Inside Infiniti’s Formula 1 marketing machine

Infiniti’s title sponsorship of the Infiniti Red Bull Racing team would be a success story even if one did nothing more than tally the exposure the brand has received by having its logo associated with the team and its star driver Sebastian Vettel—both of which have won four straight championships in one of the world’s most-watched sports. According to a team spokesperson, Infiniti got more than US$1 billion worth of media exposure from F1 broadcasts during the 2013 racing season alone.

How much Infiniti is paying for that exposure remains unknown, but it is certainly a mere fraction of what rivals like Mercedes pour into their wholly owned teams. Free from the overhead of team ownership, Infiniti is getting such a bargain that even Christian Horner, the head of the racing team, jokes about it: “These guys [Infiniti] have been very clever in how they’ve invested in their marketing. And we’ve been very cheap in giving them a very big sticker on the car.”

Andreas Sigl (pictured below), the man who championed the deal and runs the partnership from the Infiniti side as global director of Infiniti Formula One, certainly appreciates the brand’s good fortune in joining up with the Red Bull team just as it began its four-year dominance. But as he told Campaign Asia-Pacific in an exclusive interview at last weekend’s China Grand Prix, media exposure is not the end game. “Purchasing rights is the start of the process,” he said. “It’s not the end, where you kick back and let stickers drive in circles.” [Full disclosure: Infiniti paid the reporter's way to the event -Ed.]

A longtime marketer with experience at Audi and Intel, Sigl shared insights into how Infiniti decided to get into F1, why it chose the Red Bull team, how he activates the partnership and how the company measures its return on investment.

Ignition

Infiniti first started considering F1 involvement in 2010. At that time, the company had ambitious plans to expand to new markets and had strong products in the pipeline, but the brand positioning “needed work”, Sigl admitted. The mark at the time carried little cachet outside of North America, nor was it clearly distinguished from its parent, Nissan.

Challenged to propose action items to take the brand to the next level, Sigl focused on motor-sports sponsorship partly because it's all but a must for automakers, but also because buying brand equity through traditional media was not a viable approach for the company. As a path toward premium positioning, F1 “ticked all the boxes”.

The sport's geographic footprint matched up well with the brand’s target markets, including China, where Infiniti now has 65 retail centres, and Australia, where Infiniti used the 2011 Melbourne Grand Prix to announce its market entry. 

In addition, the sport offers unmatched reach: only the Olympics and FIFA World Cup rival F1 in terms of audience. And whereas those events are infrequent, F1 takes place every two weeks for nine months every year, Sigl noted.

Yet suggesting a full-on charge into F1 team ownership would have been a “career-limiting move” at the time, Sigl said. Automaker-owned teams did not have a great track record, and the financial crisis had pushed some companies, including Honda and Toyota, to end their participation.

Hence the brand decided to partner with a team rather than to be a team. Red Bull Racing fit the bill in part because it was performing well and already used Renault engines (Renault owns a significant stake in Nissan). But more importantly, according to Sigl, the team looked like a good partner because its status and philosophy as a challenger brand aligned with Infiniti’s self-image.

The brand became a sponsor in March 2011, then doubled down to become title sponsor just as the team won its third consecutive championship at the end of the 2012 season.

Sigl and Horner both make a strong case that Infiniti Red Bull Racing is not a partnership in name only. “We have a great relationship with Infiniti on the technology side,” Horner said. He cited research into advanced materials and access to sophisticated simulation software as benefits Infiniti brings to the racing garage.

“As an independent team, they never had this kind of deep toolbox like Nissan Corporation and Infiniti can bring, Sigl said, noting that the automaker has 19,000 engineers, versus the racing team’s 400.

The upgrade to title-partner status extended the time frame of the partnership, so that it now makes sense to take on bigger projects and see them through, Sigl said. The fruits of those efforts will flow to both the F1 cars and Infiniti’s road vehicles, he promised.

To help highlight the depth of the technical partnership, the companies launched the Infiniti Performance Engineering Academy, which places young engineers at the racing team’s UK headquarters for a one-year assignment (see video).

The ambassador

As brand ambassador, Vettel carries the moniker “director of performance”, and Sigl minces no words when it comes to describing the driver’s participation. “A lot of people say that is a bullshit marketing title, but there is a more than just a name,” he said. “There is proper involvement from him.”

A big part of Vettel’s ‘day job’ is describing details of the race car’s performance to the team, and he contributes to Infiniti in much the same way. “He is very good at sensing a car, and giving that feedback to our engineers,” Sigl said. “And our engineers listen to him.”

Vettel has not hesitated to deliver constructive criticism when it was needed, which drives the engineering teams to greater performance, Sigl said.

The outcome of this interplay appeared first in a special Vettel-branded edition of the company’s FX model. More significantly, the brand announced at last week’s Beijing auto show that it had built and track-tested a ‘running prototype’ of the Q50 Eau Rouge, a high-performance model that Vettel has been involved with from early in its development (see video below).

The announcement means the vehicle is moving closer to actual production, where it would fill a gap in the company’s lineup and could cement Infiniti's cred as a performance brand.

Traction and telemetry

Sigl likens owning sports-sponsorship rights to having a claim on a gold mine. “Unless you invest in the excavators and all the infrastructure to get the gold out of the ground, you really don’t have anything,” he said.

He defined four required areas where Infiniti works hard to activate the F1 sponsorship, an effort that involves functional teams and stakeholders from across the company and its partner companies.

The first two areas are fairly obvious. Marketing has to be involved to, for example, manage driver appearances (such as Vettel’s celebrity race in Shanghai before the China Grand Prix) and create ads. And public relations drives earned media coverage.

Less obvious, Sigl and team have spent considerable time over the term of the partnership on educating the company’s distribution and retail partners on how to make the most of the F1 buzz, especially when the event comes to their countries. The final area is folding F1 expertise into product development, as Vettel’s involvement illustrates.

Just as a racing team obsesses over telemetry data, measuring and tracking every aspect of the car’s performance, Sigl analyses the trajectory of the partnership rigorously. The company has measures and KPIs in place for a whole host of objectives—global awareness, stakeholder engagement, employee engagement and brand perception.

Sigl shies away from describing the partnership’s impact on the bottom line—which admittedly is notoriously hard if not impossible to tease out—instead talking about “return on objective”.

“Of course we look at lots of reports about exposure, which is relatively easy to measure,” he said. “And you can argue either way whether it’s giving you the same return as paid media or earned media. That doesn’t matter so much as long as you have a consistent trend.”

All of the brands in F1 get measured by the same exposure yardstick, so performance relative to the other brands is a valid measure, he asserted. “You can argue that it’s voodoo signs, but it’s the same voodoo signs for everybody.”

A more important factor to measure is what’s happening in the customer’s mind. “That’s a slow-moving indicator, and we measure that every couple of months,” Sigl said. This involves a combination of quantitative and qualitative surveys delving into awareness of the F1 program itself, as well as broader brand attributes such as “premium” and “performance”.

“We see that moving,” Sigl said. “Hence our continuous upgrade and deeper involvement. But I would add that just as important is a qualitative measure of stakeholder engagement. Dealers vote with their budgets, so when Infinity in China is here bringing guests or doing other things to be more deeply involved, that’s a good sign. It shows people making investment in their local ‘excavators’.”