Formula One racing (F1) is by far the most expensive form of marketing that any company or enterprise will be involved with when sponsoring in sports. That expense runs on the surface, about $75 million for Vodafone regarding their partnership with McLaren in F1. To evolve their brand, Vodafone has left or is leaving many sponsorships including their marketing partnership with McLaren. Vodafone also will jettison their relationship with F1 (source: Bloomberg).
Money & politics
Vodafone, a giant international telecommunications business headquartered in the United Kingdom, has been involved in sponsoring the McLaren team for at least seven seasons in F1. In part, because of the world-wide recession, they’ve had a change in strategy as Vodafone looks to market using other types of approaches – so their relationship with McLaren and F1 will come to an end following the 2013 racing season. Vodafone stated that their
“brand is evolving, and we’ve concluded we will have less need for this kind of exposure in future.”
Another potential deal-breaker allegedly had Vodafone not in favor of running the event at Bahrain in 2012 after violence and turmoil in the tiny kingdom had erupted to the point of postponing and then cancelling the 2011 F1 event (source: Yahoo! Sports). It should be noted that McLaren is half-owned by the Bahraini government.
McLaren has had limited sponsors in the past and in fact, Vodafone was only the fourth major sponsorship in the team’s long and fabled 50 year history. Vodafone has used their sponsorship to help brand not only their own name but also Verizon Wireless of which they own 45%. Verizon was on the McLaren team’s livery for the United States Grand Prix at Austin, Texas, in 2012.
When it pertains to actual costs of a sponsorship like Vodafone was using with McLaren, there are more funds needed than the direct marketing dollars to the team. Activation of a marketing property requires additional advertising and ancillary marketing dollars to make the endeavor prosper. It’s not known how much extra funding was essential, but it’s not unusual for a marketing partner like Vodafone to spend two or three times the initial monies invested with the McLaren race team.
McLaren won a championship for Vodafone in 2008 with Briton, Lewis Hamilton aboard, but he has since moved on following the 2012 season and now drives for Mercedes starting this weekend in Australia. Hamilton was replaced by up-and-coming star Sergio Perez of Mexico. Interestingly enough, Perez had Telmex (another telecommunication giant) as a supporting sponsor while at Sauber before coming over to McLaren. It will be interesting to see if that marketing partnership re-evolves at McLaren.
Additional sources: McLaren Group