Livio Suppo Interview: "We Need To Be More Innovative About Sponsorship"

MotoGP's huge popular success cannot disguise its Achilles' heel, the ability to raise sponsorship. With just 17 bikes on the grid, many of the existing teams straining to keep ticking over and the Grand Prix Commission continuously looking for ways to cut costs, money remains a problem for the sport. One of the key figures inside MotoGP who has been most successful at raising sponsorship is Livio Suppo, formerly of Marlboro Ducati, now of HRC. Suppo was brought in to Honda to find ways of raising more sponsorship, and repeating the trick that the Italian pulled off at Ducati, securing enough funds to cover the factory's racing expenses.

Here at MotoMatters.com, we have made no secret of our fascination with the process of funding MotoGP, and especially of trying to find out why that should be so difficult. So we grabbed Livio Suppo at Qatar,  to ask his opinion on the challenges facing him and MotoGP as a sport in trying to raise money. He talked about the opportunities he sees for business-to-business sponsorship, the need for more nationalities in MotoGP, and how hard it is to compete with TV advertising. It was a fascinating half hour:


MotoMatters.com: I wanted to talk to you about the process of raising money and why it is so difficult for MotoGP. People say in the paddock that you were responsible for just about every sticker on the bike at Ducati.

Livio Suppo: I started at Ducati as a marketing guy, for Ducati Corse, so, we loved the structure of Ducati Corse in marketing, and everything was related to all the people who work in that department. Anyway, let's say that first of all, it's not just a difficult time for MotoGP, it's a difficult time for every sport. It's not easy to get sponsorship money for anyone. If you see also Formula One at the moment, there's a lot of cars with no stickers. So of course, the economic situation, as we all know, it's not finished, the problem. And therefore everybody involved in these kinds of activities need to be more pro-active, and think about something innovative, I guess.

So I personally believe that the future of sponsorship is a lot related to business-to-business activities, because of course, when the economy is not so good, it's easier to build upon sponsorship a marketing platform but also a business platform.

MM: By that you mean enabling businesses to do business within the paddock?

LS: Within the company, if you're a company like Honda is, because there are so many things that Honda purchases anyway, and so of course this is one potential. Also create opportunity for business between companies.

Look at the Pramac team, I think is a good example. Mr Campinoti is very clever businessman, and he's here, he's spending money, but he is surely here doing business: here [Qatar], Formula One at Singapore, stuff like that [Pramac produces generators, which are used to power the lights at Qatar and in Singapore - MM]. So we need to understand that this must be the platform of a business.

It's not easy, because it's a different approach. Of course, it was much easier before when there were a lot of tobacco companies or Spanish companies who want to sponsor teams.

MM: Do you think that tobacco sponsorship ruined the market, by making them complacent and lazy?

LS: I personally believe that... I think it's proven that the advertising of tobacco doesn't increase the number of people who smoke, so … I think Phillip Morris is proving that you can still do a good job without showing the brand. And I think it's just a question of seeing whether sometime in the future some other tobacco companies think that it makes sense to rejoin the sponsorship. At the moment, it seems that nobody wants to do it.

MM: You talked about business-to-business. How much of sponsorship is about relationships? How much is about relationships between you and people in other companies, about people in manufacturers and other companies?

LS: You know, let me give you another example outside of this world: If you look at the America's Cup, behind every single boat there is a super rich man with a passion for sailing. So this is one of the ways you find sponsors: People with passion. And in Ducati there were a lot of examples of people like that. The former CEO of Telecom Italia had a lot of passion for cars and motorcycles. And that's normal, you know? Life is driven a lot by passion. The Benetton family is involved in basketball because Mr Gilberto Benetton used to be a basketball player when he was young. You know, this is something you have to find, but sure, to have an international network is interesting.

It's very useful also to try to work more and more with communications agencies, with advertising agencies. The normal advertising agencies, it's easy for them to sell the normal advertising, the classic advertising on TV, because there's so much more information they can collect and provide to clients. You know, you can do a campaign, and then you can prove how many people watched, and so on, this is very useful for that.

For sponsorship, it's much more difficult to provide numbers that have credibility. We do some things, we can provide sponsors some numbers that say their sponsorship value is this, but of course, there's much more assumptions. And because there's not so much tradition with this kind of thing, it's more difficult to have credibility. And then let's say that you have a mass product market, you must do TV. You must. You cannot avoid it. With sponsorship, you can do it or not, it's not crucial.

So the difficult part of our job is trying to find companies that really believe in sponsorship, but the sponsorship being just one tool in the marketing plan, in which you want to use the plus of MotoGP, the youth, speed, technology, stuff like that, mixed with their need. Of course, it needs more talk. To follow a sponsorship, a company needs people that understand about sponsorship, follow it with passion, come to the race, organize the VIPs, all those things. TV advertising is much easier! [Laughs] You do a commercial, probably in a nice place, with a famous actor, beautiful to go there and meet George Clooney, do the commercial and then see the results.

