How Formula 1 should promote itself

Rewind to Formula 1's formative years, and it is easy to recognise when, why and how the flab developed. Generally recognised as the early- to mid-seventies, this period led to the rise of commercial sponsorship (primarily tobacco brands), influx and influence of motor manufacturers (led by Renault), growing interest from TV broadcasters beyond home races - and the rise of one Bernard Charles Ecclestone.

F1 never had it so good: on TV it was the only game in town Sundays post-lunch; fag companies, increasingly hit by advertising restrictions, threw millions at anything that moved; Renault upped the ante, leading with a full-blown PR/media charge; and Ecclestone entrepreneurially led F1's expansion across the globe off the back of the James Hunt/Niki Lauda rivalry that captivated hordes of new fans to the east and west of F1's heartland.

Promoters, hit by increasing hosting fees, marketed the franchise in their own territories; TV broadcasters (ditto) plugged upcoming events; and entertainment junkets precipitated the introduction of pampered global hospitality at eye-watering cost.

F1 started to boom in popularity (and riches) the mid-1970s © LAT

In short, F1 had no need to punt itself - its players did so extensively (and expensively). Back then, team marketers put on functions hosting fag/oil/booze/car executives (delete as applicable) at fancy lunches, plying them with champers, and putting well-padded contracts before said starry-eyed individual by the end of said festivities. Deals done, cars liveried, next prospects targeted.

Then it changed: tobacco sponsorship was systematically banned; car companies withdrew en masse; sport moved to pay-TV (with resultant cost and eye-ball effects); compliance legislation hit hospitality; and various disruptive technologies overturned F1's traditional ways. Back then face books were hardcopy photo albums and only birds tweeted; today they are used to connect across oceans.

Factor in that F1 is led by an octogenarian pressured by owners (led by CVC Capital Partners) whose sole purpose is squeezing max return from every dollar turned, and F1 stands no chance against such onslaughts without wholesale change. Compounding the issue is that its top salesman never was well versed in the science of marketing (spot the difference?), having previously sold pre-owned cars.

Why should he have been? For decades those about him did it for him, at massive cost - but at none to himself. Now, the result is clear to see: emptier stands at several races, drops in TV ratings and cars baring fewer logos. In fact, the most decaled cars are owned by the brands they push, and most drivers now sport more personal artwork than their cars bear stickers.

Yes, there are bright spots - Silverstone playing to a full-house and the odd TV ratings spike - but, when all is said and done, F1 needs a comprehensive overhaul if it is to regain its status as the world's largest continuous sporting block.

Where to start? With Zak Brown, whose love and passion for motorsport led him to the top of its marketing tree after he realised that his (self-confessed) modest driving talents would not result in an F1 career any time soon. Still, he is active in global GT racing, so remains close to motorsport's pulse.

For many years Zak (43) and his agency Just Marketing (absorbed by Chime PLC, with Brown now CEO of its sports marketing division CSN, which numbers 900 heads globally), have been F1's go-to marketing guys. Their roll call is impressive (in no particular order, and by no means exhaustive): Martini, HiSense, LG and Qualcomm, UBS, UPS, Johnnie Walker, GlaxoSmithKline...

Marketing guru Brown speaks regularly with F1 chief Ecclestone © LAT

"Our business is probably 55 per cent Formula 1, probably 25 NASCAR, then the balance would be sports cars, drag racing, MotoGP, DTM, etc," he says.

Thus Brown is eminently qualified to talk about F1's commercial challenges, and he cuts straight to the quick: "[F1] can do a lot better as an industry than we are now. The beauty is that people are massively passionate about the sport."

How much better? "Three to four times better." However, he believes "the current structural governance of the sport is at a stalemate, and that's the problem", pointing to confusion around engine allocation regulations.

The proof of F1's malaise lies, he suggests, in (lack of) team profitability. He uses McLaren as example: "They've got plenty of sponsors, they're running two great drivers, and they're losing money. There's something wrong with [F1's] business model.

"If you look at NFL, all those teams, they make tons of cash, the franchise value goes up; everyone's making money. Here it's either you're rich, or you're broke. In reality the rich will not be able to be rich forever if the broke go away."

After a pause Brown expands on the NFL theme: "[There] if you finish last, you get first vote; here, if you finish first, you get the most money. It's out of balance."

Where, in Brown's opinion did it all go wrong? He draws comparisons with NASCAR, which dipped in popularity before starting the long haul upwards.

"One thing I remember in NASCAR that stopped [the downward spiral] is that drivers used to get out of the 'Car of Tomorrow' saying 'these cars are terrible', 'the racing's terrible', 'I wouldn't watch this if I were you'.

"Guess what happened? People started listening to their heroes. Then they stopped all that. The buzz isn't what it was when it was skyrocketing, but NASCAR's in a good place."

This begs comparisons with F1's self-inflicted criticism of its current hi-tech power units, and he obliges: "Our ambassadors of the sport, starting with drivers, but also some team principals, have been as guilty as anyone, rubbishing the sport. We've got challenges [but] I tell people, 'come to a race, you're going to have the best time of your life, you're going to walk away a racing fan'.

