Formula 1

F1’s New Focus on Regional Trackside Sponsorships

Published

1 month ago

23/04/2023

In a bold move to accelerate revenue growth, the F1 commercial team is shifting gears towards regional trackside sponsorship opportunities. With trackside advertisements and corporate hospitality accounting for a significant portion of F1’s yearly earnings, the organization is keen on exploring innovative ways to maximize income. As global interest in the sport continues to rise, Formula 1’s Commercial Managing Director, Brandon Snow, recognizes the untapped potential of regional markets, particularly in North America.

The F1 commercial team is looking to increase the organization’s revenue by focusing on regional trackside sponsorship opportunities.

Trackside advertisements and corporate hospitality usually contribute to about one-third of F1’s yearly earnings.

Nonetheless, the income generated from these sources is restricted by the number of events held.

As global interest in the sport grows, allowing for higher rates for advertising, additional methods are being investigated to further boost revenues.

Brandon Snow, Formula 1’s Commercial Managing Director, sees significant potential in regional approaches, particularly in the North American market.

He believes that focusing on regional events in the US, Canada, Mexico, and even Brazil offers excellent opportunities for sponsorship, considering their favorable time zones.

The aim is to identify large-scale brand partners that might want to concentrate on specific regions before transitioning to a global presence.

Technology can help to realize these opportunities, as several firms have already adopted similar strategies in other sports.

Virtual branding, visible only in specific regions, allows for a more targeted monetization approach, as explained by Snow.

This method enables races to feature region-specific brands and opens up the possibility of exploring retail and other regional industries, such as telecommunications, which are difficult to find global partners for due to their regional nature.

The use of technology can help break up and monetize regional markets in innovative ways, offering various benefits.

The F1 commercial team is investing significant effort in exploring these possibilities.

In the near future, the focus will be not only on global opportunities but also on regionalization that can be effectively scaled.

This approach also addresses the challenges posed by track design and barrier placement, which often restrict branding options.

The sport can potentially take advantage of limited opportunities on shorter tracks or create new ones as needed.

Snow pointed out that the traditional approach to selling trackside advertising was based on the quantity of available space and positions.

However, the focus is now shifting towards the quality of exposure and visibility on television broadcasts.

Since F1 controls the cameras and broadcasts, they can ensure optimal coverage of every corner and bridge.

With the use of LED rotational signage and other innovative methods, they can offer advertisers a better return on investment based on the quality of the exposure.

This new approach significantly broadens the range of opportunities to monetize track space, moving beyond the limitations of available square meters.