Professional motorsport can be brutal at times, but one maxim usually rings true – success on the pitch (or the race track, for that matter) often leads to success off it. Take the case of Oracle Red Bull Racing.
On the back of Max Verstappen’s breakthrough F1 season triumph and only weeks after Red Bull's most successful car launch to date – the new RB18 car didn’t quite live up to its hype at the first time of asking at the season opening Bahrain Grand Prix.
Three rounds in, and there are still technical issues. Although defending champion Max Verstappen won in Saudi Arabia, his sole success this season has been bookended by mechanical failures in Bahrain and Australia. Teammate Sergio Perez has had a more consistent showing and is currently fourth after securing second place in Sunday’s Australian GP.
On the track, few doubt that the team and Verstappen will roar back into contention, once teething problems with the new generation RB18 are resolved.
It is not just in the paddock that Oracle Red Bull Racing has been turning heads in recent seasons. Their growth off it has been just as impressive with a burgeoning commercial programme and fanbase helping the team overtake fierce rivals Mercedes in the fan stakes, according to one observer.
In the off season, Red Bull secured what has been described as the most lucrative sponsorship deal in sport. Oracle became the title sponsor of Red Bull Racing, reportedly for £74m per season, over five years. The team also signed a world-record sponsorship deal with cryptocurrency exchange Bybit worth $50m (£38m) per season over three years.
Such deals will provide a huge boost to Red Bull Racing’s balance sheet. In 2020, the team reported turnover had dropped to £230m from £245m the year before, largely due to the impact of Covid. Its post-tax profit is about £723,000, according to the latest filing in Companies House. The 2020 figures represent healthy growth from 2017 when its revenue was £198m and profit £385,000.
Rob Mills, chief executive of the sports marketing consultancy Tenka Group, has been monitoring the success and rise of F1 and Red Bull Racing in recent years.
“They’ve invested heavily in digital and social media, put on more races and revolutionised the way it is packaged. There are also new Japanese and Chinese drivers, which provide a lot more relevance on key growth markets,” he says.
“From an audience and sponsorship perspective, no other league can deliver that audience across such a broad diversity of countries. If you are a Heineken or DHL with global appeal, it’s a very attractive proposition.”
Mills says that Red Bull Racing, in particular, has led the field in growing its off-track popularity. After growing its fanbase by 18% to 92 million fans, he told Campaign that Red Bull Racing has now overtaken Mercedes as the second-largest supported F1 team behind Ferrari.
“There’s a brand essence that comes from Red Bull that really aligns with F1; it’s about taking risks and high speed,” he says. “Mercedes is more of a traditional auto brand versus the Red Bull Racing upstart. The better the cars have become, they’ve also gotten cleaner in terms of their design. Logo exposure is important in F1 and brands recognise rights to associate with premium racing property and all of the glamour and prestige that brings.”
There have been several factors widely acknowledged for growing the sport, its fanbase and commercial appeal since it was acquired by Liberty Media from Bernie Ecclestone in 2017.
“It’s my fifth year at Red Bull Racing and when I joined was around the same time Liberty Media bought F1 off Bernie,” Red Bull Racing chief marketing officer Oliver Hughes tells Campaign.
“I was quite surprised at the first race I went to that someone told me: ‘You are not allowed to film content and post it to social media.' The Liberty Media guys went through a big process of knocking down barriers to say: ‘let's open up a sport, we've got to embrace our fans a lot more.’”
Liberty Media did this in several ways. New broadcast rights deals, such as the one struck with UK broadcaster Sky Sports, provided far greater behind-the-scenes access to drivers, pit crews and team principals, such as Red Bull Racing’s Christian Horner.
Formula One collaborated with Netflix to produce a fly-on-the-wall documentary series, Formula One: Drive to Survive, which launched in 2019, and has been widely credited for introducing the sport to new audiences. This has been pivotal to expanding the sport’s global appeal in markets that traditionally have been harder to crack, such as the US, which has had a stop-start relationship with F1 over the years and its own domestic IndyCar and Nascar sports to compete with.
“A big driver in growth was the Netflix deal with the Drive to Survive series. Previously, if you were an F1 fan, you’d have to put in hours and hours to follow the sport over the weekend, while the Netflix series distilled a whole season into 10 to 12 episodes and really condensed the drama," Hughes says.
"That has been really good, certainly in places like the US, where people are suddenly going: ‘Oh, wow, this sport is really interesting, I really want to follow more of the drama.'”
This season there are two races in the US, in Miami and Austin, with a third planned for Las Vegas in 2023. Last year’s Austin GP was a sell-out, with 400,000 fans attending, and tickets for this year's Miami GP have also already sold out.
It's not just the US where the sport has expanded. In recent seasons there have been several new races held in the Middle East and Asia, with some European GPs likely to give way to accommodate F1's expansion into new markets.
