Troubles on and off the track will not hurt our brand reputation permanently, say McLaren execs
It has not been the best of times for McLaren-Honda, as the team has yet to win or gain a podium place in a race after 14 rounds of the 2017 FIA Formula One season, with its last drivers’ victory coming in 2008 and constructors’ title in 1998.
However, speaking to The Drum ahead of the Singapore leg of the 2017 season at an event orgainsed by The Marketing Society, new executive director Zak Brown and chief marketing officer John Allert, remained bullish that the McLaren brand is round the corner from gaining former sporting glory.
Ever since Lewis Hamilton took home the drivers’ trophy for McLaren at the 2008 Brazilian Grand Prix, it has all gone pear shaped for the British team. At the management level, McLaren Technology Group founder Ron Dennis, who retired as team principal and handed over his duties to Martin Whitmarsh after Hamilton's win, came out of retirement five years later to launch a coup to sack Whitmarsh for mediocre performances on the track.
Dennis, who led McLaren to 10 drivers' titles with Niki Lauda, Alain Prost, Ayrton Senna, Mika Hakkinen and Hamilton, and seven constructors' championships, was then ousted by majority shareholders after falling out with them and was removed as chairman and chief executive.
It was a similar story on the track as an unprepared Honda, replaced Mercedes as McLaren engine partner in 2015, but performances dropped even further, resulting in the team losing million-dollar sponsorships from Hugo Boss, Santander and Johnnie Walker, in addition to headline sponsor Vodafone.
McLaren has since announced that it is dropping Honda for Renault next season, but has the damage been done? Is it too late for damage control now?
Brown, who took over Dennis' responsibilities as executive director at McLaren Technology Group at the end of 2016, admits that the team’s performance has hurt the brand image as it is not delivering brand value, which is winning. However, Brown is quick to add his belief that because McLaren has a long and illustrious history of winning, the brand has not been permanently damaged.
“You can market around year-by-year, up and down sporting success, not everyone always wins, but we have gone too long without our track success,” says Brown. “I don't think there is anything you can do to market around that. We need to get back to the front of the field and that is what we are trying to do.”
“We have had setbacks, all sporting teams have success and failures, which is what makes it exciting. It certainly makes it hard to bring in new partners when you are not in the middle of success, but we think that is right around the corner,” he adds.
Concurring with Brown, Allert explains that as a proposition, McLaren is a race team and also much more than a race team. “We are a technology group and we have a lot of interesting partnerships, although they might touch Formula One, actually have their bases in other technological projects or relationship,” says Allert.
“We also have some star drivers like Fernando Alonso and he has a certain marketability, that is certainly added to by being a winning team, but through the challenging Honda days, we have been deploying all the positive attributes of what we are.
“We are a brand that people like and respect, a brand that has technology and innovation at its heart and we have a fantastic drive lineup, and it has helped us get through these lean years,” he adds.
Brown reveals that since he took over, the company has put a big focus on its commercial ways of working, made a decent amount of changes with a lot of new hires and set itself up to be a more data-driven, flexible and adaptable partner to its sponsors.
“So far, we have been seeing some good results,” he says, noting that all Formula One teams have different personalities and while they are all really good, they are different. “McLaren has always stood for winning, precision, technology and luxury. So if you compare us with some of the other teams, they may not have those attributes. We have really tried to put that technology and innovation story, front and centre of the brand.”
Brown, a former marketer, stresses that a Formula One team, to be successful, needs a very successful commercial and marketing team. “We are a big brand and our brand not only includes our race team and drivers, and it is up to our marketing team to continue to make sure that the image and reputation is promoted and upheld by everyone of our brand ambassadors, which includes our thousands of employees.”
Formula One has gone through major changes on its own recently, with Liberty Media coming in as new owners and installing Chase Carey as chairman and CEO. The new owners have also increased digital engagement with existing and potential fans as a key strategy for the business.
Both Brown and Allert agree that the new direction is the way forward as the audience for F1 is changing because it is getting more engaged, digitally savvy and younger. “A more digital, social media savvy sport, which is now happening, will bring in more fans,” says Brown, noting that digital is how the younger fans consume their passions, whether its sport or entertainment. “We are seeing big strides being made by the sport and we are putting a lot of effort into that, and the fans are responding.”
“The audience has always been there for us, it is about us now as a sport engaging them. With the benefit of new owners coming in, comes a new vision and that is not just to expand the audience base, but to better engage those people who are already fans of the sport,” adds Allert. “So, their ambitions are consistent with our ambitions and we are working more collaboratively as a sport franchise than we ever have before. Ultimately, the beneficiaries of all that collaboration are going to be the fans, whether they are traditional, existing fans or potentially, the fans of tomorrow.”
Allert believes that in order to bring new fans, Formula 1 needs to maintain the perception of exclusivity, as well as simulate proximity to the sport, to the characters in the sport, the drivers, the sounds and smells, and the high-octane kind of entertainment that the sport delivers.
“Social is the perfect time and channel for us to use as a means by which fans can feel closer to the sport in the way they have never been able to,” he explains.
The sport, which currently holds races in Australia, Japan, China, Malaysia and Singapore, is also keen to add more Asian countries to its calendar. This is music to Allert’s ears, who believes that Asia has immense potential for the future of the sport, even though Malaysia has announced it will stop hosting the race from 2018.
“We look at growth opportunities in Asia with huge optimism and energy, it is one of the key priorities for us in terms of the geographic expansion of the sport and we are finding ways for us to unpack the Formula One story and the show to markets - Vietnam, Indonesia, Thailand and so on,” he says. “They are so many huge markets that Formula One never tapped into and the combination of social, digital and live events will help us do that.”
To enter untapped markets successfully, Allert asserts it is critical to keep in touch with fans through social media outside of the race calendar. “Not all roads lead back to social and digital, but those channels give us a chance to maintain a dialogue with our fans and stakeholders between races,” he explains.
Looking ahead, Allert shares his hopes that Formula One will not only be competitive within the sport, but also a cohesive whole when it comes to generating new audiences, stimulating new markets, driving value for our partners, maintaining its relevance against other sports and more recently, against other forms of entertainment.
“I am kept awake at night by the fact that my 16-year-old son does not watch terrestrial television anymore,” he says. “He consumes his entire life through a handset and we need to recognise that the generation of tomorrow is Formula One’s audience, and do as much as we can as a sport to engage and stimulate them, as well as nurture and reward our generation of fans as well.”
The new owners has already shown its determination to connect with millennials by launching its first official eSports series alongside its F1 2017 game, which is also in line with its plans to overhaul Formula One’s dated commercial model with digital, sponsorship and broadcast revenues.