I had the pleasure of discussing Motorsport sponsorship with James Parrish and he was kind enough to answer a questions about this aspect of motorsports especially in F1, which a very few people know about.
Most people enjoy the glitz and glamour of the visible side of F1 i.e. racing, journalism, hospitality; why did you choose to go into Motorsports sponsorship, particularly F1 sponsorship?
My story will be slightly different from in the industry. I was attracted to motorsport but when I left school I wanted to be a race engineer. I went to university to study Motorsport Management and Logistics as – should things not work out – I would have a back-up as management and logistics is important in most walks of life. Whilst at university I found that I most enjoyed the business and marketing modules and this led me to researching the possibilities in motorsport business. As interest grew I selected the marketing of sponsorships (focusing on PR) for my dissertation. I really loved this! I then begun applying for jobs thinking that I would work my way up from account management to sponsorship sales – however I struck gold and was interviewed for my current role in sponsorship prospecting.
The most important thing I have learnt is to surround yourself with people with similar values to yourself.
With so many new names choosing to associate themselves with F1 (e.g. Coca-Cola/Burn with Lotus, Blackberry with Mercedes etc), is there a danger that too many sponsors and money will kill smaller teams. And in your opinion, what can smaller teams do to maintain their place in the sport?
I don’t think there will ever be too many sponsors – many fans think the only sponsors in the sport are the brands on the car, when in fact that accounts for only around 30% of the businesses involved. Added to this, there is only a limited amount of space on the cars. Smaller teams are struggling at the moment – both Caterham and Marussia have paid drivers this year. However they can survive if they create a strong commercial proposition – neither are going to gain a significant amount of TV coverage, so alternative strategies are to be more available to the media and create partnerships based on business development.
To the outsider, Sponsorship agents are effectively Sales-people: is this a fair statement? If not, how do they differ from one another?
Sponsorship agents are sales people, so that is entirely fair however there are as many types of sponsorship sales people as there are in other industries. Personally when I am researching a business to approach, I am not thinking, what can I sell them! I am thinking what are their issues, their objectives, what can I help them achieve? The agency I work for, Rush Sports Marketing work in partnership with businesses, we aim to understand the business inside-out and develop a proposal that can help the business reach its objectives – either for the short-term or the mid-term. We look to develop a long-term relationship with the business and are not after the quick buck.
In your opinion, is the Sponsorship Agency market competitive i.e. are there too many agencies “chasing” the same deals? Some teams have their own in-house sponsorship managers or Commercial Coordinators, so do you find that some deals are harder to seal as we are experiencing a global financial recession or do you think F1 is virtually immune from this?
The sponsorship market is a competitive market. In terms of F1, every team has dedicated sponsorship sales-people but in terms of agencies there are only 4-5 that secure sponsorship rights. There are many that manage sponsorships, but have no involvement in securing a brand into the sport. The market is competitive and that stems from there being so many teams in so many sports looking for sponsorship.
The F1 broadcasting rights in the UK are now shared between BBC & Sky: do you think the reduction in viewers (who cant afford Pay-Per-View or choose not to subscribe for other reasons), will affect sponsorship deals? For instance, if I were an investor and I know only a small fraction of fans would be watching races and seeing my logos, I would be more selective about who I invested in.
Viewing figures in the UK have dropped since the Sky / BBC broadcast split – down from 32.4m to 28.5m – however F1 has an extremely loyal following in the UK – most watch at least 8-10 events per year. Having watched the Sky coverage though, it also provides more opportunity – through increased broadcasting through the week – to get your brand noticed and engage fans.
What is the most effective metric for F1 Sponsorship campaigns? I know you are a fan of ROO but what are its merits over ROI or other metrics?
I am a big fan of ROO; it is extremely hard in some instances to place a value on some measurements. ROO allows you to measure against business targets, then if you so wish a monetary figure could be placed on that objective. Take Hilton for example, their sponsorship has allowed the business to develop extremely close relationships with the largest luxury brands, TAG, Hugo Boss etc. If the business wanted to, it could value the benefits derived from those relationships numerically against the sponsorship investment. This wouldn’t mean anything if the sponsorship was measured by ROI.
And finally, anyone looking for a career in this sector, what advice would you give them?
Anyone looking to start a career in sports sponsorship should keep up to date with the latest news – and I don’t just mean motorsport news – I spend more than 10-15hrs a week reading the business sections of newspapers, magazines etc. It is extremely hard to secure a role in the industry – there are probably 25-40 people in F1 specific sales roles and around 300 in sponsorship management (in the UK). I would also say attention to detail and marketing & business strategy knowledge is extremely important.
If you have any comments or questions about this blog, please leave a comment or tweet James at @JPazza222