Brand Health Check: Formula One

Dwindling viewing figures, funding issues and accusations of predictability are threatening to reduce the commercial appeal of this multimillion-pound sport, reports Drew Barrand.

As the 2005 Formula One season gets under way, it would be a touch unfair to say the wheels have come off the sport's multimillion-pound global bandwagon, but it is enduring a rough patch. Its TV ratings have shown a steady decline, while internal strife has led to the prospect of the car manufacturers forming a breakaway circuit.

Critics may point to the overwhelming dominance of Michael Schumacher and the Ferrari team as the primary reason for the decline in interest; the German driver has won the last five World Championships. Complaints that the outcome of the races is too predictable has made it difficult to attract new viewers to F1, while existing fans are also switching off.

In an effort to level the playing field, the sport's governing body altered the technical regulations to which the cars must adhere, but, in spite of these changes, Ferrari has continued to dominate.

The sport is also facing funding issues for the first time. The advent of a ban on tobacco advertising has removed a source of much-needed sponsorship. This has hit the smaller teams, as illustrated by the absence of the Jaguar team on the starting grid for the opening race of the season.

Despite its problems, F1 still holds significant appeal. The global circuit has been increased by one race, to 19, this year as expansion into new markets continues, while the Royal Bank of Scotland and Diageo have committed to multimillion-pound sponsorship deals with the Williams and McLaren teams respectively.

We asked Tim Crow, consulting director at agency Karen Earl Sponsorship, and Nick Downes, managing director of design and branding consultancy Interstate Associates, who is working on the new F1 circuit in Bahrain, how the sport can use this platform to reinvigorate itself.

DIAGNOSIS 1 - TIM CROW CONSULTING DIRECTOR, KAREN EARL SPONSORSHIP

The past few years have been dismal for Formula One. On the track, Michael Schumacher and Ferrari - geniuses though they are - have destroyed the sport as a spectacle: everyone knows who's going to win, so why watch?

Off the track, F1's commercial king, Bernie Ecclestone, and the car manufacturers that run the teams have been locked in an acrimonious power-and-money struggle, which looks set to result in the latter breaking away to create their own rebel series by 2008.

In light of this, no one can blame the fans, media and sponsors, on whom F1 depends, for all saying the same thing: whoever wins, we look like losing.

Turning that around quickly is the big issue for F1. Although it will be far from easy, given the entrenched positions of the various parties, if F1 can get its act together, it is onto a winner.

Few sports can rival F1's combination of speed, glamour, drama and technology, and there is no doubting the fans' appetite: remember the hundreds of thousands who turned up for the parade of cars through London last year?

REMEDY

- Stop washing your dirty laundry in public. Lock yourselves away and don't come out until you have a unified business plan for the future.

- Give the fans, media and sponsors what they want: compelling and competitive races, not Schumacher-led processions.

- Spend money on marketing to rebuild the brand's reputation.

- Do not ignore F1's European heartland.

DIAGNOSIS 2 - NICK DOWNES MANAGING DIRECTOR, INTERSTATE ASSOCIATES

There are 19 F1 races this year including China and Turkey; 'hot' markets, where F1 has little penetration. The weakest teams have ambitious new owners - Red Bull and HSBC - while rival banking group Royal Bank of Scotland is now a sponsor. There is no lack of interest.

So what is the problem? Perhaps the F1 brand is too internally focused.

This has created a highly aspirational brand and media platform that is no longer in touch with the fans.

There is little investment in the brand and product development. The brand is an output of the spectacle, and if the spectacle is flat, so is the brand. It should be the sum of its parts - teams, drivers, events - not of its most successful players.

In the past, F1 was less predictable. James Hunt, the playboy, and Colin Chapman, the inventor, were a dramatic mix, and the cars were distinct.

Now the sport is strictly regulated, with drivers conforming to corporate correctness in deference to multimillion-pound sponsorships. At least the Red Bull Racing boss has told David Coulthard to miss a shave and have fun.

REMEDY

- Improve the Formula One brand's external focus.

- Connect with the F1 fan and customer base.

- Recreate the balance of safety versus glamour by positioning Formula One as the safest 'extreme' sport in the world.

- Make sure that the F1 brand represents the whole global show.

- The sponsors could hold the key to a more in-touch F1.

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