ABB on why its title sponsorship of Formula E is as much about brand reputation as awareness
Tech company ABB hopes its title sponsorship of Formula E will finally make it a global name. But the deal is also fuelled by an authentic support of the race’s underlying philosophy – in spite of its political and sporting controversies.
ABB’s team are the first to admit that when Formula E announced the Swiss engineering brand as its title sponsor, the prevailing global reaction was: ‘Who?’
“In the past, I think we were too humble as an engineering company to really portray what we were contributing,” said its head of brand, Nicolas Ziegler. “That needed to change.”
When he met with The Drum at the second in Formula E’s fourth season races in Marrakech, Ziegler and his team had only announced the deal with the electronic racing movement six days before. ABB started putting together footage for a promo film just a month ago. The mass of posters and hoarding around the Moroccan track were pulled out of the bag in a matter of days.
The speed in which the deal was signed, announced and activated is symbolic of how quickly things have moved internally at ABB when it comes to its marketing. The company, which has existed in various guises since 1883, put ‘brand’ at the heart of its core strategy just three years ago. Since then it has flattened the hierarchy of its global communications team to make sure it’s telling “the same storyline, the same look and feel”.
It has also streamlined its partnership strategy, going from sponsoring 2,000 events to putting most of its energy behind just one – Formula E.
The partnership makes sense. ABB is known – albeit largely on the B2B electronics circuit – for developing e-charging systems and working with local authorities to make cities smarter, cleaner and greener.
It’s these values that align with Formula E; it wants to bring racing to the heart of cities to create a cheaper, more democratic spectator sport than Formula One currently offers its petrolhead audience. The cars’ electronic batteries mean a quieter race suitable for children as well as adults, and the lack of emissions generates a tourism-boosting spectacle that does not endanger urban carbon targets.
“We will integrate [the sponsorship] in our brand communication and advertising, and we will push it strongly all over the world,” said Ziegler. “We are coming from a background where live communication is really key, but going forward you will see a lot of initiatives in digital too."
Alejandro Agag, Formula E founder, is on the same page as ABB. Referring to the small support of the sport in relation to the size and expense of the sponsorship, he believes the deal “confirms a change of paradigm”
“Big companies don’t have as their first motivation for a partnership the eyeballs, the TV audience,” he said. “That’s number two now. The first motivation is to be associated with the right message. A partnership like the one with ABB clearly shows that. They want to be with Formula E because it represents technology and environment and they are the messages big companies want to be associated with.”
He added: “We’ve seen it with Hugo Boss, with Allianz – all our new partners. And now we are renewing and extending our old partners like Michelin. The association with Formula E is the strongest appeal for companies and sponsors right now probably in the world of sport."
The partnership, rumoured to be worth 'nine figures' is, for Ziegler, “a wonderful platform to explain what we are doing and to make tangible what ABB is contributing”.
The screens at Saturday’s race, for instance, played a video of an ABB’s YuMi robot conducting Andrea Bocelli and the Lucca Symphony Orchestra, attracting the attention of attendees there to witness Formula E’s technology as much as the race.
But purchasing the title sponsorship (the season now has the rather convoluted title of the ‘ABB FIA Formula E Championship’) comes with a risk. The sport is a mere four years old and is yet to turn a profit. Its drivers currently lack the glamourous appeal of a Lewis Hamilton or Sebastian Vettel, and Formula One traditionalists have been quick to spurn its eco offering. There’s also an argument that as more cars on the streets turn electric, the desire to watch a spectacle fuelled by petrol will only become greater.
Formula E has also encountered political issues – not all cities like the idea of closing down their roads for an external event. Formula E encountered one of its biggest speedbumps last month when the mayor of Montreal, Valérie Plante, cancelled the 2017/18 season’s two-day final in the city after it was revealed her predecessor botched the attendance figures from the previous year’s race.
ABB’s president of electrification product, Tarak Mehta, has no problem admitting that the deal shows a certain amount of risk on his company’s part.
“We are a pioneering company,” he said. “Part of being pioneering is taking some risks.”
For Ziegler, any risks have been calculated, and re-calculated again.
“It’s about focus ... and it's also about choices,” he said. “It’s a partnership that suits us our strategy very well. It’s really a very good fit. It’s also about timing," Ziegler said. "ABB really had to do a lot of homework in the past three years but now we are entering a new, more positive phase so it was the right timing for this engagement.”
The head of brand will be looking at awareness metrics – particularly from the US – and also sales numbers when calculating the ROI of the deal. What will be less tangible to measure is the strength of ABB’s association with a sport that is young, fun and environmentally friendly – all attributes it hopes will rub off on its own public brand.
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