Hilton's Ian Carter on the value of F1 sponsorship 16 Jul 2009
Ahead of the 2005 Belgian Grand Prix, McLaren and the Hilton Hotels Corporation announced a long-term partnership and almost four years on the relationship is as strong as ever. While Hilton may not be one of the biggest F1 sponsors, when it comes to exposure and value for money their investment leads the field. Speaking exclusively to Formula1.com, Ian Carter, Hiltons President of Global Operations, explains why he is convinced Formula One racing is the perfect platform to reach out to partners and customers around the world
Q: Ian, your sponsorship deal with McLaren is approaching its fifth year. You are obviously satisfied with the partnership, but what tempted Hilton into Formula One racing in the first place?
Ian Carter: We assessed a number of sports, not just Formula One. The main objectives we wanted to achieve were not to do with consumers, but in developing business-to-business relationships in areas like the Middle East and the Far East, where were launching a number of brands and a number of hotels. So once you start thinking about annual events that take place on a regular basis, youre actually limited in what sports you can be involved with. The World Cup is every four years, and so are the Olympics. And although we are involved with the Olympics, in particular with the US Olympic team, we rapidly became convinced that Formula One was the right place for us to be. There are a lot of races spread throughout the year and also spread throughout the world, so it seemed to us a perfect fit. And then of course there are all the companies that are involved in Formula One. They are biggest names in the world, which has huge potential in terms of possible business-to-business partners.
Q: Which other sports did you consider before deciding on Formula One sponsorship?
IC: Well, we already sponsor the US Olympic team. We then looked at golf, we looked at tennis, we looked at soccer and we looked at the World Cup, but none gave us the global reach that Formula One gives us on such a regular basis - 18 or 19 Grands Prix a year, spread throughout the calendar and all in major countries. For us, it was pretty straight forward once wed made our assessment.
Q: Have your objectives changed over the years?
IC: They probably havent changed much, the results are probably just better than we had expected. We set our objectives very high but the results have been really great. The relationships that weve developed with other McLaren sponsors and other companies in the pit lane, who sponsor other teams, have been fabulous. The press coverage we have been able to get has been great too, as has the development of HiltonRacing.com, our own racing website for loyal customers. In addition we have enjoyed a lot of consumer marketing benefits that we probably didnt anticipate.
Q: Rumour has it that you have enjoyed revenues three times the cost of your McLaren deal. Are the rumours close to the reality?
IC: Im sure you will understand that I wont disclose any numbers, but what I can tell you is that we are very happy with the return on our investment. Internally, we look at all our investments in terms of marketing spend and Formula One far exceeds what we had planned in terms of return and has done so consistently. Yes, we have a great return on our investment and we are very pleased with that.
Q: Aside from boosting business, what else has the sport done for Hilton?
IC: In areas where we are growing, like Singapore, Malaysia and China, it has given the brand enhanced exposure. It has given us another reason to speak to potential customers about Hilton. The association with Formula One, particularly in places like China where Formula One is hugely popular, means weve been given another opportunity to promote the brand.
Q: How do you publicise your Formula One engagement around the world?
IC: At a number of races throughout the year, we host either big business partners, or selective customers, and entertain them. That is part of our Formula One programme and the feedback we get is fantastic. There is probably nothing like Formula One, in terms of entertaining guests for longer than the two hours that youd get with, for example, a soccer match. And more importantly we have found with a lot of people that we invite to races, especially on a senior level, they will come with their partners. They spend a whole weekend with us, which enables us to develop much deeper relationships. That again is very unique about Formula One.
Q: Although youre one of the smaller team sponsors, last year Hilton ranked as the seventh most exposed Formula One sponsor
IC: I believe it is true. And it does not surprise me. We have a very good team that works on the programme. I think that thanks to regular evaluations of what we are doing, we punch way above our weight. It is like every marketing programme that you run - you are only as good as the focus you put on it. You get out of it what you put into it.
Q: In the current economic climate, some sponsors might find it hard to justify their commitments. What is the current situation at Hilton?
IC: We are very definite. We focus on the financial returns. We are not just doing it for the fun of it; we do it for a return on our investment. And our Formula One commitment stacks up as a great return on investment, from a marketing perspective and from a purely business perspective. We measure return in terms of value that we create, both directly and indirectly related to Formula One, so when any of our partners in the programme book any conferences, it is largely due to the relationships that weve developed through Formula One. The conference might not even be at a Formula One event. It could be the launch of a product somewhere else during the year, and they choose to stay with Hilton because of the relationship weve developed in the paddock.
Q: What advice would you give to a company looking into Formula One sponsorship?
IC: Personally, I would say that the most important thing is to understand what you want from the programme before you go into it. Dont just do it because you think its going to be fun. Invariably it will be fun, but you should look at exactly what you want. What are you trying to achieve? Is it consumer marketing? Is it brand awareness? Is it a hope to form business-to-business relationships? Decide that before you go in, and then make a very clinical assessment of which team would deliver the best results for you. There are ten teams to choose from. We are totally satisfied with our Formula One commitments and we are also very satisfied with our relationship with Vodafone McLaren Mercedes, because they are very commercially orientated and understand what our objectives are. I hope our partnership is long lasting.