Pirelli is delighted with its return on investment in F1
Pirelli only returned to F1 at the start of the season but already believes that its return on investment is very good, even if it's difficult to precisely quantify the commercial impact of its presence at the pinnacle of motorsports.
Thus, Paul Hembery, the director of the automotive sports division of the Italian manufacturer, stated to The Business Times: It is difficult to link F1 to sales, but revenue is expanding significantly. We cannot do it mathematically and precisely, but we know that we have more demand for our products and our distributors are very happy.
Pirelli has already conducted an initial study to measure the impact on its brand image but does not want to say too much so as not to give indications and ideas to its competitors: «We conducted an analysis of brand visibility and advertising value but it is entirely confidential because we do not want our competitors to know about it. Whatever value you assign to the sport, it has exceeded our initial expectations. This is obviously supported by television audiences.»
The return on investment is all the better because, for the first time, the teams must pay a financial contribution to receive their tires during the 19 races of the season and during private testing. Although the figure has never been officially disclosed, various sources within the paddock suggest that this effort amounts to one million dollars per year per team: « Teams contribute to overhead costs. It is neutral for our profit and loss account because we have allocated other investments towards F1. »
That is why Paul Hembery believes that the brand derives a lot of value from its investment than its other major communication tool, namely its famous calendar. Yet, the calendar has an impressive ratio of 1 to 60 (meaning every dollar invested in this calendar generates 60 dollars of media impact and advertising equivalent): « It’s probably better than the calendar. It’s a tool that has a lot of value. »
This certainly contributes to its growth since, even though the Milanese company is currently only the fifth largest manufacturer in the world, it controls 15% of the premium segment and is experiencing the strongest growth among all tire manufacturers.
With the participation of RacingBusiness.fr