Silverstone hosted a bumper crowd for this year's British Grand Prix © LAT

"Whether the engines are loud or quiet, or you like it or not, I think Formula 1 racing is awesome. Unfortunately those sometimes in the sport, because they get emotional around what's going on, they lose sight of that.

"You get these drivers going, 'It's crap.' You never saw Steve Jobs standing up going 'This latest Apple model is not very good.'"

We move on to F1's cost:spend equation, and how best it could convert a portion of its billion-pound annual income to marketing advantage. Brown likens the ideal set-up to a fast-food franchise.

"The way the economic model now is obviously the money comes into Formula One Managment, then is shared." Then he outlines his vision: "Almost like a franchise system in some way...restaurants, where everyone puts in one per cent or whatever it is. The sport needs to invest.

"While people have said 'Bernie, Bernie, Bernie', it's the sport's responsibility. There are teams, there are drivers, there are promoters...you go to these new stadiums now, they're all set up with wifi, they're all digitally connected. It's all of our responsibility to contribute to making Formula 1 more digitally, social media savvy. Not just [F1 HQ] Princess Gate."

One of the cornerstones of franchising is co-operative marketing with a view to individual benefit, and here Brown sees F1's teams working together to help the greater good, initially off a low-cost base.

"What you could do, as an example, when drivers get a superlicence they have to give four days of their time. Now you've got 40 to 80 driver days, and you go to every promoter and say, 'Alright, Singapore, this weekend you get Lewis and Sebastian. I want Wednesday night, and we all rally around it, the biggest street party of street parties so people know Formula 1 is coming to town'.

"That's just building the sport's awareness. Of course, when Lewis shows up he's waving the Mercedes flag, Sebastian in red..."

He expands on the theme, using NASCAR as template: "All of the fans that are there, because that's the whole beauty of social media. So we need to provide exciting content - now it's not only the industry being creative, but fans, too. They're the best promoters of the sport.

"NASCAR - a lot of people don't know this - they line up all the trucks before coming into town, about 10 miles out, so all of a sudden everyone in the city knows the circus is coming to town. It's all about the show, the pre-show and post-show, as well as the race.

"Here we tend to focus on the race. You go to a NASCAR event, there are people that just stay outside, mingling with sponsors, experiential marketing, they don't even go to see the race. Here it's all about Sunday two o' clock. We all have to contribute; I don't think there's a silver bullet. It's not one person's job, it's a collective job."

Any of these ideas, would, though, surely require the full support of F1's tsar, particularly in view of the disappointing progress made to date by F1's much-vaunted Promotional Working Group. Has Brown discussed his concepts with Ecclestone?

NASCAR has recovered from a slump and paddock negativity © LAT

"I talk to him three days a week," is the instant response. But is Bernie listening?

"I think you know the answer to that question," Brown laughs. "He's very deal-driven, so I tend to talk to him more about sponsorship and voice my opinion on various topics. He listens and takes certain things on-board, and sometimes acts on them and sometimes doesn't. I talk to him all the time, share with him my views.

"I share my views with teams, I try and be vocal, but in a productive, constructive way. Everyone's equally frustrated, I don't think anyone up and down pitlane sits here saying 'Everything's great', not even Bernie. He's got his frustrations, trying to get [things] sorted. But I try and put my voice out there."

Should FOM invite Brown to head up its marketing division, either on full-time or agency basis, what would his priorities be?

"Good question. If you had a chief marketing officer for the sport, you'd have a head of communications, both external and internal comms. Example: new engine comes out, unbelievable technological feat that it has the fuel conservation it does, but what's everyone talking about? The sound. So your head of comms needs to get the right messages out to external audiences, proactively, and the right messaging internally.

"Internally being teams, drivers, sponsors, so they're all fully aware. So when someone's asked 'What do you think about the engine?' they're all on-message. That's comms.

"Then, sponsorship: social media, websites, etc. Partner maintenance meets, working more closely with promoters, so again, coming back to the drivers. My job is to make sure every promoter sells out."

Brown sees services such as social media being out-sourced, with traditional agencies creating brand campaigns, etc. "The sky's the limit on what you could spend. Should you spend a million or two in each race market? Now you're up to 40million (dollars), making for a total budget of around 100million."

However, that is less than ten per cent of F1's underlying revenues (after direct expenses, but before team shares, interest, tax and amortisation) - roughly in line with global marketing standards.

"If you look at the biggest marketers in the world, the big consumer goods companies, we're a decent consumer goods company, so it should have a substantial marketing budget. So, 100 million, yes and probably a core staff of 25, with bolting on certain expertise and agencies. Research is important, team support, being able to support them in their efforts to raise money, so it's probably every bit of 25 people."

That, though, marks an average of $10m per team, surely is a hard sell to Force India, Sauber and Manor, for example.

"Correct. But today Sauber really can't afford that 10 million - if we get this right as a group, they can in five years."

One final question: Does Brown ever talk to Donald Mackenzie, CVC co-founder and -chairman?

"Yes."

Does he take it aboard?

"He seems like he does, but it seems like he doesn't. They're hands-off management, and they're seeing what everyone else sees about the state of the sport. It made a ton of money and I think they're hands-off."