Nielsen Sports expert Lars Stegelmann, Executive Vice President Commercial Operations, regularly provides sports business insights. This time, he describes how motorsport’s stakeholders are operating in a changing world with focus on digital strategies.
Like rights holders and brands active in every professional sport around the world, motorsport’s stakeholders are operating in a changing world.
This is a period of rapid shifts and intense competition for attention: enabled by technology, fans are rewriting the rulebook – they are increasingly demanding and want the ability to watch whatever they want, in whatever way they want, wherever they are.
Creating exclusive content
Social and digital is inevitably the focus. Formula One’s new owners Liberty Media have, for example, recently allowed teams and drivers to post exclusive, behind-the-scenes video content to their own social media channels.
At the season-opening Australian Grand Prix in Melbourne and the Chinese Grand Prix in Shanghai last weekend, all 10 teams delivered video content to their fan base via Facebook, Twitter and Instagram, as did drivers such as 3-time F1 World Champion Lewis Hamilton (Mercedes AMG) and Fernando Alonso (McLaren Honda). Also recently retired champion Nico Rosberg showed how social media can be used to generate additional content in order to interact with younger audiences.
Activating the right target groups
According to Nielsen Sports market research, the interest of younger audience is increasing. Taking Germany as an example for a look at the 16-29 age group so coveted by advertisers, interest in F1 has reached a high point (37% at present) compared to the previous three-and-a-half years. The world championship success of German driver Nico Rosberg in 2016 has surely played a part in this rise.
In addition, this age group is quite willing to pay for sports-related content in particular. High-quality material designed to supplement sports broadcasts through digital channels plays a key role for these consumers. Relevant emotional content that can be shared with like-minded people across all platforms will only gain in importance.
Latest fan research has identified the segments that respond positively to sponsorship. In Nielsen Sports’ FanDNATM methodology, two of these segments stand out: Armchair Fans and Connection Fans. While both fan categories support sponsorship of their favorite sports, Connection Fans respond even more strongly to sponsor messaging and are more interested in purchasing products than Armchair Fans are. In addition, Connection Fans view their communication on social media as a unifying element.
New commercial potential for brands
This new world also opens up opportunities for brands that sponsor Formula One teams – and investment in strategic planning and creative storytelling in order to activate their engagement is essential. The most effective way to generate value is to define content schedules and topic blocks, before measuring and optimizing them regularly based on fixed KPIs. The content should also be tailored to suit particular segments of the audience. There are countless potential opportunities to involve partners and sponsors and reach out to the brand’s relevant target groups.
Digital channels provide brand support on smaller budgets
For brands, times of rising pressure in terms of advertising and expenditures make it necessary to reduce their media budgets (which were previously spread across a wide range of areas) while achieving a greater ROSI (Return On Sponsorship Investment). As a result, advertising brands and teams with smaller budgets stand to profit from the current digital transformation. Sponsors now need to step on the digital gas to seize this budding opportunity and make use of their budgets in efficient ways.
It is clear that rights holders and sponsoring brands across motorsport are adapting to the possibilities offered by a new and fully-connected world. From new sources of investment, to the exploration of new technologies such as Augmented and Virtual Reality, the explosion of eSports and the fragmented media landscape, international motorsport has much to consider as it battles for fans’ attention, interest and revenue. This fascinating commercial journey is revealed in Nielsen Sports’ Commercial Trends in motorsport, focusing on the new Formula One and also MotoGP world championships.
Keen to discuss suitable approaches for your company? Please contact Lars Stegelmann, Executive Vice President Commercial Operations, Nielsen Sports.