Formula 1 (F1) sponsorships have transitioned into powerful marketing tools. They offer brands unique opportunities for global exposure and engagement. The sport’s increasing popularity, fueled by the Drive to Survive Netflix series, has led to a surge in sponsorship revenue and a shift in the types of companies investing in F1.
F1 Sponsorship Deals
The average value of F1 sponsorship deals is around $37 million per year, but some reach much higher. Oracle’s deal with Red Bull Racing is worth $100 million annually. HP’s agreement with Ferrari is valued at $90 million. F1’s total sponsorship revenue for the 2024 season is projected to exceed $500 million. In 2023, Formula 1’s central sponsorship income increased by 15.8 percent, reaching $445 million.
As brands from various industries, including tech, finance, and even online gaming, invest heavily in the sport, casinos and betting platforms have also increased their presence. This is particularly evident in Las Vegas, a city with a deep-rooted connection to both motorsports and entertainment.
The return of F1 to Las Vegas with the highly anticipated Las Vegas Grand Prix, along with the city’s history of hosting the Caesars Palace Grand Prix in the 1980s, underscores the strong relationship between F1 and the gaming industry. Given this history, offers such as the Caesars Palace Online Casino promo code highlight how brands are maximizing F1’s growing presence in Vegas
Several factors contribute to the effectiveness of F1 sponsorships:
- Brand Exposure: F1’s global reach provides sponsors with extensive visibility. Over 40% of consumers are more inclined to buy from long-term F1 sponsors. Jensen and Cobbs (2014) found that sponsors realized brand exposure valued at nearly $19 billion over a five-year period.
- Technological Alignment: Technology and software companies are increasingly investing in F1 sponsorships. These partnerships allow them to showcase their capabilities to a wide audience. SAP’s software partnership with Mercedes helps the team improve efficiency and sustainability.
- Fan Engagement: F1 sponsorships offer opportunities for brands to engage with fans through digital loyalty programs, interactive experiences, and branded content. Oracle and Red Bull Racing created “The Paddock,” a digital loyalty program powered by Oracle Cloud Customer Experience (CX) technology.
- Team Performance: A sponsored team’s performance significantly impacts the returns for sponsoring brands. Sponsors of Indianapolis 500 winning teams have seen 3% larger abnormal returns.
F1 Sponsorhips Structures
F1 sponsorships are structured in various tiers, each offering different benefits:
- Title Partnership: Includes prominent branding on the car, team naming rights, and marketing integration.
- Principal Partner: Offers high-visibility branding on the car and team assets, along with hospitality access.
- Technical Partner: Involves collaborative technology development and R&D opportunities.
- Official Supplier: Includes product use by the team, limited branding, and B2B networking.
F1 sponsorships are, just like f1 itself, constantly evolving. Technical partnerships, such as Toyota’s collaboration with Haas, are becoming more common. Sustainability is also a growing focus, with partnerships aimed at enhancing a team’s green credentials. Brands are using digital platforms and social media to create engaging content and reach new audiences.
The United States has become the dominant country for F1 team partners, with 46.8% of partners based in the USA at the start of the current season. This is more than double the number involved when Liberty Media took over F1 in 2016. DHL, F1’s longest-standing global partner, renewed its partnership in 2024 in a deal estimated at $42 million annually. Heineken, the series’ most valuable partner, has a $60 million estimated annual sponsorship value. Qatar Airways replaced Emirates as the sport’s official airline partner in a deal worth an estimated $45 million annually.
This content is brought to you by the FingerLakes1.com Team. Support our mission by visiting www.patreon.com/fl1 or learn how you send us your local content here.