Making sponsorship count in the crowded field of F1

In the recently released film F1: The Movie, the livery of Brad Pitt’s fictional Formula 1 team is emblazoned with the logos of real brands.

Alongside long-standing motorsport sponsors, such as AMG and MSC Cruises, newcomers, including Expensify and SharkNinja, have taken the opportunity to back a fictional F1 team rather than a real one.

Their decision points to just how crowded the sport’s sponsorship landscape has become. F1 has experienced a “catapult forward commercially,” explains Robin Fenwick, chief executive of sports marketing agency Right Formula.

This is the result of a push by Liberty Media, part of US billionaire John Malone’s empire, since acquiring F1 in 2017, to expand the sport into new markets, growing the fan base to 750mn globally. One of the main catalysts has been the huge success of the Netflix docuseries Formula 1: Drive to Survive, which F1 hopes to emulate with the new film.

Between 2019 and 2024, Liberty Media says F1 series’ annual sponsorship revenue more than doubled to $636mn. At a team level, total sponsorship revenue increased by 60 per cent to $1.3bn over the same period, according to Nielsen Sports.

The sport is bigger than it has ever been in its 75-year history, and everyone wants a slice. But how can sponsors stand out and justify the cost when demand is so high?

“There are so many different routes into Formula 1,” explains Camilla Hessey, motorsport head at sports agency Octagon. Brands can sponsor the overall series, which offers the greatest reach, she adds, or individual teams, or drivers, or a combination of them.

The teams’ distinct personalities can be a big draw for sponsors. Heineken began sponsoring Red Bull in 2017, just a year after the Dutch brewer started its long-standing, series-level partnership with F1. The deal with the team is effective because both are non-premium brands in a sport dominated by luxury car manufacturers, says Hessey, who has previously worked for both. “Looking up and down the grid at the time, they wouldn’t have sat anywhere else.”

Similarly, Mike Cannon-Brookes, co-founder of software developer Atlassian, which is Williams’ title partner, told the FT earlier this year that he was attracted to the historic British team by the potential for a “turnaround story” that would showcase his company’s technological prowess.

In turn, many B2B brands are more interested in targeting their fellow sponsors than F1’s external audience. McLaren has more than 50 partners — around double that of other teams, which Fenwick says creates an “exclusive club” that offers unique networking opportunities for brands like Medallia, a management software provider, which is one of his clients.

The brands that stand out best are those that think about their aims and target audiences, and how to meet them, he adds: “You wouldn’t go and build a house without the architect’s plans. So why would you go into a sponsorship without a plan of action?”

Once a deal is signed, the promotional activities kick in, whether through content creation for social media or in-person fan experiences and product placement at a Grand Prix.

Some brands take an imaginative approach. At the Miami race weekend earlier this year, the drivers drove around the track in life-size Lego race cars, after the championship announced its partnership with the Danish toymaker in 2024.

Tapping into F1’s growing younger audience base, many of whom engage heavily with the sport through videos on social media and drivers’ personalities, footage of the Lego cars is among the most-viewed F1 content ever on TikTok.

LVMH, which is in the first year of a decade-long deal to sponsor the overall series worth almost €100mn annually, offers another model for the advertising opportunities in F1. Products made by some of the luxury group’s main brands — fashion house Louis Vuitton, watchmaker Tag Heuer, and drinks division Moët Hennessy — are everywhere to be seen at a GP.

Mass market consumer brands have also flocked to F1, most recently PepsiCo in May, joining McDonald’s and Nestle’s KitKat. This range brings both opportunities and risks in terms of brand awareness, Hessey warns, highlighting the incongruity of LVMH’s maisons occupying the same space as PepsiCo’s crisp brands. “You have a Louis Vuitton bag, and then suddenly you have Doritos popping out of it.”

More practically, the sheer number of sponsors now in the sport means “there are not a huge amount of gaps” for new entrants. Instead, she says companies should look at other F1-related series. “I think it’s important that we do cast the net wider,” Hessey says, pointing to the commercial appeal of the all-female F1 Academy, or motorcycle racing championship MotoGP, recently acquired by Liberty Media.

Nonetheless, she sees no sign of F1’s commercial potential slowing down. “The commitment of these brands, the money they are spending, and the length of time, really speaks volumes to where this sport is going.”

Fenwick agrees: “Formula 1 is genuinely unique . . . It is, in my opinion, without a doubt, the most commercially attractive sport that a brand could partner with.”