India Inc has stepped on the accelerator for the country's first Formula One Grand Prix by turning yesterday's extravaganza into a branding showcase.
Podium price:Cost of Formula One sponsorship
Title sponsor Cost US$30 million (Dh110.1m) to $60m.
Team title sponsorship gives the widest branding presence possible in Formula One and, due to the limited availability, is rarely available. It is usually contracted for a minimum of five years. Title sponsorship is usually incorporated into the teams’ official logos. Title sponsors currently include Red Bull, Vodafone, Renault, Virgin, Airtel, DHL and Etihad Airways
Official partner Cost $1.5m to $25m.
Approximately 200 companies sponsor F1, but a minority benefit from a significant branding presence on an F1 team: on the cars; and or drivers’ clothing. These companies are typically referred to as official sponsors or official partners. The visibility of their brand on a team depends on the level of investment. Those investing in the region of $7m a year will gain more exclusive rights such as grid access for guests. Official partners include Hilton, FedEx, Total and Kingfisher.
Official supplier and promotional partner Cost $500,000 to $1m.
This category is for smaller trade and consumer brands seeking access to F1 hospitality for client entertainment, advertising and promotional rights with a Formula One team. These companies are represented with branding in the teams’ garages and hospitality areas. Official suppliers and promotional partners include Puma, Symantec, Lenovo, Steinmetz and PPG.
Domestic household names such as Kingfisher, Bharti Airtel, Sahara, Tata and United Breweries (UB) all joined the party.
"It was high time sponsors paid attention to other sports than cricket," says Santosh Gaur, a businessman based in Mumbai. "Motorsports could really take off in India. There is more to competitive sport than IPL [Indian Premier League cricket]."
India's move into F1 has opened a new avenue for domestic brands, and in the long run this might offer golden opportunities.
"F1 works as a cost-effective way in which to quickly establish their brand in new global markets," says Tom Potter, the chief of Rush Group, which specialises in sports marketing.
"This can add to premium brand values by heightening customer perception of their products or services. This can also help establish new business relationships in some of the world's most important markets, both traditional and new," he says.
Motorsport is big business across the world, and India did not get a discount for entering the market.
Bharti Airtel, India's largest telecommunications company, was in pole position when it bagged the exclusive and ultra-expensive title of sponsor of the Indian Formula 1 (F1) Grand Prix for three years.
Airtel spent an estimated tens of millions of dollars on securing the privilege, industry insiders say.
"Airtel is a title sponsor, which means it will be around US$10 million (Dh36.7m) per year, possibly more," said one marketing expert who wished to remain anonymous.
Airtel was not willing to divulge how much money it is spending on F1 sponsorship.
Cash spent by F1 sponsors is now a closely guarded secret.
"Sponsorship spending is seen as trade secret and lot of companies are touchy because spending millions on an event that lasts just for a weekend could be seen excessive," says the marketing expert.
For companies that missed out on the title sponsorship, official partnerships were up for grabs - a snip at an estimated $5m per year.
The Indian brewery giant UB is reported to be an official partner and went into overdrive with promotional work.
If you were at the F1 race yesterday and do not like Kingfisher beer - tough. Kingfisher was the official beer for the entire circuit, and around town, little else was available.
Vijay Mallya, the flamboyant head of UB, was seen everywhere promoting his part-owned F1 team, Sahara Force India, alongside Kingfisher.
But despite all the marketing brouhaha, Indian companies still have a lot to learn, as the F1 culture in the country is still in its infancy.
"Few Indian companies have historically had an international or global business, but that is undoubtedly about to change over the coming years," says Mr Potter. "So to date they have been focused on domestic sports marketing, primarily the IPL of course."
The few million here and there spent in India is peanuts for a global brand that likes to flash some serious cash. Take the energy drink manufacturer Red Bull. The brand has spent more than $675m in five years on F1 sponsorship and has its logo emblazoned on two teams' cars, according to Margaux Matrix, a brand research group.
Margaux Matrix says the spending bore fruit as Red Bull, after which the team of this year's champion Sebastian Vettel is named, received 4 hours and 27 minutes of free television airtime during the first 15 F1 races last year. Only LG Electronics managed to obtain more coverage.
For a global player such as the US company Gulf Oil, creating the right association with the brand is a key to success.
"Endurance and inspiration are our key brand attributes. The company's orange disc logo has adorned many winning motorsports cars such as Ford, Porsche. Today it is the sponsor of Aston Martin's Le Mans racing team.
It has made its presence felt at the Indian F1 event, too. "Our participation will also be to host our partnering associates and customers in India and from overseas in a corporate box at this historic occasion," says Ravi Chawla, the president of the lube business at Gulf Oil.
Even for those companies left out of the sponsorship race this year, the event is seen as a huge networking opportunity with more than 200 of the world's biggest companies participating and about 30,000 business leaders attending the event.
F1 race meetings have been dubbed "Davos on Wheels", a reference to the annual meeting of the World Economic Forum in Davos, Switzerland.
"While a football or a Twenty20 IPL cricket match is over within a few hours and corporate guests are constrained to their seats or confined to a corporate box, an F1 weekend is a three-day networking show in an environment built for business," says Mr Potter.
Mr Gaur did not mind the seemingly non-stop logo blizzard.
"The brands [in F1] are just part of the business, like any sport. And if there are Indian brands, it's good news. After all, it's a good chance for us Indians to show the world what we can really do."