Hughes tells Campaign this expansion and the growing popularity of F1 is important for Red Bull Racing’s commercial proposition to sponsors.
“Having record-breaking attendances shows that people aren't only just watching F1, but actually they now want to participate. The reason why that's important, from our side commercially, is we've evolved deliberately in the same way," he says.
"So we went from being a proposition to sponsors of ‘here’s your logo on a car for X price and hospitality at a racetrack, to being ‘how do we put the fans at the centre of what we're doing. We're going to connect you with a really vibrant, highly engaged community of fans that you can talk to'.”
Red Bull Racing's Max Verstappen and Sergio Perez at the launch of the RB18. Verstappen's style and success has helped the brand grow globally, and Perez has elevated Red Bull as the most popular team in his native Mexico.
The rise of big tech in F1
The global expansion and popularity has also provided benefits for F1 teams in attracting new sponsors to the sport. F1 has been synonymous with certain brand categories through the ages.
Tobacco brands used to be the dominant sponsors in the 1980s and 1990s and were present up until they were banned in the mid-2000s, although "big tobacco" does still sponsor some F1 teams under their "research" brands.
Then, sponsorship shifted to large telcos, but in recent years there hasn’t been a dominant category, per se, until now.
“I think what you're seeing with the advent of the sport growing in the US is suddenly we're becoming a really, really vibrant place for technology brands to tell their stories. So, with us, it's Oracle, and McLaren has just announced a deal with Google. It's the first time we're seeing big tech brands go 'actually, this is really good for us to tell our story',” Hughes says.
It can be argued that the synergy between technology brands and F1 is a neater fit than with tobacco brands.
“Formula One is a race between great drivers, but actually it's a technology race just as much as anything else,” Hughes adds. “The speed at which you can develop your car is really the difference between winning now and losing races; the car is never the same car in any one day and is just a constantly evolving prototype.
"The more you utilise technology to get the results without spending the money, the more likely you're going to get a better output. So we've heavily shifted our commercial proposition to really look for tech brands that make a difference to performance.”
Oracle's record-breaking sponsorship of Red Bull Racing is an example of big tech's growing interest in the sport.
The story behind Oracle’s sponsorship
This shift in mindset is one aspect that opened up Red Bull Racing to Oracle as a partner. The technology giant had been looking to establish its credentials as a major global player in cloud technology. Its owner, Larry Ellison, is a keen sailor and tennis fan and has previously sponsored both sports, most famously as a key sponsor of the American team in the America’s Cup.
Ariel Kellman, Oracle’s global CMO who joined in 2020, had previously worked at Amazon Web Services and with its team that partnered F1, and has been a key proponent of the tie up with Red Bull Racing.
“Trying to sell a story about something like technology is very hard with a footballer or with a tennis player. You can certainly do it in sailing, but what they're looking for is how do they vibrantly bring that technology story to life,” Hughes says.
“So we did our first deal with Oracle almost a year ago, it was a year of developing ideas, so much so that they saw the value so quickly. They saw the engagement from their customer pipeline develop so rapidly that they wanted to do more with us and that's why we are Oracle Red Bull Racing now.”
A key benefit of the partnership for Red Bull Racing was using Oracle to power its CRM and fan platform, as well as provide technical support on machine learning and AI and other aspects that allow it to build faster cars.
Oracle used its CX tools to build a powerful CRM for Red Bull Racing from scratch, which has been a game-changer for how the team communicates with its fans.
“In less than a year, we have a fully functioning CRM platform, we're now able to capture fans' data and have our loyalty programme in the paddock. That was key to our new car launch, we now know much more about our fans,” Hughes says. “We are now able to tailor what we're doing to our fan base, rather than it being a one-size-fits-all approach.”
Building a clearer picture of the fan profile has proved invaluable for Red Bull Racing and allowed more effective communications.
Max Verstappen attracted a new generation of fans, and their children, at the recent Australian GP. Red Bull claims its fanbase is, on average, seven years younger than rival teams'. Photo: Getty Images.
A ‘younger gender neutral’ fanbase
Hughes says some of the key learnings have been that F1 fans have an “insatiable appetite” for data and information about the process of getting that car on track and how to constantly develop it to become faster.
“The other thing we found out is our fanbase is a lot more global than we may have expected. We're almost gender neutral. So almost every F1 team will probably tell you that about 90% of their fan base is male, actually, what we found is we're almost 50-50,” he adds.
“The other thing you often hear about in F1, is the fan base is getting older, actually, our fan base is, on average, seven years younger (mid-20s) than every other team. We're attracting almost a gender-neutral – and a younger, gender-neutral – fan base, which I think is really interesting.
He continues: “What we're seeing with new fans coming into the sport, where you would traditionally have seen the Ferraris or the Mercedes or the big OEM (original equipment manufacturer) brands of the world being the kind of entry into the sport, actually they're starting with Red Bull.
