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GP Week : Issue 181
F1 >>> BUSINESS It’s now a year since Pastor Maldonado took victory for Williams at the Circuit de Catalunya, the first time that the team had been on the top step of the podium since 2004. The win looked like it would signal the beginning of a new era of success for the team. However, one year on and the situation isn’t looking quite so rosy. Following Maldonado’s Spanish victory, Williams failed to score another podium in 2012 with its next best effort a fifth place in Abu Dhabi. The 2013 season has got off to an even worse start with Williams struggling to make it into the points. Williams is the only public F1 team and since early January when shares hit a high of €25.50, the team’s share price has slumped by more than 13% to €22.10. The uncertainty in Venezuela following the death of president Hugo Chavez in March is another concern for the team. Around a third of its budget derives from its Venezuelan backers, Venezuela Tourism and state oil company PDVSA. Against this backdrop it is crucial for Williams to show it can offer sponsors a strong package. In Spain last year, Williams’ victory brought a big boost in exposure for its partners. PDVSA was the fourth best-exposed brand of the race with coverage which would have been worth $9.7m if it had been paid for as global television advertising slots. This kind of exposure makes a team very attractive to prospective partners. Williams will also be looking to replicate its financial performance from the 2012 race. Then it was the best value team of the race, spending just an estimated $265,600 per point it scored, compared to $307,037 for nearest rival, Lotus. The victory also made Maldonado the best value driver, costing Williams just $1,000 per point in salary. As one of the smaller teams on the grid, Williams needs to replicate this form. Spain is also a significant race for local sponsors and drivers. Fernando Alonso often performs well on home ground and last year led 27 laps of the race, generating high exposure for Ferrari’s main partner, Spanish bank Santander. Combined with its presence as race title sponsor, this gave Santander coverage during the race worth $29.1m, or 22.5% of the total brand exposure, making it the best performing brand of the Grand Prix. Santander is unlikely to be able to match this total in 2013 as $19.5m of the coverage came from its role as race title sponsor. This year Santander has dropped this partnership and so far no replacement has been signed. With race title sponsorships typically going for around $5-6m there is a real opportunity for a brand to come in and get a great bargain from its deal. METHODOLOGY Brand exposure By using the lap-by-lap performance of each team along with the extent of sponsors’ exposure during a given race, Formula Money calculates the advertising value equivalent of team sponsorships factoring in the effects of race performance on brand visibility. The focus of the data is not time on-screen but is instead the global media value of each sponsor’s exposure. The data covers all brands featured on the 2012 F1 cars, including sponsors, team owners and engine manufacturers. The data also includes the exposure achieved by the trackside advertisers at each race. The data is race-performance based so exposure is calculated for the duration of the race only and excludes branding of on-screen graphics. Team spending per point This data shows the ratio of the number of points scored by each team in the 2012 Bahrain Grand Prix to the level of resources that team had available to it for the race. Team resources estimates are based on Formula Money’s estimated 2012 team total resources. Driver value for money The drivers’ cost per point is calculated by dividing a driver’s average pay for the race by the number of points he scores there. Driver cost estimates are based on Formula Money’s estimated 2012 team driver salaries. Data provided by the Formula Money ROI Review: www.formulamoney.com FIVE BEST-EXPOSED BRANDS – SPAIN 2012 Brand Team(s) / Race Est advertising value equivalent of exposure 1 Santander Ferrari, $29,142,392 2 Red Bull Red Bull Racing, $12,147,451 Toro Rosso 3 Lotus Lotus $10,226,951 4 PDVSA Williams $9,667,663 5 Vodafone McLaren $6,778,777 Best-exposed team Ferrari $18,633,855 TEAM SPENDING PER POINT RATIO – SPAIN 2012 Team Points Estimated spending per point (US$) 1 Williams 25 $265,600 2 Lotus 27 $307,037 3 Sauber 10 $466,000 DRIVER VALUE FOR MONEY: BAHRAIN 2012 Driver Points Estimated cost per point (US$) 1 Pastor Maldonado 25 $1,000 2 Romain Grosjean 12 $1,042 3 Kamui Kobayashi 10 $2,500 As F1 teams head towards Spain, Caroline Reid and Christian Sylt look how sponsor’s returns were calculated, using last year’s Barcelona race The business of F1 brands 1 GPWEEK.com // 1 GPWEEK.com // PARTNERS: