The $7 billion world of motorsports marketing is challenging, rich and intensely exciting. Some of the largest brands in the world have built their presence from simple grassroots programs to dynamic, multi-series dynasties. From the outside looking in, they make it look easy. But it can quickly become overwhelming for marketing managers, executives, and those interested in working with motorsports sponsorship programs to market their business without the right know-how and support in your corner.

Keys to success

Straight away, there are some major points to return to throughout the process. If ever you feel lost along the way, think back to these three principles. They will be there as a foundation for everything else that will come up.

1. Sponsorship programs must stay strategic, constantly examining what you are trying to accomplish or solve through the platform.

2. Sponsorship programs must generate a business result, a metric increase and quantifiable growth in your core operation. In today's marketplace, sponsorships have become more of a B2B and technical partnership than anything else.

3. Prioritize the activation budget over the property budget. Even if you have the greatest property in the world, you will not see the return you are looking for if you do not invest in activation. Spend $2 on activation for every $1 spent on a property to extract maximum value.

With those principles firmly in mind, another step is breaking the myth that all motorsports marketing or sponsorship programs require a multi-million dollar budget. That is far from the reality of the opportunities available. Some of our most effective and successful programs are centered around targeted, highly efficient grassroots programs. So no matter your budget, this platform is worth exploring to excite your marketing and bolster your marketing strategy.

Do you know the difference between sponsorship rights and activation?

What sounds like a simple difference in wording is the most important distinction in this discussion. As digital media continues to command more attention and marketing dollars, there have been some important changes to traditional approaches to sports and entertainment. To maximize the value for your brand, the key is finding the balance of investment between sponsorship rights and brand activation programs.

Sponsorship rights are what you bought
Sponsorship rights is access to advertising that seeks to establish a deeper association and integration between an advertiser and a publisher.

Sponsorship activation is what you do with what you bought
Sponsorship activation is a marketing term used to indicate a corporate sponsor’s intention to independently promote and advertise its involvement with a particular marketing asset.

Sometimes this part can feel like "chicken or the egg," without knowing what needs to come first. To determine what rights make the most sense for your brand to acquire, it is best to understand your end objectives from the beginning.

Once you have the combination of known end objectives + sponsorship rights, you can begin to build activation programs designed to use the rights to accomplish the objectives.

Where do you start?

How you start is equally as important as where you start. Because of the flexibility in the performance world, you can start small and grow toward the results. This allows you to follow or even get ahead of ever-changing consumer behavior. This approach will limit risk and ensure you constantly extract value from your activities.

The actual starting point has succeeded in various ways depending on your objectives. It is one of those situations where there are so many different options and channels for you to consider that you may feel stuck in a decision-freezing state of not knowing what is best for your objectives. That is not something for you to feel bad about. That is common and in fact, normal.

You'd be surprised at what a solid knowledge base can do for you as you begin your journey or look for fresh opportunities. Starting can be as simple as identifying the business objectives you want to solve for, grow, or promote. From there, you begin to identify available properties that match those goals. Sometimes it might be sponsoring an individual driver and sometimes it means sponsoring an entire series.

All the time, however, it means finding the right mix that suits your needs. By diversifying, you open yourself to broader exposure and brand activation opportunities. This concept will lead you to the next question.

Have you considered all that is available?

The question "where do I start?" battles with the question "what can I do?" and your goal will be to find the equilibrium between those two for the ultimate program. Speaking with an objective expert in the space will help give you an idea of the different things you can do, but there is everything from the simple to the dynamic in terms of activation.

While a large budget certainly gives you options, it doesn't guarantee success. Sponsorship shines when you constantly aim for sustainable value, which means strategic investments rather than flashy stunts.

When you create nimble and flexible programs from the start, you can appropriately tailor them to the marketplace changes. To do this well, start small and grow into the results by constantly keeping tabs on your inventory of assets.

Common challenges & need to know

The world of motorsports marketing can be a tricky one to navigate. There are many different dynamics, opportunities, and flexibility in what you can do to succeed. That is why brands invest billions of dollars yearly to engage their customers through the platform. Of course, all of those ups don't come for free. There are some foundational challenges that you must be aware of and prepare for.

Sponsorship activation has its own language and as a brand, properties might try and "woo" you with fancy terms that can take your hands off the wheel. Your first step in preparing for your work here is to know the fundamentals of generating sustainable ROI through your sponsorship program.

The 5 most common pitfalls

After brushing up on some of the foundational elements of what goes into your programs, you want to prepare further by avoiding the most common pitfalls of sponsorship programs. There is a reason why these are the most common challenges: they are easy to arrive at if you don't remember those three keys to success at the top of this guide.

Going about your program in a wishful manner, nine times out of 10, will end up in one of these five pitfalls.

