Sponsors’ data breaks down in an F1 pit-stop

A review of Formula One audience data has seen viewer numbers slashed, leaving many sponsors doubting the value of their deals. But with no industry standard, chaos reigns, says Daniel Thomas

There are lies, damned lies and statistics. Now you can add to that sport audience data – perhaps the most untrustworthy of the lot.

Last week, Formula One Management (FOM) halved the average number of people that it says have been watching F1 around the world. Global audiences have commonly been quoted at up to 300 million over the past few years, but FOM has revealed that average viewing figures for 2002 and 2003 were in fact 127 million and 162 million respectively. These figures are according to calculations made under new methodology introduced last year, which has been applied retrospectively (MW last week).

FOM defends the new sets of viewing figures claiming they reflect a change to what constitutes viewing, given that news broadcasts have been removed from the definition. But, says Ben Pincus, chief executive of sports agency The Works, sponsors will only focus on the millions of people being slashed from the audience.

“F1 is so dependent on money from sponsorship and television broadcasting, it is worrying that such data can be so widely inaccurate,” he adds.

A spokesman for HSBC admits that its &£15m-a-year sponsorship of Jaguar could be affected. Like most F1 sponsors, he says FOM figures were part of sponsorship negotiations. He says: “From a sponsor’s perspective, viewing figures are crucial. We have asked our media agencies to evaluate the FOM figures. The reason we pay what we do is because of its reach. If this changes, then we have to look at our deal.”

Tim Crow, director of agency Karen Earl, agrees the audience rethink will be a shock to many sponsors. “I heard a chief executive of a sponsor talking about having 350 million viewers just weeks ago. At best, this merely reinforces a widely held belief that people talk up data to sell or to justify sponsorships.”

Sauber Petronas head of marketing Sven Zehnder says the F1 team used the old FOM figures to sign new sponsors for 2004, such as Sokhna Port. He adds that “any inflating was perhaps due to the fact that F1 is competing with sports such as football.”

Indeed, all global events are plagued with similar problems in trying to establish credible viewing figures. Last year, Karen Earl and Sports Marketing Surveys (SMS) came under fire for claiming that the Volvo Ocean Race – a client of the agency – was watched by almost as many people as F1.

Karen Earl now admits it made an error making the comparisons but stands by its assertion that 800 million people watched the race last year, making yachting fans of almost a sixth of the world’s population. It defines those who watched the race as the combined total of viewers for live, delayed and highlights programming.

The Australian Rugby Union’s boast of 1 billion viewers for the opening game of the 2003 Rugby World Cup is in contrast to Initiative Media’s estimates of a figure nearer 6 million. FIFA, meanwhile, estimates that 1.5 billion people watched the 2002 World Cup football final, while Initiative claims the real figure is nearer 217 million. The difference in figures may be down the fact that they use different data analysis techniques.

FOM senior statistics manager Jeremy Martin admits the company knew that changing its criteria would be controversial in a market where all sports have a spin on figures. But he says a change was necessary to improve accuracy as the previous figures made assumptions that were wide of the mark.

“We have gone back to square one since 2002 to make data more accurate and provide greater clarity. We have tried to avoid making the blanket assumptions from before,” says Martin.

The FOM figures now only include dedicated live and delayed broadcasts, not news or programming under three minutes. But the new methodology still differs from those applied to other sports, which again vary in their approach to data. There is no single industry standard emerging. Experts also claim that under the new methodology, FOM’s figures can be skewed by repeated showings of delayed highlights packages.

Given the confusion surrounding sports data figures, sponsors could be forgiven for increasingly relying on their own data, which is normally provided by their media agencies. Orange director for sponsorship Niamh Byrne agrees the company is not unusual in relying on data from its global media agencies, Media Planning Group and Initiative.

For instance, Initiative says an average of 39 million viewers watched each F1 race globally last year – a far cry from the 300 million used by the F1 industry and still some distance from the 162 million under the new methodology.

And there are already signs that media agencies are restoring some realism to the market. McLaren was blindsided during recent renewal negotiations with Siemens after the telecoms company produced its own, more accurate data to justify a lower price. A deal for about &£5m was eventually settled on: half the previous &£10m agreement.

McLaren is now said to be reviewing its data, which is provided by SMS. Other F1 teams are already wise to sourcing data. Jim Wright, head of marketing at BMW Williams, uses a range of sources, including SMS, Initiative and FOM.

“With all of them,” Wright says, “we can build up an accurate picture of viewing figures. Anyone who relies on just one set of data would not find the true story.”

Indeed, says Mark Cornish, managing director for data provider TNS Sports, media agencies are no more “right” than FOM. Agencies simply look at the same raw data from the TV broadcasters in different ways.

Last year’s Chinese Grand Prix is one example of how figures can be interpreted differently. Initiative data suggests each Grand Prix had an average viewing audience of 620,000 in China, while TNS Sport put the figure at closer to 39 million.

Initiative Media Futures managing director Sue Moseley puts the missing millions down to the difference in evaluating “reach” (the total number of people who have seen at least one minute of the race) and “ratings” (the average number of people who have been watching the race). The Initiative “ratings” analysis, she adds, is more realistic.

Connexus managing director Alastair Macdonald says there are endless variables that can be changed to find different figures from basic TV ratings data. “No one doubts that F1 is one of the largest global sports events but there needs to be accurate and universally accepted evidence to show how and why. Only then will the sport be able to attract cautious sponsors from the packaged goods world,” he says.

Unsurprisingly, there is already conflicting data after just one race this season, with FOM saying UK ratings grew for the Australian Grand Prix and Initiative saying average ratings shrank by 1.3 per cent to 3.1 per cent. The good news is that both agree viewing in other major European countries rose.

But until one industry measurement standard is adopted there will be more disparities of this nature. In the meantime, sponsors will be advised to trust no one and do their own homework.

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