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The IT Crowd

When the electric Formula E racing series was first launched, it aimed to plug-in to a new generation of motor sport enthusiasts. Industry experts reveal how successful it was in engaging fans.

How do you convince young people to participate in a new sport when they spend all of their time on their computers and phones playing video games and being anti-social on social media?

To Formula E, the answer is simple; if you can’t beat them, join them. Turn your sport into as much of a video game as possible where the audience has the power in their hands to influence the outcome, as they do with a games console control.

FanBoost is Formula E’s solution to attracting a new generation of racing fans, which is particularly important if a very significant proportion of traditional or ‘purist’ motor sport fans have brushed off the series as nothing more than a real life version of Scalextric.

The concept allows viewers to vote for their favourite driver on Formula E’s official website during the periods between races. Voting is closed prior to each race and the three most popular racers are awarded a five-second power boost from 150-kilowatts (202.5 brake horsepower) to 180-kilowatts (243 bhp).

As with the disapproval by motor sport fans for the introduction of Formula One’s KERS (kinetic energy recovery system) and DRS (drag reduction system), which were both introduced to increase power and overtaking, FanBoost was criticised by purists as a form of race manipulation, and was opposed by some quarters as it completely bypassed the racing and engineering capabilities of the competitors.

Perhaps it is surprising then to learn that former racing driver turned motor sport sponsorship executive Zak Brown believes that FanBoost is a “good inclusion”. Brown is the CEO and founder of Just Marketing International, as well as being named group CEO of its parent CSM Sport and Entertainment agency in March this year.

“Formula E’s biggest achievement, in my opinion, is how many children the races attracted. The [lack of engine] sound has a lot to do with that, as does the social media engagement via FanBoost. If you look at most television shows, there’s fan engagement through texting and social media that keeps audiences immersed,” Brown told SportBusiness International.

“At the end of the day, FanBoost doesn’t disrupt the principle of an equal playing field, because it just means that all the drivers have to be as good as each other in engaging fans. The question is where you draw the line in sport between the purity of racing and manipulation to a certain extent.”

Alejandro Agag – chief executive of series rights-holder Formula E Holdings – not only stands by FanBoost but also wants to include its use during races in future seasons, in order to further engage fans by giving them a live and visibly effective participation in the motor sport.

“FanBoost has forced racing drivers to be responsible for their own marketing rather than just turning up to drive,” said Crispin Bolt, director of client services for motor sport at the GMR Marketing agency.

“Drivers now have a vested interest in social media and the platforms that Formula E has created to reach a wider audience. However, problems may come when FanBoost is used in-race, as that may detract from the racing and purist side.”

“In-race FanBoost will also be quite difficult from a voting monitoring perspective – it doesn’t come without challenges, as ITV entertainment programmes have found out,” added Formula E Teams’ Association secretary general Oliver Weingarten, referring to Formula E’s UK broadcaster ITV that was fined £5.675m by national communications regulator Ofcom for abusing premium rate phone services in viewer competitions in 2008.

Content Pusher

The drivers have also become a lot more commercially savvy

In May this year Formula E partnered with online video promoter Grabyo, which shares real-time video highlights to social media platforms Facebook and Twitter. Beyond this, the Grabyo VIP mobile app gives Formula E racers and teams the platform to create and share videos with fans.

 

“Formula E’s target market is under 30 years old, because it is not looking to converting Formula One fans – that just won’t happen,”

Misha Sher – head of sport in Europe, the Middle East and Africa at sponsorship consultancy MediaCom – told SportBusiness International.

“Formula One fans will be curious about Formula E, but they appreciate motor sport for different reasons, such as the engine sounds, for example. Formula E, on the other hand, is all about the millennials [born between 1980 and the mid-2000s] and the where the future is going. The youth of today have grown up in a different world and so they like different things, and Formula E ticks those boxes.”

“The drivers have also become a lot more commercially savvy,” added Weingarten. “They are working with their own sponsors to produce content for each region they travel to, as well as targeting their fanbase, and the team’s home and major markets.”