1. Brands expect the property to do all the activation

The teams, series and tracks are looking for sponsors to fund their operating requirements. Their purpose is not to activate for you, but a good partner will want to activate with you. You can’t rely on a race team or track to manage a portfolio of activation that holds you and your brand as a priority.

A team's priority is their ability to perform on the track. We believe that is how it should be. Without them prioritizing competition, the show and the entire platform will suffer. You are responsible for activating the assets you have in place for maximum ROI.

2. Choosing a sponsorship solution before identifying your business objectives

Many brands buy into a sponsorship program without understanding how it would support their business objectives. Think about your brand objectives first, then look for properties that fit as a platform to address these objectives. The stronger you can connect your sponsorship activation to your business results, the more success you will have with a sustainable program.

3. Program complacency

Many sponsorships run for years and tend to become stale. The biggest challenge is to generate exciting ways to activate and build value for your customers. Once you set an activation strategy, return to it each year to ensure you are getting results. If the results start to fall off, it doesn’t mean you have to ditch the whole program. It just means you might want to try a fresh asset mix, an updated activation strategy or a new direction.

4. Going at it alone

Motorsports are glamorous and high profile. Many managers make decisions and align with whatever keeps that connection. You may not know how the different assets could be or should be used to extract maximum value. This artificially limits the potential of your program and makes it difficult for it to grow. Lean on expertise to get you going on the right path.

5. Spending 100% of your budget on property rights alone

You must target your budget for activation programs designed to support your acquired properties. We recommend $2 of activation budget for every $1 of property spend. Spending all of your money on access to a team or series will limit what you can do with it and is a sure way to reduce potential ROI. There is flexibility in the ratio here, as properties are available at a wide budget range depending on your business objectives and where you are in the process.

You must engage your customers

For most brands involved in sponsorship, there is a customer they are trying to engage and win over from their competition. This is an ideal strategy because the motorsports platform gives you more types of audiences, more types of demographics, more marketplaces, and more options to activate your sponsorship in the most relevant way possible.

For one sponsor involved in NASCAR and Formula 1, they have the opportunity to market their product or service entirely differently to the two very different demographics involved in the respective sports. It is a wonderful situation and allows for some of the best brand storytelling out there. The flexibility is valuable, and programs in motorsports cannot afford not to focus on customer engagement in one way or another.

Know what you are taking on

Going at brand activation on your own with no in-house sports marketing team is risky. It is a little like going to court without a lawyer. Possible, but difficult. If you choose to go at it alone, some things generally happen (and more importantly, don't happen) sooner or later. Initially, managing your own programs might seem cost-effective, but the inefficiencies often add to missed opportunities and costly learning curves.

Keep your expectations in check no matter what you're told (sold)

Rightsholders are under the same pressure to raise money as you are to deliver ROI on behalf of your marketing team. It is critical to understand that they ultimately have a primary function and it is likely not your sponsorship program. Whether competing, delivering entertainment or updating their streaming technology, they cannot be expected to manage the details of each sponsor’s needs surrounding a particular event.

It is unrealistic, and the expectations with sponsorship shouldn’t be that the property will take care of activation on your behalf.

The realities of having many sponsors involved with a particular team are that the most popular assets can get crowded, and how they get assigned is not always straightforward or fair. You are still the customer in this relationship, purchasing the right to access assets. It is, however, your responsibility to ensure you use all you paid for.

Engaging diverse audiences effectively

The unique experiences and content your brand can produce from a well-executed sponsorship program can be used effectively in many more ways than one. Depending on where you are most active in your promotion, you will gain insight into the audiences you can engage during the campaign.

With the right tools, you can ensure your sponsorship activation plan is balanced and aligned with your objectives from day one. You'll learn how to engage the different audience types and how they relate to what matters most - driving your business forward.

Let's have some fun

Now, the best part! After all of your preparation, your hard work and your research, you are ready to make this thing happen. Watching a cohesive and integrated program come together is fun and hyper-rewarding. Let's explore a little bit about what is possible.

When you stack motorsports marketing up against other forms of marketing such as digital ads, tv spots, etc., you will find a night and day difference. For what it costs major brands to run a fleeting 30-second Super Bowl ad, you can build a sustainable program over years that you can track back to business growth and development. That seems like a no-brainer, so let's see it in action.

Use motorsports marketing to provide unforgettable experiences

That Super Bowl ad we mentioned, did it give your customers an experience? Did it allow them to be part of something? Do they have photos of themselves watching that ad? If so, good on you. More than likely, that TV ad didn't do those things. It fell short on many fronts, besides overall impressions - which has proven to be a poor metric that does not stand up to rigorous ROI evaluations.

Adding a dash of motorsports sponsorship activation to your overall marketing strategy opens a world of possible experiences you can provide your customers. You can build sales contests around the experiences, awarding your highest performers with an unforgettable weekend at an event. You can inspire retail locations with a strategic asset appearance, bringing intangible motivation to your employees. When your brand comes to life through an experience, it doesn't go unnoticed.

