Enjoy this guest article from Digital Marketeer, Ian Howes. He gives his thoughts on F1’s past and how it’s got us to the current embracing of Digital under Liberty.
Bernie Ecclestone spent 40 years in charge of Formula One. He took it from a gentleman’s sport, enjoyed by thousands at the trackside, to a global commercial giant enjoyed by millions all over the world.
The world was a very different place in the late seventies when he began working on his empire. He successfully steered Formula One into live broadcasts, through international television rights deals, and brought races to countries no-one could have imagined at the beginning. All with huge value deals.
His business was done on a handshake, and the value of each deal was clear and defined. It funded the sport several times over. I think it is fair to say, it also served to give him an affluent lifestyle. This era, and these deals fitted in nicely with the world around them. Businesses could pay for worldwide awareness by paying to have their logos on the cars and by the trackside, in the same way that smaller businesses could gain local awareness by paying to be in the Yellow Pages.
“I just hope that my reputation is of someone who is straightforward, honest and straight down the line, which is different to somebody who is going to screw people—because I haven’t done that. My reputation is worth more to me than money. I’d like to be remembered as the “handshake guy”, the one who did it all on a handshake.” – Bernie Ecclestone
Forty years on, business models and advertising have moved on considerably. Promotion has gone digital, and it is tangible to the Nth degree. Google have built their empire by offering a service for free. The same goes for Facebook, Twitter and numerous other services and social media platforms. They had a long term vision; building an audience by offering the best service for users and not charging for it. Bloggers give insights into their expertise free of charge purely for the value of a link back to their website and Vloggers make an income based on the number of views their videos get. Apps take months to code, and are offered free to users to build an audience to market to. It defies all traditional logic.
The difference between the good old days and modern age world of marketing was becoming increasingly apparent under Ecclestone’s reign. He was continuing to negotiate deals at face value, and the digital world threatened his totalitarian approach. F1 had no official Twitter presence until long after other sports had hopped on board, and the launch of an official Formula One app (at £19.99 per year) showed an extreme naivety to the digital world. F1 videos posted on YouTube were instantly removed on copyright grounds and there was no content posted online anywhere. Even when Formula One teams awoke to social media, they were banned form posting films recorded at the track. Ecclestone saw it all as a threat to his TV rights deals, and that was the backbone to his commercial structure.
Aside from the reluctance to embrace digital, Formula One has been increasingly pressured into justifying its existence by developing technology that will improve the fuel efficiency of road cars. Tighter regulations have restricted innovation, smaller engines have removed the ground shaking noise and tarmac run off areas have all but removed the chance of driver mistakes being punished with retirement. It has all done little to improve the spectacle, and the traditional fans are turning off. It is now the time for Formula One to encourage a new, younger audience. Bernie didn’t value these demographics because they were perceived as less affluent and of little interest to the high-end sponsors associated with the sport. The sport’s legacy had been hidden from them.
Along comes Liberty
The Liberty Media takeover seemed impossible, but it happened, and as of the start of 2017 they have set about making change; an American approach to showmanship and a modern approach to marketing. Bernie has been relieved of his duties, Formula One has a social media community and the connection with the audience has become noticeably improved. Force India, Renault F1 and AMG Mercedes all publicly exchange camaraderie on Twitter that adds an entertainment value beyond the racing. Online gaming is being embraced with a newly launched Esports series, where competitors from all over the world can compete in a live Final at the Abu Dhabi Grand Prix. The winner even gets to be immortalised in the next Formula One game! Most recently it has been announced that fans are going get to vote for their favourite classic race, and the winner will be aired in full on YouTube. Liberty Media are embracing the digital mantra, and offering an element of ‘free’. At the track they have rolled out F1 Experiences – a chance for paying customers and VIPs to sample the speed of a Formula One car in a special two seater version of a 1998 Tyrrell 026. By next year a new updated version is being headed up by experienced technical chief, Mike Gascoyne.
So what could be next?
360 degree filming is being trialed and if successful this could allow viewers to interact and pan around, watching short extracts on smartphones, devices and VR systems. Facebook has supported this type of video for while and Twitter now enables it too. By posting key moments from each race in 360 degree video and sharing them through social media, Liberty could lead the way in digital broadcast. This kind of innovative delivery is something you would expect in the high tech world of F1 and the shares and interaction would take Formula One to a whole new audience, adding extra value to sponsors.
Official Formula One licensing for video games has been very exclusively held by one company for around the last 17 years, and it has been sold at an extreme premium in a similar fashion as the TV rights. For many years, these were held with EA Sports, a super power in the world of video games, but a company that showed little understanding of the sport and did little to appease the purists. For years the game never came out within the season on which it was based, meaning fans never got to drive the current cars of their heroes! This has now been sold on to Codemasters, who do a much better job with it, particularly in the past two years, but the exclusivity may be best left in the past. By having official cars appearing in games such Projects Car 2 or Gran Turismo Sport it would give other creatives a chance at portraying the range of cars and would encourage some healthy competition. Most importantly, it would lead new fans into the sport rather than just appealing to existing fans.
Lastly, I strongly believe that more needs to be done to inspire young children into the world of F1. McLaren’s Tooned series was a great way of connecting with the younger audience, but it quickly faded and after two series’ seems to have been dropped. These children are the fans of tomorrow and with merchandise licensing pricing independent toy makers out of the game for too long, there has been little to connect them. There are a world of possiblities; a F1 review programme aimed at children, animated short stories showcasing the sport’s past heroes or child focussed apps would all serve to give the sport a healthy future.
Without fans there will be no sponsors. And without sponsors the sport cannot fund itself.
It gives me great pleasure to see the change this year and I’m looking forward to seeing where Liberty Media take it next. Extensive market research is taking place at this very moment, and if the answers are acted upon, there could be a very exciting time ahead.