The importance of online presence was highlighted by the fact that Formula E streamed all of its practice sessions, qualifying and races on its website for free. There is an argument that this may devalue the property’s television rights, which the industry experts told SportBusiness International were sold to broadcasters for a very modest fee for the first rights cycle.

“It’s all about platform neutrality – long gone are the days of linear broadcasting in terms of just watching television, as most rights-holders have already found out,” said Weingarten.

“Streaming live content online for free is also a good way to get into dark markets where there isn’t a rights-holder in the region.”

“When Formula E gets a critical mass of fans then it possibly can start charging for live content online or moving to predominantly pay-television broadcasters,” said Bolt.

“As Formula One has discovered, audience figures begin to decline when you move to pay-television – sure they can be built up again, but ultimately if you haven’t got the fanbase in the first place then the first objective is to get to a critical mass of fans.”

Festival of Speed

In order to attract as many spectators as possible to the one-day event, Formula E requires each host city to create a fan zone, dubbed eVillages, to surround the street circuit. This includes food and beverages, live entertainment, fairground rides and of course big screens to watch the race.

Not only does this encourage ticket sales for general admissions, grandstands and hospitality, it also provides brands the opportunity to activate their Formula E sponsorships, adding value to both the fan experience and the partnership deal.

This is particularly important given that the sports property is yet to receive significant income from selling its television rights.

“Fan festivals are becoming more and more important for sporting events. Fans want to engage whether it’s through their iPhones or live content at the event,” said Sarah Neill, major events manager at London & Partners, the city’s official promotional company.

“Sponsors want spectators to engage with their brand at events and the weeks leading up to the race.

“The eVillage is therefore critical for both sponsors and spectators, and I foresee it growing year-on-year.”

Going Green

Formula E has been based on the importance of being economical and environmentally-friendly – issues that are at the forefront of everyday life in today’s world. This green emphasis has brought criticism to the travelling circuses of motor sports series, which means that not all brands want to associate themselves with the sport.

“The big differential for Formula E is the fact that nothing has really existed in the market that will provide this sort of positioning for the brands,” says MediaCom’s Misha Sher.

“Some brands have tried to move into that economical space, and there are other properties that have tried to give themselves that angle, but this is a property that has really developed around innovation and sustainability, which are aspects that are the heart of conversations for everyone today.”

“The sponsorship deal pitches have been mainly focused on the green aspect, but being green is a big message for the world right now and it’s not going away,” added JMI and CSM chief executive Zak Brown.

The Sponsor: Visa Europe

Visa Europe was the official payment services partner for the Monaco, Berlin and both London Formula E races, as well as being a title sponsor of the finale weekend. As part of its activation in London, Visa Europe sponsored the fastest lap trophy for each race, with fans engaging in a sweepstake to predict the time of the fastest lap ahead of the event. We asked them to explain why they decided to partner with Formula E.

Gary Twelvetree
Executive Director of Brand and Central Marketing Visa Europe

We were attracted to Formula E because it is innovative. It’s taking a pretty saturated market in motor sport and pulling it into a modern era. That’s exactly what we are doing with payment services.

There’s a lot of synergy between the two parties, and the racing calendar also covers our major European markets as well as our demographic, which is the under 30s who would be the early adopters of our new technologies and products. This includes payments via contactless, mobile and wearables.

We are also looking for ways we can incorporate these technologies into the event. The green aspect wasn’t a primary attraction for Visa to become a sponsor, it was rather the innovation aspect – which being green is a secondary factor – that attracted us.

We use the sponsorship in many ways – it’s not purely about brand awareness by just having our branding on a car or on a corner of the circuit.

We are using this to engage with our audiences, especially on the social media side, for example, our ambassador athlete Usain Bolt activated the sponsorship online to his mass following.

The eVillage widens our audience reach, and was one of the main reasons that attracted us to Formula E. It’s very accessible – and that’s the main theme across the entire sport, with drivers signing autographs and being visible in the [hospitality area] EMOTION Club.