Use motorsports marketing to promote a product or service in a wildly unique way

With the breadth of audiences and demographics available in motorsports, there is a lot of value in activating more than one property investment as part of your strategic mix. You can take it to an expert level when you integrate the two audiences into a story that really "wows" your employees, partners, customers and even a few VIPs. Tie all that to a weekend of entertainment millions tune in for, and your new product or service is on another level.

Use motorsports marketing to influence industry enthusiasts to love your brand

As legendary marketer Seth Godin writes, build your tribe. Focus on that group of people who love and believe in what you do. Identify where that tribe of yours spends their free time, and strategize how you can join them there. When you activate events where your tribe spends time, you connect with their passion. The passion that is naturally there builds into brand loyalty and ultimately translates to sales.

For example, many motorsports fans also love their road cars in some shape or form. It doesn't matter if it is vintage collectibles, rare hypercars, autonomous technology, etc. Identify which categories your tribe relates to, likely more than one, and design a program to better their experience in some shape or form. Sponsor the local auto show, a particular brand's car club, or even a TED talk on the future of mobility. By genuinely and organically joining the group with an interest in learning for yourself and providing a better experience for members, your brand's equity and goodwill are going nowhere but up.

Use motorsports marketing to engage the new-age consumer

Growing tech companies can offer innovative solutions to teams and series' pressing challenges. They can use their service to enhance the team’s performance and the fan experience. These lesser-known brands are starting to recognize the potential in motorsports and benefit from the immense platform to build their business.

These companies are the up-and-comers in their industry and are trying to engage the up-and-comers in the world. With one of the largest and most loyal fan bases in sports, the right activation for these new sponsors can provide access and engagement that can't be bought or found on any digital-only platform. This cutting-edge does not come without risk as seen through very public meltdowns of sponsors such as FTX and Rich Energy.

Use motorsports marketing to celebrate your brand's heritage

Your brand's heritage is an invaluable asset your marketing team already has access to. Thinking back to the beginning of your brand, this journey will illustrate all that you have done, created and produced over years of building. Your past is storytelling that no other competitor can duplicate and that no amount of money can purchase. 

We believe it is a top strategy year-round, but it is especially efficient when there is little to no ability to host live, in-person events. Another benefit is that it lets you take a breath from the constant push to "new" and reflect on what has worked in big ways for your brand.

Should you hire an agency?

You've made it to the final fork in the road! If you've made it this far, you know enough to be dangerous. But there is so much more.

With so much information readily available online to consult about marketing strategy brands sometimes ask, "Why should we hire an agency?" You might wonder, and rightfully so, why you couldn't just go to a property looking for sponsors and deal with them directly without representation, without an experienced agency that knows the run of the show.

The truth is, you can! It is just quite difficult. Some brands do decent on their own, but many fall victim to "The Three Year Cycle: Honeymoon, Reality Check and Fade" with nothing to show. Some immediate things an agency can bring you…

1. Diversified platforms, opportunities and strategies

2. A business-focused mix of assets with any budget

3. Shortened learning curve by months and even years

4. One point of contact for numerous initiatives

5. An agency will help you cut through the noise

6. Executive-level introductions to key business relationships

Let's say you know what you are looking to accomplish. In that case, an agency can create a holistic sponsorship activation program that provides the best available assets to meet your goals. Motorsports marketing is a space that requires working partnerships at numerous levels to thrive.

As an agency, we have seen a lot in the nearly 30 years of our work. We have learned a lot. We have grown a lot in that quarter-century stint. We look back on some remarkable work pulled off in impossible scenarios of constrained resources, relentless third-party pressures and an always-changing marketplace. Our evolution has been iterative and constant to stay ahead of all the dynamics you have just learned about.

However, much of what has defined us through that time is what we have chosen not to do. We haven't deviated from expertise. We haven't gone global and opened expensive offices all over the place. We haven't sold to a large parent organization, which is increasingly rare for agencies. We haven't taken outside investment from parties that may influence how we serve our clients.

We are proud that our average client tenure (is that a metric agencies track? If not, it should be.) is about 9.8 years. That means that on average, we work with our clients for 9.8 years before something changes and we cease our work. Our longest partnership goes back to our founding, nearly 30 years of partnership. These metrics demonstrate a passion for long-term, sustainable thinking with delivered results.

What we do only works with your collaboration and we are eager to hear what you want to work on.

Summary

Motorsports is one of the most dynamic platforms marketers can work with. Global, local, big, small, glamorous or simple, there is a place for your brand to shine. When you put the right activation behind your sponsorship, you will demonstrate value far beyond your logo on the hood of a car.

It's about partnership, process and passion and generating value for your brand.