Formula E is positioning itself correctly to ensure the series and its teams are able to attract new commercial partners.
That is the opinion of one of the championship’s most successful business managers, Keith Smout, who has held positions with several teams since its 2014-15 debut.
Smout believes that a new ‘ecosystem’ of existing and future partners in electric racing will formulate a fresh philosophy of doing business in years to come.
“In Formula E you are talking about the first truly environmentally friendly sport and it has a certain attraction to businesses,” Smout tells e-racing365.
“Formula E is the first one that has come out and said ‘we are here to be socially and environmentally active, we are going to look at the new technologies of the future.’
“I always look at it as – and this is how I talk to sponsors and potential sponsors – that we are going to build this whole thing together.”
Smout has brought several new partners to teams including Aguri, Dragon and Techeetah and thinks that the green message in Formula E is a powerful one for decision-makers looking at new strategic activations for their brands.
“We are going to create an ecosystem of responsible racing,” he explains.
“This not only includes the cars themselves being electric but also uses various power sources to eventually power things in the garage, whether it be solar or wind.
“They are using biofuels for generators, for example. This is all cool and attractive messaging for partners, and this can be translated to the big picture.
“It goes from the race track to a village, town or city, because honestly for a race weekend in Formula E we have created our little world that is progressive, competitive and also fun and cool.
“I think that is why people look at it differently and are investing.”
Forward-thinking brands are coming to Formula E to become part of what Smout has called an ‘ecosystem’ of partners, and be associated with a series that bucks the traditional motorsport image of oily engines and ear-splitting noise.
“People want to align themselves with socially responsible activities,” he says.
“I mean it’s pure entertainment, I get that, but Formula E combines entertainment with environmental and social responsibility, so when you are talking to a company and they are looking at what they are going to spend their dollars on… well why wouldn’t they?
“It’s not only a platform which is good to be involved with and related to, but it’s one which businesses want to be aligned with and I think this alignment is the most important thing.
“However, becoming a partner in this championship also gives a company business-to-business opportunities, because when a sport has a lot of manufacturers, the partner chain folds down and that pyramid is massive, so you are getting companies approaching that you would never actually consider.”
With that in mind, Formula E outfits are now trying to have sensible values and keep sponsor parity among the other teams.
“I think we need to make sure that everybody on the grid recognizes the value of what we have and keeps to a rate card, within reason,” suggests Smout.
“What you do not want is somebody coming along and selling low-ball offers because maybe they don’t need as big a budget as a smaller team.
“There are teams here that need more sponsorship than others because manufacturers put in big budgets. Regardless of that, we want manufacturers to be creating the same value equation.”
This last point is a fundamental one for Smout who believes that creating worthwhile events must balance the brand image with good economic sense.
“It is important for the series to have a successful event because we want to be here ten years from now,” he says.
“If they don’t have success and can’t earn money from hosting a Formula E race then they are not going to be here.
“So, I think that is the best thing about city races in major capitals, which will make money eventually. It is simple in my opinion: if everyone makes money then everyone is going to be happy, right?”