SHELL claims it never stopped being a sponsor in local touring car racing although it has fiddled at the fringes of late. But when DJR Team Penske took the wraps off its 2017 Shell V Power livery at an unveiling outside Melbourne’s Etihad Stadium earlier this week is was clear Shell was back big time.
Shell, which operates in Australia via licensee Viva Energy, has long links with racing, and DJR in particular, and is now back in Supercars full time after a toe-in-the-water title sponsorship of DJR Team Penske at a few marquee events last year.
Several million dollars will be spent backing two DJR Team Penske Falcons in a multi-year deal that represents a significant co-branding exercise between the well-recognised Shell and iconic DJR brands.
DJR Team Penske is a Supercars operation jointly owned by Australian Bathurst legend Dick Johnson and American billionaire auto industry businessman and race team boss Roger Penske.
This will be the team’s third season under the DJR Team Penske banner, and they are widely expected to be a front running squad this season. But the competition is tough and it is hard to win consistently in Supercars.
It is a fiercely competitive market for fuel sales too.
Shell’s move back into full time motorsport sponsorship comes at a time when the competition for local fuel sales, particularly for higher margin premium blends, is becoming more intense.
With the mining boom officially over, and business to business (B-to-B) sales not growing, retail is now more important than it has been, at least in the recent past.
Fuel sales to the general public are forecast to increase in coming years; but only marginally. Growth in profitability is likely to come from convenience store operations and car repairs.
The latter makes the size of an energy company’s service station network very important and is why there has been some significant retail network investments over the past couple of years.
Most recently, BP paid Woolworths $1.8 billion for its 527 Caltex supplied service stations, taking its national market share from 15 to 39 per cent.
The flow-on of this corporate maneuvering to the marketing arena has seen renewed or expanded energy company sponsorship elsewhere in the Supercars competition.
Caltex stepped up to be naming rights sponsor of a single car Triple Eight Race Engineering entry driven by Craig Lowndes last year via their Vortex premium fuels brand. Mobil also feature as more prominent sponsors of two Walkinshaw Racing entries this year.
But the general manager of consumer business for Viva Energy Australia Dan Ridgway told GoAutoNews Premium that increased competition for the retail petrol dollar was the not the prime motivation for the company’s decision to ramp up its Supercars sponsorship.
He said that Shell was not taking a position of “the others are doing this so we have to match it”.
“We don’t look at our investment in a defensive way. We look at it more as what are all the opportunities we can use to grow the brand and the business,” he said.
“Whether that’s AFL, Rugby, non-sporting, sporting – Supercars came out near the top and there’s a number of reasons that Supercars is a really good platform.
“One is the level of engagement of the fans. You only have to go to Clipsal or Bathurst and see these are not people who just flick the TV on just because something’s on.
“To be associated with motorsport obviously has a direct connection with our products as well, as opposed to putting our sponsorship on an AFL ball or something like that.”
Asked if the title sponsor at several events last year indicated that it was a good idea to continue or expand the sponsorship, Mr Ridgway told GoAutoNews Premium:
“It’s just a bit difficult for both the team and the fans when you are in for one round and then you’re out.
“Having that continuity helps with activation.We know we are going to be there all the time. It’s easier for the fans to understand; the team naming rights helps us to leverage the investment.
“It is quite important to us and I think it is important to the team that it is a long-term deal. With something like this you can’t achieve a lot if you are in one year and out the next.
“One of the main benefits is that people still have a very strong association from the Dick Johnson days between Shell and V8 motorsport. That means we are starting from a strong position. But to build on that we think we need a multi-year deal.” Mr Ridgway said.
“Having two cars at all the rounds we see as a strong investment. But that wouldn’t stack up for us just purely on the lubricants and fuels platform, and that is why we have brought in the general Shell branding.”
Mr Ridgway would not confirm specific numbers in regard to the DJRTP sponsorship, which has been reported by Fairfax media to be $4 million over three years. That amount would be in keeping with exposure in Supercars of this level.
But he said Shell had four million customers buying fuel every two weeks “so there is quite a customer base to spread our investment over”.
“What’s really important to us is – and this is where it has worked really well with Penske and DJR – is not just the straight dollar value of the livery on the car, it is the chance to activate that, the chance to leverage it with our customer base.
“So actually it’s more that just money … there is also a chance for a technical partnership as well that Shell has a long tradition in. There are benefits for us outside the straight branding opportunity.”
Activation is a key factor in the success of sponsorship. It’s all about getting people involved and excited in the activity that is being sponsored, and then understanding who the sponsor is and what they offer.
