In an interesting interview with Campaign Asia, Formula 1 boss Bernie Ecclestone has addressed some very interesting questions put forth by Atifa Silk. It’s the type of interview you would have thought one of the major racing publications would have gotten but nonetheless, it is worth a read.
In the article, Ecclestone explains his thoughts on brand and brand-building in the context of F1 and in general. Inevitably, the question of younger demographics comes up and he has an interesting take on the issue. In particular, how would F1 expand its audience base?
“I’m not interested in tweeting, Facebook and whatever this nonsense is. I tried to find out but in any case I’m too old-fashioned. I couldn’t see any value in it. And, I don’t know what the so-called ‘young generation’ of today really wants. What is it? You ask a 15 or 16-year-old kid, ‘What do you want?’ and they don’t know. The challenge is getting the audience in the first place. I say to some of these people who start this nonsense about social media, look at what tobacco companies tried to do—get people smoking their brand early on because then people continue smoking their brand forever.”
When prompted about using social media to expand fan engagement, Ecclestone said:
“If you have a brand that you want to put in front of a few hundred million people, I can do that easily for you on television. Now, you’re telling me I need to find a channel to get this 15-year-old to watch Formula One because somebody wants to put out a new brand in front of them? They are not going to be interested in the slightest bit. Young kids will see the Rolex brand, but are they going to go and buy one? They can’t afford it. Or our other sponsor, UBS—these kids don’t care about banking. They haven’t got enough money to put in the bloody banks anyway. That’s what I think. I don’t know why people want to get to the so-called ‘young generation’. Why do they want to do that? Is it to sell them something? Most of these kids haven’t got any money. I’d rather get to the 70-year-old guy who’s got plenty of cash. So, there’s no point trying to reach these kids because they won’t buy any of the products here and if marketers are aiming at this audience, then maybe they should advertise with Disney.”
It’s an interesting view from short-term ROI to long-term brand building. While I agree with some of his sentiment, I can also say that watching F1 when I was a young boy exposed me to Omega watches and when I was old enough and had the means, I purchased one (not a TAG, who was the sponsor of F1 at the time of my purchase). I could say the same about my penchant to drive out of my way to get Shell V-power fuel having stared at that pecten for decades.
On the other side of that coin, when you wax poetic about all that Twitter, Facebook and Google have achieved—and it’s quite a lot—what is it’s disruptive, innovative, world-changing business model? Communication, yes, but ultimately its selling advertising and at the end of the day, that’s nothing new, just a new medium such as TV, Radio or telephones were. The medium has evolved into a more engaging manner than before and that’s its appeal but the monetization is not unlike the system that drove newspapers, magazines and television.
Another interesting comment made by Ecclestone is in regards to using social media to build fan engagement and he said:
“How are you going to get all the fans to meet these drivers, who don’t even want to meet their girlfriends? You’re right that we should use social media to promote Formula One. I just don’t know how. They say the kids watch things on [tablets and phones], but it doesn’t mean they’re watching Formula One. And even if they are today, will they still watch it when they are 40? The world has changed so much in the last few years, and I doubt that’s going to stop. But with all the technology out there are limits to what we can do and the amount of time people can watch something. So, I’m not a great supporter of social media and I think we’ll find that a number of things will happen. Very shortly these companies like Twitter will be charging for anything that’s put on there that looks vaguely commercial. Otherwise they can’t stay in business. Their shares have suddenly dropped 10 per cent this week, and it’s because people aren’t using Twitter as much.”
He’s right with regards to Twitter. S&P gave Twitter a double-B minus rating and suggested the company may not see positive discretionary cash flow until 2016 given its current level of spending. Its debt was rated as junk on Thursday.
Ecclestone speaks to his reasoning for heading east to Asia in search of new race locations and how sponsors measure in the overall scope of F1. He also discusses one of the more pressing conversations currently in F1 regarding the loss of Marussia and Caterham and if this will have an impact on F1, saying:
“Not at all. Nobody will miss the two teams because they’re not front-running teams; they’ve only got a name that people would know because of the problem they’re in. If you want to get recognised you’ve got to do something. This poor guy in South Africa [Oscar Pistorius], for instance, has got more interest because of what happened with him than when he was winning gold medals. He won medals and afterwards nobody thought about him. If this case hadn’t happened he would have been forgotten, probably. Same with these two teams. You need teams like Ferrari. If you go anywhere and you say to somebody ‘Ferrari’, they’ll know what you’re talking about. If you say ‘Marussia’, they won’t. So that’s it. It’s brands again, isn’t it? Ferrari’s a brand and it’s a brand that’s particularly connected to a product and it’s known for that product.”
Ecclestone reckons it is an expense-side equation and this speaks to his criticism over the new engine regulations because, deep down, he knows it is a massive expense for small teams to absorb. He said:
“Just don’t spend as much. These teams don’t need to be in financial trouble. They need to think about what they have got to spend and do the best they can with that. Take Williams, for example. Years ago Frank [Williams] had a very small budget and was generally in trouble. Yet he always paid every dollar that he owed. He ran his team accordingly with the amount of money he could come up with. He didn’t have dreams about competing with Ferrari. Eventually things got better and he built the business and now he’s where he is today. It’s the same for everything in life, isn’t it, really? It’s the same problem with ladies and credit cards.”
Seems like maybe he has first-hand knowledge of some women in his life and their use of credit cards? Perhaps a behavior cemented by daughters Tamara and Petra?
Ecclestone isn’t oblivious to the changing world and when asked what makes F1 special, he said:
“People like winners and losers. At Formula One, you have one winner and a lot of losers. People can support a particular driver, or a team. Ferrari used to have such fantastic fan support and now they’re not winning as much, and you can see that their popularity has dropped off. In the old days you’d see people walking around with Ferrari flags and the whole place would be full of red. I don’t see that anymore. It’s quite strange because you don’t see people walking around with any flags or waving them like you used to. The world changes. It’s not a case of kids growing up; it’s a case of everybody growing up, growing into a different world. You’ve seen how it changes. What’s popular one year, isn’t the next. Now, there’s not as much noise from these cars as there used to be, so people are complaining. The good old days were actually the best. But that’s how people are. Women in particular like to criticise.”
He’s aware that it is a changing world and people resonate with different options in the competition for their time and viewing as well as devices they choose to view content on. What is interesting is his position on growing F1. He plainly says, it won’t grow when asked what is next for F1:
“I think we’ve got to wait a little bit for things to settle down. I hope it settles down and we are going to be able to retain the audience. We’re never going to grow it. The only sport that’s really grown—not by marketing but through availability—is football. You turn the television on and you’ll always see a match, whether it is the English Premier League or something else, even in Asia. It may not be live because of the time difference but they’ve captured an audience and they want to see what’s going on.”
He would know much better than I but I will say that North America could be a growth potential if they can crack the code on how to get embedded in this market. It’s a tall order and perhaps he knows it can’t be done but 107,000 people were in Austin and NBC Sports registered their highest viewership numbers for F1 in recent years so is there hope?
Regardless, it is an interesting read and you should check it out. He’s eccentric but there is a lot of truth in his commentary on F1 and he should know, he’s an Angel—you’ll have to read the article for that reference.
Lotus F1 responded:
— Lotus F1 Team (@Lotus_F1Team) November 14, 2014
Hat Tip: Campaign Asia