Editor’s note: This story is reprinted with the permission of The Australian newspaper. The Formula 1 racing season opened last weekend, marking Lenovo’s debut as a major sponsor of the Williams racing team, which is based in the United Kingdom. Lenovo’ which has its headquarters in Morrisville, N.C., is the world’s third leading PC manufacturer.
MELBOURNE, Australia – Welcome to the world of business, Formula One style.
When Williams team sponsorship manager Scott Garrett looked down his wish list of sponsors eight months ago, the Chinese computer company leapt out at him.
Garrett was charged with plugging the gap left by the departure of the team’s technology partner of five years, HP. Lenovo, out to build its brand after the acquisition of IBM’s PC business, looked like just the ticket.
Last week, Lenovo fired up the engine of its estimated $30 million investment in the sport that mixes glamour, technology and danger – in equal measure – hoping it would drive awareness of its brand as it fights to climb out from under the shadow of Big Blue.
There are sports sponsorships, and then there are sports sponsorships, and Lenovo is one of the latest to embrace Bernie Ecclestone’s travelling circus, discovering along the way the incredible mechanics of launching a partnership in Formula One.
Ironically, it was a deal first brokered with the help of rival race team Ferrari.
"The first time we got to talk to them was through (computer chip manufacturer) AMD," Garrett says.
"AMD are a partner with Ferrari and when you are knocking around the paddock eight times a year you get to know people and someone there suggested having a chat with Lenovo."
The phone call paid off, with Lenovo already locked into a major sponsorship with the Olympics. The fit with the Williams team, where its computers will become an integral part of the design and running of the cars, was perfect.
Lenovo was a long-game target and Garrett says even now, Williams is talking to potential sponsors for the 2009 season.
"Having said that, the shortest time I’m aware of is 24 hours from start to finish," he says of a newly acquired but unnamed sponsor.
Part of the key to accessing sponsorship and turning around deals, he says, is identifying where within a company the budget exists.
"If it exists as part of the advertising budget you can usually work with a shorter lead time because advertising tends not to be committed until six weeks before it’s required. If it is pure sponsorship, then that is a forward decision that involves people sitting around the board room asking if this is something they want to get involved with. If it is that, then it takes a lot longer."
A sponsor’s fit with Williams is also an important consideration.
"We have got a very clear brand positioning, which we sum up as the racing purists, and the reason we say that is we are the only team on the grid that is not beholden to a large multinational company. We don’t sell cars, we don’t sell caffeinated soft drinks, we don’t sell anything for anybody else. The only reason we exist is to go racing."
The team also exists, it seems, to foster relations between its sponsors.
"Our client list is really blue chip and a lot of the reasons why people like RBS, Accenture, Reuters and Allianz are with us is to do business with each other. I think we have driven half-a-billion US dollars worth of business between our partners since 2002."
For Lenovo marketing boss Deepak Advani [who is based at Lenovo’s U.S. headquarters in Morrisville, N.C.], the fit was driven by technology and demographics.
"Over 60 per cent of the Formula One fans are professionals," Advani says. "Formula One races happen in all of Lenovo’s key markets. Finally, Formula
One is known for world-class engineering. Our research also shows that brands associated with Formula One get a lift not only in awareness but also in brand image, which for our brand is very important."
The task of managing the relationship fell to Lenovo global sponsorship program director Thomas Grimes.
Already up to his ears managing Lenovo’s Olympic sponsorship, Grimes spent his first ever weekend at a Formula One race and seeing first-hand how the investment is running.
In Australia, along with the branding opportunities, the value is in the corporate entertainment. Lenovo clients, and those of other sponsors, including Royal Bank of Scotland, Allianz and team sponsor AT&&T will spend the weekend enjoying fine wines, doing exclusive pit walks and seeing behind the scenes of a working racing team.
"There are a couple of different challenges. The first is it is a global sponsorship but you really need to work down at the local level – you can’t manage it from North Carolina," Grimes says.
Williams, he says, has been crucial to that communication.
"They have been great and they are a partnership in the truest sense, not just slapping a logo on a car – they need to integrate our products into their operation." Drivers are also an important part of the sponsorship equation – although Grimes admits less so for Lenovo.
However, the availability of Alexander Wurz and emerging tyro Nico Rosberg, the youngest driver on the grid and son of a former world champion, is a key facet.
Rosberg says the demands of sponsors can be grueling.
Having arrived in Australia in the wee hours of Monday morning, he spent the first day meeting sponsor commitments with RBS, with Tuesday devoted to Lenovo. "Drivers are the main focus of the sport and in the end they want to make the best use of that," Rosberg says. "The use of drivers attracts media."
While the promotion schedule is grueling in the lead-up to the race, Rosberg says he brings a great deal to the table for sponsors of the team.
"I have an educated point of view. I am a young, next generation kind of person and I think that is definitely a factor."
With 20 sponsors on board, the challenge of managing them is a business division unto itself at Williams, with five account directors managing the needs of sponsors over the course of the season.
From them Advani, based in the US, wants to see a return on the investment.
"We have detailed metrics in place in countries around the world to measure brand awareness, consideration, preference and image – before and after our Formula One activation," Advani says.
"Along with brand building, Formula One also allows us to strengthen relationships with our large customers through the hospitality programs.
"Finally, like we did with the Winter Olympics, we’re exploring partnerships with other sponsors, and this will also generate incremental revenue, thereby enhancing the overall ROI for the sponsorship."
The final word, though, goes to the man in which Lenovo has ultimately placed its trust to promote its billion-dollar brand – the 21-year-old Rosberg. [He finished seventh in Sunday’s race.]
"It’s about being better than the rest. That is satisfying. And doing a good job."