Red Bull use these events in lieu of advertising because they are better value for money, is the point being made in there amongst others. The investment per year that RB put into the team is small compared to the exposure they get out of it. They are an "edgy" energy drinks brand associating themselves with elite sporting performance.Shakeman wrote: ↑07 Feb 2024, 16:13People buying high-end Mercedes road cars like to tell themselves there is F1 DNA passed down into their sports car or road car. The sell is completely different for a can of water, sugar and caffeine. There's no F1 DNA on the ingredients list on the side of the can.mwillems wrote: ↑07 Feb 2024, 14:50There was an analysis of the ROI for Daimler's investment in Mercedes, they looked at all the print and digital coverage the brand got from the Merc F1 team and suggested that per year, to get that coverage it would be in the billions. At that time they were spending around £40m of their own money per year as the team were so well sponsored, it is now down to $30m.maxxer wrote: ↑07 Feb 2024, 14:30
Very true and ofcourse MV attracted alot of Dutch to F1 , Already alot of people were losing interest quickly.
These temporary fans enjoyed ofcourse the year of dominance , but they quickly move on to other sports.
Already last year such fans began moaning that it was getting boring if the same guy wins every race by far.
In the end they revert to not watching but just reading the results.
RB Marketing is more about extremes ofcourse.
It won't be much different for RB. They have very big sponsorship revenue aside from Red Bull. Sponsorship revenue alone is around $240m with $100m coming from Oracle each year. The turnover is near $400m with the team making a small profit. The money they put in will be dwarfed by the brand exposure F1 gives them in all sorts of markets around the world.
There were direct correlations in car sales and success also.
'RB gives you wings' works because everyone can afford a can of Red Bull, it's not an aspirational product like a Mercedes car, it's about little Johnny buying a can of red bull on the way to the skate park. I'd be very surprised if RB F1 spend results in more effective marketing than sponsoring base jumpers and free runners who rack up millions of views on social media.
To make a small profit as an F1 Team means the investment risk is high for little reward which certain factions within might see better use of the F1 budget going into less risky and higher reward ventures.
This is all supposition as no one on the outside knows what's really going on at Red Bull if there are any corporate in-fighting shenanigans at all behind the Horner allegations. I just can't see Horner being guilty of the more lurid allegations at all, I can see him being a challenge to work for but that isn't illegal.
They can spend much much less on sporting events that demonstrate actual high performance than they would paying to get into magazines, TV etc or sponsoring athletes and pretending they are associated with sporting performance. it doesn't matter what they are selling, it could be snake oil, it's just brand image and their method is brilliant, selling 10 billion euros of overpriced sugar and water per year.
The F1 team is the jewel in that crown and for what is probably around $60m per year, they get into televisions, newspapers, online articles and now onto Netflix in almost every country in the world for that investment.
Red Bull don't need any profit from their F1 team, they are already extracting enormous benefits from it.
A US national TV advertising campaign would cost around $342,000 per 30sec of air time, to broadcast, not even to make it. That's 170 runs for $60m. One run every 2 days, and no one is going to run that little. So you understand the cost benefit ratio here? They took this method and took it to another level.
Ferrari make more money from selling merchandise than they do cars. The revenue between the two is roughly equal, but the mark up on merchandise is much much bigger. They really do make money from selling the dream, not the product and the Ferrari F1 brand is a big part of that. So the ROI on an F1 team for some companies like RB is massive.