‘Meeting of minds’: Mastercard on ‘advancing the business’ through Formula 1
Looking to move on from a “1990s way of thinking” about sponsorships, Mastercard wants to take its tie-up with McLaren Racing to a “different level”.
Mastercard is looking to take its one-year-old McLaren F1 partnership to a “different level” in a bid to develop a “sustainable competitive advantage” in the financial services sector.
At an event in Amsterdam last week (27 August), McLaren Racing announced Mastercard as the official naming partner of its Formula 1 Team, meaning that from next year the team will be known as the McLaren Mastercard Formula 1 Team.
As part of this, Mastercard will debut ‘Team Priceless’, a global initiative offering McLaren fans events and experiences, tying in with the brand’s wider focus on experiential marketing. On the title sponsorship, Mastercard CMO Raja Rajamannar explains the intention is to “elevate” experiences to “a different level”.
At Cannes Lions, Rajamannar said he was “shocked” at how slow the marketing industry has been to shift from traditional advertising to experiential marketing, adding that 70% of Mastercard’s advertising budget has “pivoted” away from traditional methods.
We are trying to cross-pollinate ideas and vertical concepts from one sport, and then trying to bring the best of everything to every one of them.
Raja Rajamannar, Mastercard
The title sponsorship for McLaren felt like a “natural” step. Rajamannar says Mastercard will turn away from a “1990s way of thinking” of how title sponsorships should be handled.
“It’s not the size of the brand or ‘in your face’ branding on the car, but it is about experiences. Since I joined Mastercard, I’ve moved away a lot from the traditional templates and we implemented something called ‘quantum marketing’ principles,” he explains.
Lessons from Mastercard’s tie-ups with other sports, including the Australian Open, UEFA Champions League and PGA, have been applied to the McLaren partnership over the past year.
For example, with the UEFA Champions League the business focused on “brand impact” rather than brand visibility and applied this approach to McLaren. Mastercard is also trialling event-branded pre-paid McLaren cards following the success of a similar product at the Australian Open.
“We are trying to cross-pollinate ideas and vertical concepts from one sport, and then trying to bring the best of everything to every one of them,” says Rajamannar.
‘Talked the same language’
The McLaren partnership came to fruition when, two years ago, Mastercard was looking to “optimise” its portfolio of sponsorships to “make it very powerful” after a 20-year break from F1 sponsorship.
“What is compelling as opposed to just being ‘cool’ is the growth of F1 and the F1 fans, and their audiences for the various races. It was growing like there is no tomorrow, particularly after the launch of [Netflix’s] Drive to Survive,” says Rajamannar.
The fact 40% of all F1 fans are women was another contributing factor, the CMO adds, explaining “vast percentages” of its cardholders who make purchases for their homes are women.
McLaren specifically appealed as a “passionate team”, performing in the top five on the grid. After having met with all the top five teams, McLaren’s knowledge of marketing impressed Rajamannar. That is despite McLaren only scoring fourth out of all the teams according to momentum analysis.
“When I met particularly with McLaren, I was super impressed that these guys knew marketing extremely well. They always put fans front and centre. It’s less about McLaren by itself, but it’s about McLaren fans,” says Rajamannar.
McLaren Racing’s CEO Zak Brown used to run his own marketing agency, making it a “meeting of minds”, the Mastercard CMO explains, as they “talked the same language”.
Over the past year, the teams have focused on co-creating experiences for fans, including a campaign to find the next McLaren Junior Engineer.
Cardholders have been able to buy experiences at Grand Prix weekends, such as driver meet and greets with McLaren’s Oscar Piastri and Lando Norris, fitting into Mastercard’s wider ‘Priceless’ strategy.
According to Brown, digital events will be pushed as part of the Team Priceless rollout to reach fans who can’t make it to race weekends.
You need to recognise the other sports partners that they have; there’ll be some learnings for McLaren and Formula 1 in that.
Zak Brown, McLaren Racing
On why the team picked Mastercard as its title sponsor, the McLaren Racing CEO saw Mastercard as a brand that could “add value off the track”, given its success in sports partnerships and global reach.
“For us, it was all about finding the right partner. We’ve had plenty of opportunities, as you can imagine, over the last nine years, but this one was a no brainer for us,” says Brown.
Furthermore, “the amount of fans” Mastercard has appealed to McLaren.
“We have hundreds of millions of fans, but we can now get 2.8 billion potential fans exposed to McLaren,” says Brown.
He explains the F1 team is “constantly learning” through the Mastercard partnership and will measure the success of the partnership through the diversification of McLaren’s fanbase.
“You need to recognise the other sports partners that they have; there’ll be some learnings for McLaren and Formula 1 in that. So, we’re quite excited about what we’re going to do together and what we’re going to explore, and learn together,” adds Brown.
‘Sustainable competitive advantage’
Sports partnerships are integral to Mastercard’s marketing strategy as a financial services provider. As Rajamannar explains sports marketing has always been the “biggest component” of the company’s marketing budget.
“Sports is an area that unifies everyone and particularly if you look at global sports, those are things which appeal so instantaneously and create a positive brand aura,” he adds.
Measuring the effectiveness of its sports sponsorships includes looking at ROI, as well as brand affection, how the partnership is “advancing the business”, for example through new deals, and whether the brand has a “sustainable competitive advantage”.
“When we talk of this experiential marketing, that gives us a huge amount of advantage and that [competitive advantage] it’s very hard for our competitors to replicate,” says Rajamannar.
Sports isn’t the only area where Mastercard is investing in partnerships. Anything featuring “live action” is performing well for the business, including long-standing relationships with the Brit Awards and Live Nation, he explains.
“With so many thousands of ads coming at you, it’s very difficult to stand out of the clutter, grab the attention of the consumer and influence their perception, and choice. That is an opportunity, therefore, to find alternate ways of doing it,” says Rajamannar.
Going forward, Mastercard’s intention is to focus on a “cluster of passions” as it looks to expand its brand strategy and partnerships programme.