If you thought high level sporting sponsorship sounded expensive, activation activities can cost as much or more again. Some marketing texts quote numbers of two and three to one activation dollar to each sponsorship dollar.
We asked Mr Ridgway for his view on the activation to sponsorship dollar ratio.
“It depends a bit on what you are doing,” he said.
“I wouldn’t say there is a textbook right or wrong, but I guess an important part of this investment for us was not to do the classical corporate mistake and say: OK, I’ve given you all that money but now you are not going to have do any more to leverage it.
“So we do understand that activation is a really important thing so we will put resources into that. Whether or not it’s one dollar of activation spend for two dollars of sponsorship, or one to one, it needs to be a significant proportion.
“We think there are a couple of areas around activation. We have the V Power Racing Club already, and we have through digital platforms the opportunity to get some excitement going about how the team’s going, before and after races and other events.
“We have some really exciting opportunities with the commercial part of our business where we sell B-to-B to a number of big industrial companies. We can have drive days, ‘money can’t buy’ experiences, and I think that’s another trend now in customer engagement.”
GoAutoNews Premium was keen to establish just what the expected outcome of this sponsorship campaign was: “What’s your goal, is this a branding campaign, is it a marketing campaign or is it both,” we asked.
Asked about Shell’s overall objective in the sponsorship, Mr Ridgway said: “We are very fortunate to have a brand which is amongst the most recognised in the world and in particularly in Australia.
“One aspect is about consumers and reinvesting to maintain that awareness. But even moreso, the strong association that we have with another iconic brand like Dick Johnson Racing, is a good example of one plus one makes three.”
Asked how hard it was to get this deal done Mr Ridgway said: “Viva Energy is a privately owned company so we don’t have a lot of corporate processes, or complicated corporate processes like big multi-nationals maybe would. So I would say it was quite a focussed and sharp conversation but not necessarily a very long one.
“For us, in the end, it actually wasn’t that difficult because when we looked at the facts around, as I said, the number of people who are really engaged with motorsport, the opportunity to build on that history and that latent value and association between Dick Johnson and Shell. We saw it as a really great investment opportunity and it didn’t actually take us that long to make the final call.”
By Daniel Cotterill on 9th February 2017 Comment Shell, Sponsorship, V8 Supercars
SHELL claims it never stopped being a sponsor in local touring car racing although it has fiddled at the fringes of late. But when DJR Team Penske took the wraps off its 2017 Shell V Power livery at an unveiling outside Melbourne’s Etihad Stadium earlier this week is was clear Shell was back big time.
Shell, which operates in Australia via licensee Viva Energy, has long links with racing, and DJR in particular, and is now back in Supercars full time after a toe-in-the-water title sponsorship of DJR Team Penske at a few marquee events last year.
Several million dollars will be spent backing two DJR Team Penske Falcons in a multi-year deal that represents a significant co-branding exercise between the well-recognised Shell and iconic DJR brands.
DJR Team Penske is a Supercars operation jointly owned by Australian Bathurst legend Dick Johnson and American billionaire auto industry businessman and race team boss Roger Penske.
This will be the team’s third season under the DJR Team Penske banner, and they are widely expected to be a front running squad this season. But the competition is tough and it is hard to win consistently in Supercars.
It is a fiercely competitive market for fuel sales too.
Shell’s move back into full time motorsport sponsorship comes at a time when the competition for local fuel sales, particularly for higher margin premium blends, is becoming more intense.
With the mining boom officially over, and business to business (B-to-B) sales not growing, retail is now more important than it has been, at least in the recent past.
Fuel sales to the general public are forecast to increase in coming years; but only marginally. Growth in profitability is likely to come from convenience store operations and car repairs.
The latter makes the size of an energy company’s service station network very important and is why there has been some significant retail network investments over the past couple of years.
Most recently, BP paid Woolworths $1.8 billion for its 527 Caltex supplied service stations, taking its national market share from 15 to 39 per cent.
The flow-on of this corporate maneuvering to the marketing arena has seen renewed or expanded energy company sponsorship elsewhere in the Supercars competition.
Caltex stepped up to be naming rights sponsor of a single car Triple Eight Race Engineering entry driven by Craig Lowndes last year via their Vortex premium fuels brand. Mobil also feature as more prominent sponsors of two Walkinshaw Racing entries this year.
But the general manager of consumer business for Viva Energy Australia Dan Ridgway told GoAutoNews Premium that increased competition for the retail petrol dollar was the not the prime motivation for the company’s decision to ramp up its Supercars sponsorship.
He said that Shell was not taking a position of “the others are doing this so we have to match it”.
“We don’t look at our investment in a defensive way. We look at it more as what are all the opportunities we can use to grow the brand and the business,” he said.
