- Digital Replacement technology allows for regional betting sponsorship deals
- ISG says regional deals offer more targeted and cost-effective branding opportunities
- F1 currently able to differentiate feeds in Asia, Europe and the Americas
Digital advertising technology could allow Formula 1 to have up to seven different regional betting sponsors, according to the sport’s global data and betting rights partner Interregional Sports Group.
On Tuesday, online betting brand 188Bet was announced as the series’ first betting sponsor for the Asia region, in a five-year deal (from 2020 to 2024) brokered by ISG. SportBusiness reports the deal to be worth at least $8m (€7.2m) per season.
The ISG agency, which specialises in virtual advertising technologies, will now seek to strike a series of additional regional deals to make a return on its five-year agreement to market F1’s betting sponsorship and data rights from 2020 to 2024, worth about $100m, or $20m per year.
The company says digital replacement technology (DRT), which allows sponsor branding to be superimposed on trackside positions so it is only visible in defined broadcast territories, has allowed F1 to target betting brands for the first time.
ISG non-executive director Chris Buckley says the reason F1 has failed to attract a betting sponsor up until now is that few bookmakers operate globally and have the budget or the inclination to sign a worldwide sponsorship deal.
The ability to offer regional partnerships, he argues, will make F1 a more cost-effective sponsorship proposition compared with properties like the English Premier League, where betting brands often take out shirt sponsorships or static pitchside advertising to target customers overseas.
“Betting brands all tend to be strong in specific markets,” he says. “Brands who want to use the Premier League to target Latin America or Asia, for example, currently have to take physical advertising which is shown all over the world. There’s a lot of wastage because they’re not interested in most of the territories that it gets broadcast in. But with virtual advertising they can target the region they’re actually interested in and just pay for that.”
F1’s decision to take its broadcast production operations in-house in 2004 has enabled it to segment its sponsorship categories more effectively. It currently provides three different regional feeds: one to Asia, one to the Americas and one to Europe. This means it is already able to create different digital overlays for each of these markets and sell regional betting deals in these regions.
“It’s contemplated that we would have European, Asian and Americas partnerships initially, but we could look to explore more and be more targeted,” Luke Drake, head of partnership accounts at F1, tells SportBusiness.
Beyond this, Buckley suggests the sport could have separate betting partnerships in Mena, Africa and Australasia and also create split feeds allowing for separate deals in North and Latin America. He says the job of providing digital overlay capabilities to seven regional betting partners would be costly and present more of a technical challenge, although these obstacles are surmountable.
“Formula 1 have the technical expertise coming out of their ears, but equally there’s no point activating those feeds until we’re confident the fifth, sixth and seventh regions are ready to go,” says Buckley. “You got to have a betting partner that’s ready and willing to pay what it would be necessary for us to do that. It’s not cheap to do another feed.”
ISG and the F1 broadcast production unit spent last year perfecting the digital overlay technology. The two parties used the trackside positions that will now be allocated to betting brands to promote F1 Play, the sport’s free-to-play predictor game, during the 2019 season. F1’s favoured DRT provider is Vizrt, a Norwegian company that has developed an unobtrusive solution that does not require additional lenses to be put on cameras.
As reported previously by SportBusiness, ISG pays Formula One Management for the feeds as part of its deal. The amount of trackside inventory available to 188Bet in Asia, and other brands in the rest of the world, depends on the size of each circuit. For smaller tracks, two or three positions will be available for branding. For larger circuits, four or five positions will be available.
Any further regional betting deals could be structured along the same lines as the 188Bet deal, though F1 says it wishes to offer a degree of flexibility.
188Bet focuses on Asia
Having previously targeted the European market with sponsorship deals in horseracing and with Premier League clubs Liverpool, Manchester City, Chelsea and Everton, 188Bet closed its UK and Irish operations in 2019 to concentrate on its core Asia business. It believes the reach and popularity of Formula One will help it to build its brand in the region.
For this reason, the principle focus for 188Bet in the F1 deal is a combination of the digital overlay trackside advertising and static trackside adverts visible in Asia. The deal also gives the company the exclusive rights to the F1 Play predictor game in Asia to offer fans a greater range of gaming options.
Access to F1’s live betting data is not thought to have been an important element of the deal as this is made available to all bookmakers on a non-exclusive basis anyway.
“There’s a pool of rights across hospitality, some on site event activation rights,” says Drake. “The main spear of the rights is definitely going to be the broadcast rights, the digital overlay. That includes some 2D static graphics and I think what is a really important part of it is F1 Play which is the soft game which last year we had on broadcast for the whole of the season in anticipation for a partner, so we know exactly what inventory we’re using now.”
Southeast Asia has tended to be the strongest market for bookmakers in the region. Betting is illegal in China, but 188Bet’s digitally overlaid branding will nevertheless be visible in the country through F1’s pan-Asia feed. Regulators in most markets where betting is banned are thought to be sanguine about betting advertising appearing in sports coverage, provided it is not deliberately targeted at local audiences. For instance, English Premier League and LaLiga games are often broadcast in China featuring perimeter bookmaker advertising.
For the same reason, ISG is confident that the patchwork of different betting regulations in the USA, and the fact gambling continues to be banned in some US states, will not prevent it from striking a pan-regional North America deal. The company anticipates most bookmakers, as is the case with 188Bet, would use a regional partnership with F1 for brand building purposes rather than to present controversial call-to-action betting promotions, something that will also help to placate regulators.
In agreeing the deal with 188Bet in Asia, ISG has started with the biggest betting market in the world and Buckley predicts the deal activation will encourage other brands to sign up.
“Asia is the strongest market, without a doubt,” he says. “Europe is strong for F1 particularly, because it’s such a mature market, their biggest TV audience is Europe. And then the Americas is the one that everyone is talking about. Five years ago, maybe ten years ago, everybody was talking about Asia, now everybody’s talking about North America, because that market will explode.”
According to Drake, the ability to differentiate advertising messages for different regions has also piqued the interest of F1’s existing global sponsors, who would like to be selective about the languages they use in their messaging. For now, however, the main driver for the new digital capabilities remains the need to service new regional betting partnerships and the ISG agreement.
There are also limits on the levels of personalisation the motorsport is willing to provide for different viewers. Drake says F1 is a long way from the point where trackside inventory becomes a programmatic advertising purchase and messaging is differentiated based on the preferences of each individual viewer.
“I think it’s important that the brands that want to get involved with Formula 1 want to have an association with us,” he says “I think that’s where the value comes from sponsorship over advertising: you’re there as part of an exclusive club of partners and your presence is meaningful. I think that’s what we sell ourselves on, and being associated with the IP of the Formula 1 brand is important.
“But I think the more capable we can be, the more options it gives us and then we can commercialise things in the right way and set the right strategies out.”