Formula for Success? On the Value of Motorsport Sponsorships

Over the course of the recent decade, sports sponsorships proved to be great marketing leverage for FX/CFD brokers. Obviously, football is the game to be played here, since it is the world's most popular sport with a global reach. It is no secret that the majority of FX/CFD traders are males. Therefore, it shouldn’t come as a surprise that motorsports, mostly followed by men, are not far away in the rankings of the most popular marketing platforms.

Racing sports, with Formula 1 as the top choice, are the second most often chosen form of sports sponsorship deals by FX/CFD brokers. Apart from football, it is difficult to find a sport with such a global reach and, most of all, one that is suited so well for the FX/CFD world.

Technology as a link between the industry and Formula 1

The combination of speed and technology is precisely what seems to naturally link the FX/CFD world to Formula 1. Without speed and technology, neither realm can exist in our day and age. Trading CFD or Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term instruments requires the right equipment, which is a proper Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term. Transactions need to be executed quickly and effortlessly. Everything has to be safe since the scenes operate right at the limit and mistakes may end up in tragedy

"Technology-driven decisions are at the heart of delivering improved performance in F1, and this is consistent with our approach at EightCap when it comes to delivering the technology infrastructure for traders to run MT4 and MT5 on"-Ollie Rosewell, the Chief Marketing Officer of Australian broker EightCap, told Finance Magnates.

How much does it cost?

While teams do not reveal how much they charge marketing partners for exposure on their cars, some scraps of information circulating in the F1 world allow us to estimate the costs. These, of course, may not represent the actual value of the contract but give a general picture of the costs.

As in any industry, the bigger the exposure, the more it will cost. In Formula 1, the largest sums are paid to become a title sponsor. This gives sponsors not only the biggest advertising space on the car but also puts their name in the official title of the entire team. A great example of such cooperation is the Mercedes team. Its full name is Mercedes AMG Petronas Motorsport. Petronas is a Malaysian oil and gas company, and the title sponsor of the Mercedes team. According to circulating rumors, their deal is worth $42 million annually.

To get the full article and the bigger-picture perspective on the costs of sponsoring in Formula1, get our latest Quarterly Industry Report.

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