How Does a Sponsorship Work Once You Sign the Contract?

Signing a major sponsorship deal with a multi-year partner may feel like you have just accomplished the most intense work in your brand’s history, but it ultimately marks the beginning more than anything. Investing in motorsport marketing without an activation strategy can be a costly and high-profile mistake. How you develop sustainable activation programs will be the key to utilizing your sponsorship assets holistically and profitably.

Motorsport properties have witnessed a tremendous evolution in their decorated history dating back to the early 1900s across various dimensions including revenue levels, audiences, and even entire ecosystems. Nothing changed the game more than when brands started to get involved through sponsorship. Brands have been so influential that entire teams and events are often known more for the sponsor than the underlying property.

Sponsorships used to be quite simple – you went to the sport with the most loyal fan base or largest live audience and put your logo everywhere you could. As the market evolved and became more sophisticated, those “easy-to-see” elements of sponsorship were no longer enough to drive meaningful value.

So, how do sponsorships work now?

Brands have shifted to incorporate a more strategic mix of assets into their portfolio with support from tent-pole events such as the Indianapolis 500, Daytona 500, F1 Grand Prixs or Rolex 24 at Daytona to add an extra edge to the marketing strategy.

Moving beyond the branding

Most likely, a leading asset you picked up in the deal was still a lot of logo placement. That is a good start, but the placement of your brand’s logo is not the only important step towards successfully utilizing your motorsport sponsorship program. Once your partnership is signed and agreed upon, the real work on your side begins.

Let’s get into the top things you can get working on to answer the “now what” part.

Positioning: credibility boost

The property you choose to sponsor is a big deal.

Their voice, actions and brand will now be reflecting on you in a natural and real way. Going with this flow is much easier than trying to work against it. Carefully consider which platform makes the most sense for what you are trying to achieve.

Sponsorship is a great vehicle if one of your objectives is a shift in how certain audiences view your brand. We are seeing more and more startups coming into the space with exciting and disruptive technology, but not much of a track record. It can be difficult to pick up new customers without that element of trust - especially if you are going after an emerging audience. An association with a strong team that has a strong track record of winning and high performance can be an excellent jump start for your new brand to hitch its wagon to and say “hey, we mean business.”

Activation: VIP experiences and “narrowcasting”

Now you have a portal to this magical world of events, glamor and access you previously didn’t have. This selection of assets is an exciting and critical component of your sponsorship program’s health. Our favorite use of these sponsorship assets (assets are another thing to be carefully negotiated before signing) continues to be creating targeted, in-person experiences inside the platform you are now part of.

Our definition of narrowcasting is simple. It's the opposite of broadcasting. Instead of going for more people we are looking to target the right people that will make a difference for your brand.

This may take the form of unique viewing locations or the creation of a "members-only" branded area at the race track. Taking your guests to spaces like this provides a hard-to-attain feeling of exclusivity for them that more often than not ends up on their social channels as a form of user-generated content (UGC). Your sponsorship should include some "can't-be-bought" access that will provide a great subject to document. The use of digital becomes more effective when you amplify your exclusivity and experiential campaigns rather than trying only to create digital content in a studio.

Strategy: Asset integration and audience engagement

The question to analyze here is “what other marketing and business development assets do we already own and have access to?” These could be in wildly different departments, or more functionally found in a similar sports marketing vertical.

If you are looking for a wider net, this platform is scalable and has room to grow with you and your audiences. Companies such as DHL, Arrow Electronics, and Shell cross over multiple series with different assets to produce a long-lasting impact on the minds of their target audiences with the right touch points.

The flexibility built into sponsorship programs can make them more valuable than traditional media buys or broadcast campaigns. You can creatively and appropriately use your long-tenured agreement to address the ever-evolving needs of your brand. This flexibility allows you to continue engaging your audience where they already are by changing with them - far more effective than interrupting them and trying to yell louder than the next loudest competitor.

B2B, R&D and more

We know there are a lot of acronyms in that subtitle, but it turns out that you can use sponsorship to build ROI in many different ways depending on what you are looking to accomplish. The sponsorship platform offers unique access to developing products or services through technical partnerships plus all of the business networking and development you can get started. That ROI gets multiplied when you run each of the above subcategories together.

“@Cognizant, the American digital services company that is a sponsor of @AstonMartinF1, has struck so many lucrative B2B deals that it attributes to the sponsorship that it has already paid for itself essentially, including one worth $100 million, per CMO Gaurav Chand.” - Adam Stern, SBJ

These comments are not unique in motorsports when you match the right experience, partnerships and activation.