular contributor to Forbes Magazine, Financial Times, SportsPro, USA Today, the Wall Street Journal, and the Sports Business Journal.

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