“Whether that’s AFL, Rugby, non-sporting, sporting – Supercars came out near the top and there’s a number of reasons that Supercars is a really good platform.
“One is the level of engagement of the fans. You only have to go to Clipsal or Bathurst and see these are not people who just flick the TV on just because something’s on.
“To be associated with motorsport obviously has a direct connection with our products as well, as opposed to putting our sponsorship on an AFL ball or something like that.”
Asked if the title sponsor at several events last year indicated that it was a good idea to continue or expand the sponsorship, Mr Ridgway told GoAutoNews Premium:
“It’s just a bit difficult for both the team and the fans when you are in for one round and then you’re out.
“Having that continuity helps with activation.We know we are going to be there all the time. It’s easier for the fans to understand; the team naming rights helps us to leverage the investment.
“It is quite important to us and I think it is important to the team that it is a long-term deal. With something like this you can’t achieve a lot if you are in one year and out the next.
“One of the main benefits is that people still have a very strong association from the Dick Johnson days between Shell and V8 motorsport. That means we are starting from a strong position. But to build on that we think we need a multi-year deal.” Mr Ridgway said.
“Having two cars at all the rounds we see as a strong investment. But that wouldn’t stack up for us just purely on the lubricants and fuels platform, and that is why we have brought in the general Shell branding.”
Mr Ridgway would not confirm specific numbers in regard to the DJRTP sponsorship, which has been reported by Fairfax media to be $4 million over three years. That amount would be in keeping with exposure in Supercars of this level.
But he said Shell had four million customers buying fuel every two weeks “so there is quite a customer base to spread our investment over”.
“What’s really important to us is – and this is where it has worked really well with Penske and DJR – is not just the straight dollar value of the livery on the car, it is the chance to activate that, the chance to leverage it with our customer base.
“So actually it’s more that just money … there is also a chance for a technical partnership as well that Shell has a long tradition in. There are benefits for us outside the straight branding opportunity.”
Activation is a key factor in the success of sponsorship. It’s all about getting people involved and excited in the activity that is being sponsored, and then understanding who the sponsor is and what they offer.
If you thought high level sporting sponsorship sounded expensive, activation activities can cost as much or more again. Some marketing texts quote numbers of two and three to one activation dollar to each sponsorship dollar.
We asked Mr Ridgway for his view on the activation to sponsorship dollar ratio.
“It depends a bit on what you are doing,” he said.
“I wouldn’t say there is a textbook right or wrong, but I guess an important part of this investment for us was not to do the classical corporate mistake and say: OK, I’ve given you all that money but now you are not going to have do any more to leverage it.
“So we do understand that activation is a really important thing so we will put resources into that. Whether or not it’s one dollar of activation spend for two dollars of sponsorship, or one to one, it needs to be a significant proportion.
“We think there are a couple of areas around activation. We have the V Power Racing Club already, and we have through digital platforms the opportunity to get some excitement going about how the team’s going, before and after races and other events.
“We have some really exciting opportunities with the commercial part of our business where we sell B-to-B to a number of big industrial companies. We can have drive days, ‘money can’t buy’ experiences, and I think that’s another trend now in customer engagement.”
GoAutoNews Premium was keen to establish just what the expected outcome of this sponsorship campaign was: “What’s your goal, is this a branding campaign, is it a marketing campaign or is it both,” we asked.
Asked about Shell’s overall objective in the sponsorship, Mr Ridgway said: “We are very fortunate to have a brand which is amongst the most recognised in the world and in particularly in Australia.
“One aspect is about consumers and reinvesting to maintain that awareness. But even moreso, the strong association that we have with another iconic brand like Dick Johnson Racing, is a good example of one plus one makes three.”
Asked how hard it was to get this deal done Mr Ridgway said: “Viva Energy is a privately owned company so we don’t have a lot of corporate processes, or complicated corporate processes like big multi-nationals maybe would. So I would say it was quite a focussed and sharp conversation but not necessarily a very long one.
“For us, in the end, it actually wasn’t that difficult because when we looked at the facts around, as I said, the number of people who are really engaged with motorsport, the opportunity to build on that history and that latent value and association between Dick Johnson and Shell. We saw it as a really great investment opportunity and it didn’t actually take us that long to make the final call.”
Comment by Daniel Cotterill
Road to Recovery Podcast Series
Accessories risk in NVES
AAAA CEO highlights unintended consequences of accessories in NVES policy
Expert: ‘You cannot legislate customer choice’
Senior US motor trade representative calls for more natural progression on the path to BEVs
Feds CO2 haste unprecedented: expert
Given the gravity of the proposed changes, car importers were denied a reasonable lead time