Google Delivers Better ROI than Major Sport Sponsorship By a Mile

Formula 1 (F1) is the highest class of open wheel racing and is a very popular motor sport in Europe, which is becoming globalised. Each seasons eighteen races will be watched by more than a billion viewers. It is also a multi-billion dollar industry. For those in the USA who are less familiar with F1, the cars look similar to Indy cars, except they race on a circuit as opposed to an oval. While Indy is a Burger and Beer type of atmosphere, F1 is Champaign and Caviar.

F1 is an abundance of excess and glamour, many major A-List celebrities are seen at every race rubbing shoulders with their favorite team and drivers.

So you would think you would be safe to believe that sponsoring a team would be great for your business and make your sales shoot through the roof? Not so. Notice the traffic trends below, kindly supplied by Robin Goad from Hitwise.

This chart shows two companies that sponsor one of the oldest teams, Williams F1. They have been racing successfully for thirty years.I chose two companies who haven’t sponsored a team before and don’t have a well know brand yet. This would give us a good idea as to how effective the sponsorship actually is.

The blue line shows a clothing fashion label called www.allsaints.co.uk, it shows a doubling of traffic at the start of the year. It is unclear what marketing efforts account for this at the start of the year. However, it is well before the F1 season starts and doesn’t seem to be associated with it. The traffic is still comparably low, suggesting they are getting less than 200,000 visitors per month.

The next company is called www.mydiamonds.com, a high end jewelry retailer. Unlike the previous example at the start of the season you can see a rise in traffic. However, the traffic does not really climb to any sort of substantial level. This would indicate that they only have a couple of thousand visitors per month looking at the graph. Take into consideration the amount they are paying to be a major sponsor of the team, and you’ll see that the direct return is extremly poor and does not represent good value in terms of ROI. My understanding is that they are paying between $5 Million & $10 Million dollars PER SEASON. Their web address is placed prominently on the rear wing of the car and gets a significant amount of TV time.

Give me a $10 Million dollar budget and I’d give you a return which is thousands of times better than what they are currently getting. I also checked their backlinks and they have fewer than 100!

Think carefully before investing in offline advertising or sponsorship which is costly. One maybe wiser and make a much higher return in a shorter timeframe to use Google and other major traffic generators.

3 thoughts on “Google Delivers Better ROI than Major Sport Sponsorship By a Mile

  1. Advertising a fashion label and a jewelry store at a motor racing event… Wow.. I think they missed their target market by just a tiny little bit.

  2. Imagine 10 million dollars sitting in your lap and the better things you could have done with it:

    1.) Build a more user friendly website
    2.) Pay someone to actually optimize your website
    3.) Pay a top notch blogger to write about jewelry
    4.) Pay a team of online PR practitioners to spread the word via social media & other means
    5.) Still have plenty left over to sponsor events that actually get press coverage

    I agree. This is a colossal waste of money

  3. […] Google Delivers Better ROI than Major Sport Sponsorship Christopher Angus writes on PingPongPie about a company that sponsored one of the oldest Formula 1 Racing teams and saw only a disappointing increase in sales. This is a great example of expecting that a sponsorship by itself will lead to more sales; it won’t! Tie a promotion in with your team, though, and now you’re cooking with gas! […]

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