Do F1 sponsors earn any profits based on team wins?

Now I could be wrong here but it seems to me that as a sponsor you pay for add space on the car and/or the drivers suit and that where it ends. Your payback is when your ad is seen bu millions of people around the world and then they think yea I could use that product, then go buy it.

 

I don't think that they necessarily do better because their driver wins, but they do better because of the increase of exposure that is given to the winning team and driver. So they profit because of the increase of exposure that goes to the winner, not the fact that they won itself.

 

The sponsors do not "get paid" for results achieved by the teams they sponsor.

The sponsors earn their money from sales - the more exposure for their ads, the more sales they generate, or at least that is the hope

 

Isn't Marlboro still a Ferrari Sponsor- if not there chief sponsor
how the **** are the recouping that investment

 

may seem silly but they get the tickets...

same with ATT and williams, ATT does no business outside the states (at least for the general "public") and the only reason they are currently sponsoring Williams is for the tickets, $30 million USD a year to make some Exec's happy seems worth it in the grand scheme of things i suppose

 

If heard right durning a recent SpeedTV broadcast, I believe Bob Varsha said that Phillip Morris owned all the ad space on the Ferraris. They in turn sell that space to other sponsors.

 

I can tell you the more the UN kills off Tobacco advertising, the more cigarette sales are going up... People are going to smoke no matter what so having Marlboro as a sponsor only reminds people of what the government won't let them have and then they go get it. It's the forbidden fruit, kind of like the war on drugs here in the states, the more the idiots in the federal government fight it, the more people buy drugs... It's just stupid making something forbidden, look at Prohibition... Today Asian countries make up a vast majority of cigarette smokers but the numbers are also increasing here in the United States...

 

That's what I was just about to say. I think Phillip Morris is doing a smart thing still sponsoring the car and then basically leaving it blank. A car with no ads on it whatsoever is going to be talked about much more than cars with tons of ads on them. Whenever someone wants to know why the car doesn't have any markings on it the Marlboro brand name will be brought up.

 

Revenue return from sponsorship is only one factor in why businesses plough money into the sport. There are metrics which monitor exposure in terms of TVRs, print etc (TVRs are television repeats, not the fragile noisy British cars). It is proven that for equivalent media spend, the 'free' exposure is cost-effective compared to regular advertising methods.

But TVRs and page impressions are just one factor - sponsorship could better be expressed as 'affinity marketing', allowing brands to associate themselves with certain aspects of sport - be it individual drivers (and their personalities) or teams and their ethos. This can be effective for internal marketing, public relations, business-to-business marketing, and of course to the general public. This is why the drivers have many off-track pressures associated with sponsor (or partner) appearances and other duties.

The return-period from sponsorship (i.e. someone sees the link, makes a purchase decision and sets loose the money) is near-impossible to measure. The old adage of "win on sunday, sell on monday" no longer really applies; sponsorship serves to build brand awareness, association and interest/intent in consumers over time, hence why Marlboro is still a feature of Ferrari's affinity package. They agreed a huge deal for an essentially subliminal affinity arrangement over a number of years, and dominate the car's coverage, but they do not profit from selling of space to other brands - for instance Shell supply cash directly to Ferrari to the tune of around $70m per annum.

Hope this is helpful.

 

Actually its the other way around. The more the team wins the more expensive it is to advertize on them... to a point. Marlboro have a multi year branding contract, as does Vodefone etc... the market value increases with wins and "excitement"surrounding the team.
Even the Mclaren fiasco last year increased the exposure for all the teams sponsors, most people will not equate the $100,million fine with Vodafone, but will remember the circle swoosh that is their trademark. the old saying there is no bad publicity... still holds.

the more famous you are the more $$$ it takes to be associated with you! supply and demand.

 

Absolutely agree. A case in point being the relative lack of brand logos on Ferrari's car, compared to, say, the last Minardi. Big brands want 'clean space' around their brandmarks for clarity and exclusivity of exposure. This is reflected in the sponsorship ratecard which is priced essentially on coverage per square inch, factored against location on the car. Minardi were giving the space away almost, and their car looked like a patchwork of random brands - a moing catalogue.

Ferrari's rate card is the highest in the sport - too rich for Bacardi group who are likely to pull their Martini deal at the end of the season.