Why Shell still sponsor Ferrari and Schumi

9 December, 2009

Energy and petrochemicals conglomerate Shell is one of the oldest sponsors in Formula One, having been in the sport since the very first races were run in 1950. Here, Richard Bracewell, who is in charge of Shell’s global sponsorships, discusses the company’s long-running partnership with Ferrari and Michael Schumacher while gicing his views on the F1 sponsorship market.

Q: What is Shell’s sponsorship strategy in F1?
Richard Bracewell: The main reason we are in F1 is that it is a great technology platform for our products. We aren’t a straightforward sponsor, we’re a technical partner of Ferrari. Not only does the team use all our fuels, lubricants and other fluids (for example, in Ferrari’s KERS system) but we also have a team of over 50 scientists and technicians within Shell who are working on the Ferrari technology programme.

By developing our expertise in fuels and lubricants we can take those learnings and transfer them to the products we sell to everyday motorists.

But there’s also an awareness reason for our partnership. F1 provides us with the best platform to build awareness of those premium products. What we find is that there is a direct linkage between people who are aware of our partnership and their increased preference for the Shell brand as well as their increase in purchasing the Shell product. So there is a direct link between the products we sell and the sponsorship.

We are also proud to help the team. With the restrictions on engine development, the areas where you can make the difference are on the fuels and lubricants. Ferrari relies on us significantly to increase performance. Next year, with the ban on refueling, we will help further through increasing fuel efficiency. Again these developments will go back to the products we sell to motorists.

Q: What has made the Ferrari/Shell relationship last so long?
Bracewell:First and foremost it’s been about a passion for what we do. Ferrari is the most famous racing team, the most popular and I would say most passionate. The reason for its existence is to race. We have a shared passion for motor sport.

More recently, it’s about a true technological partnership. Ferrari completely rely on us for all their R&D developments for fuel and lubricants. We work extremely well with them. It doesn’t feel like we’re a sponsor, it doesn’t feel like we’re a supplier, it feels like we’re a partner.

Q: Shell also continues to sponsor Michael Schumacher, why is that?
Bracewell:: Michael is a very good brand ambassador for us. In the early years since he left Ferrari it was very much about his continued association with the team. But now he has become a very good spokesperson for Shell.
He is somebody who can talk about fuels and how he worked with Shell engineers when he was with Ferrari. And he is a very good spokesman on other issues. We’ve used Michael to talk about fuel efficiency but we’ve also used him to talk about road safety, because he’s a road safety ambassador for the FIA, and he’s doing work for us in parts of the world where road safety is a major issue.

A further benefit is that he is still one of the few people in modern day motorsport with a truly global image and recognition even amongst non-motorsport fans.

As part of our deal we have a certain number of days of Schumacher’s time which can be used for public appearances, making commercials, promotional work and so on.

Q: What is your view of the sponsorship market in this difficult financial climate?
Bracewell: There is no doubt it is a tough market. Shell has some high-profile sponsorships for which Ferrari is by far the biggest but we also have a lot of smaller sponsorships around the world. These tend to be with local race teams or drivers and other deals outside motorsport. But what we are doing is reducing the number of those sponsorships.

It’s harder to get value out of some of those smaller deals these days. They just don’t get the exposure. We get our value through the activation we do, through the promotional campaigns we run on Shell forecourts , through hospitality programmes, advertising and so on, which all require budget. But marketing budgets at Shell, like most companies, have had to be cut because of the times we’re in.

So we are concentrating on leveraging the big sponsorships that really make the difference and cutting back on the smaller deals that you can’t afford to leverage.

We are in a fortunate position that we are in a sport that still has huge global appeal and we’re with the top team in terms of awareness and fanbase. I think with sponsors of other teams it is more difficult because they don’t get the same global exposure that Ferrari gets.

Q: What effect have the recent rule changes in F1 had on your sponsorship and for the sponsorship market overall?
Bracewell: As long as those rule changes still allow for differentiation and innovation, especially technical innovations that you can take from the track to the road, then it is still viable for us to be in Formula One.

We were concerned at the beginning of the season when there was talk about major standardisation because we believe F1 is as much about the ingenuity of the different teams in terms of technology as it is about driver skill.

It is definitely a good thing that costs are coming down in the sport, as long as the right cost areas are being cut. But F1 has to react to the current environment and we all want to have stability in the sport.

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