"Because Red Bull is a product that they can relate to and own from a young age [although not under 16, Hughes stresses] where you might not be able to own a Ferrari ever or at least until later on in life.”
Engaging with this audience poses new challenges for a sport that has traditionally skewed to older demographics and the luxury market. Red Bull Racing launched on TikTok last year and is using apps such as Discord and Twitch as well as more traditional social media.
Hughes admits Red Bull Racing is “constantly learning and evolving” and hasn’t “cracked it” just yet, but its campaign to launch the RB18 yielded unprecedented results.
Red Bull Racing used about 6,500 fans to broadcast its RB18 launch
Launching without paid media
For the first time in Red Bull’s history, it didn’t spend a dollar on paid media, which would usually be handled by its media agency PHD, by adopting an earned and owned media strategy.
Once it had worked out the narrative and elements to create an engaging piece of content, it used the Push Live platform to help with distribution.
“If you work with a media agency, it would cost millions and millions of dollars to hit the audience you want to reach,” Hughes says. “But we have the insight that we have a highly engaged fan base, so we actually thought, 'why don't we get the fans to tell the story for us?' And this is where the Push Live platform is excellent. We were able to work with them and asked our fans who would like to launch this with us.
“We had something like 34,000 fans express an interest, which was way way more than we expected. The Push Live platform vetted this down to nearly 7,000 fans who could broadcast the launch for us using modularised creative elements and in the style and platform of their choice, whether its YouTube, Twitch or whatever.”
The RB18 launch was simulcast on more than 6,400 channels across YouTube, Twitch, TikTok, Twitter, Facebook, LinkedIn and elsewhere (see example below).
More than 5.7 million fans watched the launch live, which grew to 9.2 million views in the week that followed. There have been mre than 331 million impressions, so far, about the Red Bull Racing launch.
“They could give their message to their fan base in the way that they want to receive it, but we were able to control the elements that we wanted to control as well,” Hughes says. “We really empowered fans to tell the story for us. The main thing about it is to look at the end results. Our metrics on every single platform absolutely destroyed our competition and we can say we spent not a single penny on media.”
What does this mean for the future of paid media? PHD declined to talk about its role with Red Bull Racing, but Hughes says there will always be a role for paid media in the right context.
“When we're going on that exploration for new fans, we will most likely pay to hit new audiences, so there's definitely a role for it,” he says. “But we are seeing an evolution in how we engage with our fanbase and there are huge efficiencies that we're seeing by not spending on the media so that we can invest in the content. I think that's really important.
“I don't see the media budget decreasing, I just see it being spent on other areas. We don't need to spend on media to reach our fans, but what we are doing is launching into new areas. We have a new commercial relationship with the crypto company Bybit, as we're trying to push things like NFTs, or whatever else it is, we can actually now invest that media to go after different audiences.”
What does the future hold?
Engaging with partners in new categories as well as further geographic expansion are two areas that Red Bull Racing is keen to grow. Formula One’s move into the US has certainly unlocked opportunities, such as the Oracle sponsorship and new fans, while its move into the Middle East marks another region that grows the sport among new and wealthy audiences, although some new races have faced a backlash over the human rights record of countries hosting the events.
Hughes would not be drawn on his views about F1 moving to countries such as Saudi Arabia, where some have questioned whether the sport is being used for sportswashing. However, he did say that further geographical expansion was important for the sport.
“Although we're tapping into Asia, we are still not fully realising the potential of Asia. We saw great growth in Japan through our relationship with Honda [Red Bull Racing’s engine manufacturer]. But I think there's more we can do, and China's fairly untapped,” he says
“I'd love to see F1 return to Africa [the last GP held in Africa took place in South Africa in 1993],” Hughes says. “And to tap into a fan base in Africa. I think that's a huge untapped potential market.”
On the sponsorship front, Hughes observes more non-endemic brands entering the sport and using Red Bull Racing as much for its ability to connect with a highly engaged fanbase than driving a car first to the chequered flag. Recent examples he notes are PokerStars and Bybit.
“The partnership and sponsorship landscape is constantly evolving. We've always wanted partners that can provide something that makes the car go faster, so your story is the car,” he says.
“What we're seeing as we grow our fanbase, and grow our fan tools, is suddenly other brands actually want to connect with us like a media platform. I can see that side of the world increasing, and maybe that changes the kind of deals we do going forward. But I think that's an important growth area.”
Few sports have enjoyed the global appeal, marketability and growth of F1 in recent years. In many ways, Red Bull Racing is leading the charge on and off the racetrack and evolving how it engages with fans and its marketing channels as rapidly as it evolves its racing tech.
Indigenous Australians, accompanied by a large cut-out of Max Verstappen, perform a welcome to the country at the Australian GP. It was not Verstappen's day, but will it be Red Bull's season? Photo: Getty Images
Red Bull launch photos: Getty Images/Red Bull Content Pool