Motorsport sponsorship in its simple form is when companies agree to give financial support to Motor Racing teams in exchange of putting their company logos on the race cars so as to put across their message to potential customers. Motorsports is a capital intense sport and therefore teams require sponsors to help fund their activities. From the rough and rugged rally to the swift and sophisticated F1, many fans flock these tracks and venues to cheer on their various teams in the pursuit of glory. It is these fans that are the drive and motivation behind sponsorship deals. Their potential as customers to their brand is what drives the sponsors to make deals with teams so that these people may see their message and hopefully add to their client base and increase their market share in their respective fields.
Advertising through liveries on vehicles, logos on driver uniforms and track signage is how sponsors drive their message home. There are different types of sponsorship available to companies in motorsports: Companies could decide to sponsor the award given to the winner, a particular driver, the naming rights of the venue, official supplier rights, endorsement agreements, broadcast sponsorship etc. Due to this, companies use a lot of capital and resources in determining what to sponsor, how much to sponsor, where to have their logos etc. All these decisions have to be made with the profit factor in mind because the sponsors want to have a good return from their sponsorship investment.
Sponsorship however, is not just about a sticker on the race car, clothing of driver etc. It is about a mutually beneficial partnership between the sponsors and the racing team. The racing team benefits from the point of view that they do not have to worry about the financial burdens as the sponsors handle that; they only need to concentrate on performing well in their competition. The sponsors benefit from the media coverage they attain from the advertising of their logos. Due to the fact that the teams only concentrate on one thing, the likelihood of success increases and due to their success the sponsoring companies also benefit as they are affiliated to a winning team and reach a larger audience since people love winners. This brings about brand loyalty as fans notice the companies that support their favorite teams or racecar driver. The sponsors could also use their sponsorship to form some rapport with their existing customers or potential customers as they remove the strict formal nature of business meetings if they entertain them near the racing teams or in the races. Sponsors do not only get returns when there are active ongoing races but also through sponsorship management firms which provide exposure for a team’s sponsors away from the track.
The Sponsorship Management departments of the racing teams are the ones usually in charge of: Maintaining liaison with existing sponsors; ensuring that the contracts are maintained and coordinating with the other areas e.g. Communications, merchandising, licensing etc. The other role is to find new sponsors by carrying out market research, looking at the legal aspects such as marketing rights, evaluating sponsorship proposal etc.
Even with all of this sponsorship the sponsors must still adhere to the rules and regulations of the specific motor sporting event e.g. some sponsors like the ones in the Tobacco industry are banned in some events. It should be noted that without sponsors motor sporting races would be only for a select few as they would be the only ones able to afford the cost of managing and maintaining a racing team.