Ferrari’s CEO, Sergio Marchionne, says Formula 1 needs to do a better job with digital media. Fans say F1’s anemic attempt at social media shows just how out of touch boss Bernie Eccelstone is with the change in cultural content consumption. F1 journalists echo F1’s weak social and digital media presence and efforts and many lists in magazines, papers and online motorsport news and blogs have offered digital and social media as a real Achilles heel for F1.
The Washington Post even discusses the rapid change in television viewing habits and how it has taken the industry slightly off guard—if not flat footed—leaving them frantically trying to adapt and protect copyrighted material while not missing the crest of the wave of potential increased audiences and revenue. The FCC wants to “unlock the box” and as the Post explains, this could be less a cable box and more a Pandora’s box.
I am not one of the pundits calling for the flogging of F1 in the public square where the mobocracy plies their skill of outrage in order to throw the proverbial toys from the pram with threats of boycotts and ballyhoo if F1 doesn’t get its s**t together and offer its content for free on Twitter. It’s not that I am old and out of touch, I work in the technology industry. It’s that I believe in prudence over pragmatism and I am actually very happy with what F1 has done over the last two years in slowly embracing social media and exploring digital platforms while still nurturing their terrestrial broadcast packages in order to keep Formula One Management (FOM) revenue high where teams claim 63% of it’s takings.
All the hip companies are doing it!
The world is changing and there is little doubt that consumers like…no, love…being the curators of their content, media, news and products. It’s a power shift toward the consumer that finds corporations becoming like shifting sand with whatever cultural moray is hot in social media so as to capitalize and make money on the emotion. They’ve wrapped their frantic profit-seeking ventures in social media terms such as profit with a purpose, pay it forward, giving back etc. Don’t fool yourself, their fleecing the meme.
That may play well with the kids in the backyard but for the adults in the parlor? Well, let’s just say I don’t fall for cheap parlor tricks. Meanwhile, Formula 1 is getting on with the business of business. They know the world is changing and they know they need to address it but there is nothing wrong with being fashionably late to the party—especially when you’re the only celebrity in town. There is no other series like F1 and while we can argue until the cow’s stagger home drunk, we need look no further than the juxtaposition of Formula 1 and Formula E.
Formula 1 vs Formula E…who does it right?
Formula E is the lovechild of the FIA and manufacturers intent on appealing to the green crowd and electric vehicle car sales revenue channel. While still nascent and single digit in total cars sales, they are intent on suggesting it is the future of vehicles and who am I to disagree? If they ever figure out how to store energy as well as we make it, I think it will be the future. Let’s not forget that electric cars were some of the first invented in the early 1900’s.
I have a letter from a great, great aunt—a woman of means—who was boasting to a friend about her new electric horseless carriage and how she hated those noisy, stinky petrol engines. This was early 1900’s proving once again, there is little new under the sun. I even have a picture she took of her sitting in her electric car.
The fact is, Formula E pummels social media with their content. I mean pummels! It’s relentless and you can tell they have marketing companies on full flogging detail to flood all forms of social media with their content. It’s, quite honestly, weak and desperate looking. With all of their efforts, you would think the entire world has stopped whatever it is they were doing, sleeping, eating, saving lives, deleting emails, working, what have you, and are watching the Formula E race.
I have nothing against Formula E whatsoever and I believe this is where hybrid or all-electric cars should live while F1 gets on with the business of racing and perfecting the continuing diminishing use of fossil fuels. With all being equal, Formula E draws a little over 6 million viewers per race according to Forbes while Formula 1, who the biomass claims to be woefully ineffective in social media, draws nearly 80 million per race. Hardly the social and digital media crisis many claim.
Damn Pay TV!
Much has been made over the switch to pay TV in the UK but you’ll not hear teams complain as F1 profits have increased by 18% and the value of F1 is pegged at $1.4bn. The more revenue, the more money the teams get and more races as well as more lucrative pay TV deals have played a heavy role in the increase. For better or worse, teams rely heavily on FOM prize money these days due to lack of or desire to find sponsors.
Teams and lack of sponsors
F1 knows that social media is a cheaper way to get company brands out there and penetrating targeted customers but it’s also a petulant child in its algorithm. Amazon is still showing me the same shoes that I bought months ago in the Google ads of websites I visit. It’s a waste of customers marketing cash if they don’t know I bought them already. Teams may be feeling the departure of sponsors for cheaper pastures with bright lights, youthful coders and sales pitches about big data etc but they aren’t being very creative in beating this message back and showing real, tangible marketing value in their product. It drives me mad to hear team bosses bemoan social media’s cheap appeal robbing F1 of sponsors. Come on!! Do it right. Brand your product, package your marketing appeal, create value-add deliverables that mean something to a sponsor, not just a bag with goodies and take the damn trade seriously. Don’t get me started on what they should be doing, I’ll prattle on for hours and who wants that?
The Forbes article is a good read for many reason. Some of Chris’s detractors will claim it’s a piece that’s simply pro Bernie but there’s a bigger picture here. While we’re all great at falling into the trap of the outrage mobocracy and taking the p**s out of F1, we’re missing the big picture. I think Chris has done a nice job of stating the Repucom report and drawing the positive from it as well as a few challenges and I appreciate his effort.
Put it all on YouTube for free dude!
I asked a Twitter follower who had commented on the lack of F1’s digital media strategy regarding an editorial I Posted. He’s a very nice person and answered that it is hard to get his friends interested in F1 without having the races on YouTube a week later like Indycar does etc. I appreciate his sentiment but that dog don’t hunt. F1 isn’t clamoring for an audience with over 400 million watching each year and the Mexican Grand Prix alone increasing TV viewers in Mexico by 500%.
What he wants is free content. All F1 races for free on YouTube. With all due respect, where in the world is that logic profitable? The ability to show your buddy an F1 race on YouTube is going to do what for F1? Gain another fan/viewer? That’s great but F1 could package that content and sell it to broadcasters for legacy F1 footage at a premium that this one fan wouldn’t produce over a lifetime of patronage. When given F1 races on YouTube for free, people aren’t going to pay and it isn’t going to keep F1 afloat and in short, F1 doesn’t need that kind of customer.
You can’t claim that putting F1’s content on YouTube or Twitter for free is going to stir something in you and casual or new fans that will deliver a tidal wave of profitability and revenue for the sport. It won’t. It will cannibalize F1’s content which is its only asset. That’s bad business period. Ask the music industry about Napster or iTunes or Pandora.
F1 is doing fine. Could it be better? Sure, they would probably tell you that as well but being prudent means wading into digital and social media cautiously and with an eye toward the monetization of the medium first. They must protect their assets and only engage in alternative content delivery where it makes financial sense to do so. Check out the Forbes article, it’s a good read and offers quite a lot on the state of F1’s viewership and health. I’m sure there areas where other pundits will take exception and I completely understand but I quote Pete Townshend, “no one respects the flame quite like the fool who’s badly burned”. Social and digital media is burning quite a few and any company would be wise to diligently walk slowly but steadily into the opportunity.
Hat Tip: Forbes