We see the sponsorship value much more than what it brings in the short term. We can use the partnership to benefit business-to-business relations with our member banks; business-to-consumer development by speaking directly to our consumers at the races; and consumer-to-consumer via social media interaction.

Visa Europe is a separate entity from the international firm Visa Incorporated, but Europe is where we wanted to start with Formula E to test the waters.

We will most definitely be sponsoring Formula E next season and we currently are a long way into the contractual stages. We loved the new platform, despite it being a bit of a test and we are excited about where it will go, and we are very comfortable with the discussions we are currently having with Formula E about the plans for the next few seasons.

We would like to see Formula E being hosted in every major European city if it was possible. France is a very big market for us so it is great that the calendar will include Paris next year. It would be good if a major Italian city was added too. At the end of the day, the success of the sponsorship deal will come down to the level of engagement with our member banks and we will be measuring whether it creates value for them. We will also measure the engagement levels with Visa consumers as well as the clients we take to the races.

Our Formula E sponsorship deal’s worth is incomparable to our other partners in sport, just because it is so new and different to everything else.

The Broadcaster: Eurosport

Halfway through its inaugural season, media giants Liberty Global and Discovery Communications secured minority shareholdings in Formula E. Liberty is the parent company of Virgin Media, while Discovery acquired sports broadcasters such as Eurosport and Setanta Sport Asia in June 2014 and 2015, respectively. We asked them why they decided to acquire rights for Formula E highlights in the UK, and what the future holds.

Peter Hutton
CEO Eurosport

We will look at multiple European markets to acquire Formula E rights when they become available. However, we strongly believe that a mix of free-to-air and pay-television is the right route for Formula E, and we need to make the right broadcasting decisions to grow the series.

Discovery Communications sees the potential growth of Formula E and Eurosport would like the chance to help influence that growth. With unmatched global distribution, Discovery’s Velocity, Turbo and Eurosport brands, and 30 years of experience as a global media company, our unique expertise can help develop this new and unique motor sport.

I think Formula E hits a great niche with sponsors by projecting a clean and green image. The excitement of the race series also offers commercial value with fantastic racing, leading drivers and innovative automotive technology on display.

The introduction of exceptional ideas like FanBoost have also added a new dimension, which has allowed fans to affect the race in way motor sports fans have never been able to do before.

Our involvement with Formula E is not just about acquiring the rights and I hope our advice can help the sport seek even better visibility in Asian markets, in particular. Discovery has been focused on building scale and expanding in Asia, as demonstrated by the recent acquisition of Setanta Sports, which followed rights acquisitions of the Uefa Champions League in Singapore among others, and we will use that experience to help drive Formula E forward.

If Formula E’s content wasn’t good, then we wouldn’t be interested in taking a stake in the property. However, we value the support of other Formula E broadcasters such as Fox Sports in the Americas [who have a broadcasting deal until the 2019-20 season] and free-to-air channel ITV in the UK, so it would be wrong to simply take a position that we will automatically take broadcast rights.

There will be genuine competition when it comes to acquiring Formula E rights when they next become available, which is based on both rights fees and what is strategically right for the motor racing series.

Eurosport has acquired the rights for Formula E highlights in the UK, which is a good first step, but we want to build the credibility and viewership of a new property and are very happy with the support ITV are showing the series.

Beyond that, Eurosport reaches 222 million cumulative subscribers across 91 countries in Europe, Asia-Pacific, Africa and the Middle East. We broadcast over 5,000 hours of live sport every year into 137 million homes in 54 countries.

 

To continue reading SportBusiness International's Formula E event focus, please click the links below:

1. Electric Avenue: Elisha Chauhan speaks to Formula E’s stakeholders to analyse the successes and failures of its innaugural season.

2. Racing for Pole Position: Elisha Chauhan speaks to the man driving Formula E, Alejandro Agag, to find out how he thought the inaugural season panned out and what’s in store for the future of the electric racing series.

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