But of course, it's the future, sponsorship, especially in motorsport for many many years has been with a lot of tobacco companies. But this disappeared, and now we have to reinvent it. So it's a process, not just for us, but for everyone of course.

MM: It's interesting, I spoke to Lucio Cecchinello about the way he approaches doing single event sponsors, because it's much easier to get a couple of hundred thousand out of a sponsor than a couple of million...

LS: Yes, I did that when I was in Benetton back in 1997! In 1997, I painted the bike like the Benetton Formula One car, and then we changed the name sponsor every Grand Prix. And when I find some new, outside company, I put on the logo of the outside company, and if I didn't find an outside company, I use the brand of Benetton sport systems. So if you see on the internet a picture of Ukawa in 1997, in some races, the first race in Indonesia was Mild Seven, that was the tobacco company sponsoring, and then we had Rollerblade, Nordica, Pick 'n' Pack, that was a kind of office supplies. With the bike always the same color, in the famous Benetton colors.

MM: So in a market like this, why don't more teams take the same approach?

LS: Because it's not easy! It's an extra job, and if you look around this paddock, there's not so many teams with a big structure of marketing. They're usually are much more focused on technical things. I think, I heard that McLaren has many, many people in the marketing department. In this world, there's no tradition of that.

MM: It's a chicken and egg situation, where McLaren gets lots of income because they have lots of marketing people, but because they have the income, they can afford to pay the marketing people to go out and get the income...

LS: The problem is, it's a time in which we need to change a little bit the approach. It was not so many years ago that a satellite team was potentially a very good business for the owner, with sponsors like Camel, Fortuna, Telefonica available for satellite teams, with all the factory teams with their own big sponsors. Unfortunately at the moment for several reasons it's no longer like that. If you look what happened in Spain with Formula One. A few years ago in Spain, Formula One didn't exist, then all of a sudden you have Fernando Alonso and it is very big. So probably, Santander money would have been here instead of there. Or Telefonica, instead of doing some advertising in Formula One, not in the teams but in the background, maybe they would be here.

So on this side, we altogether should work with Dorna, because Dorna is trying to do something, and they're doing a good job, for example with the Rookies Cup, or bringing some young guy from the UK racing in Spain. So they're doing a good job, but they cannot do it alone. So the manufacturers should help Dorna more, and try to have a more international effort.

MM: So the whole sponsorship thing should be more of a team effort?

LS: We should work altogether, the Federation, Dorna, the manufacturers and the teams, to have more riders from more different countries.

MM: So it's important not to have say, five or six Italians and five or six Spaniards in the premier class?

LS: We have five Italians, five Spaniards, which means ten out of seventeen from two countries. As you know usually, a sport grows in a country depending mainly on the local hero. A perfect example in Italy was Alberto Tomba in skiing. Or maybe before Panatta with tennis. Tennis now in Italy is nothing. Now there's a young Italian guy growing in golf, and already you see that in the [Italian daily newspaper] Corriere della Serra they speak about golf. Before there was nothing. Or you need a super international star like Valentino or Tiger Woods. These are above nationality, Tiger Woods is famous everywhere. Because this was the first time there was a young, black man playing very strong, then he rises above his country. And this is something that you cannot do, you cannot wait here and see if there's another Valentino coming from somewhere.

MM: You can't create people like that.

LS: No, so you need to at least create local heroes. Last year, Talmacsi was racing in MotoGP, the results were not good at all, but still in Hungary he was very, very famous. Because he was the first Hungarian to race in the top class of motorcycles. So I think in the future we should consider more and more trying to keep this class - if you ask me how many riders I'd like to see in MotoGP, I wouldn't like to see 30, I think 20-22 is the maximum, because you must keep the exclusivity. It must be a kind of exclusive club, where if you are there, you are very lucky. It doesn't matter if you win, you are there. But sure, we need to increase the number of nations.

MM: You said in sailing that behind all the big boats there are rich CEOs with a passion for the sport...

LS: Sailing is a typical rich man's hobby, this is something we cannot think about here. It happens also in Formula One, historically. The Wirth team, you remember, now Virgin Racing? And in this world, a lot less. Motorcycles are usually for ….

MM: You don't go to a business meeting on a motorcycle?

LS: Yes. For example, this area of the world is potentially very interesting for Formula One, for sponsorship of Formula One. For us, it's different. If you are one of these super-rich guys, you want to buy a Ferrari, you want to buy a super exclusive Mercedes, it's difficult to imagine you want to buy a Honda or a Ducati.

MM: Or if you do want to buy a Honda, it's only ten, fifteen thousand euros, it's not even small change to these rich guys...

LS: You don't go with that to the pub to show it off down there, you know? So this is something that closes some doors, but we need to sell up other things, and again, we need to work on it.

MM: You also said that the strength of TV advertising is that it's measurable, what do you think of the internet? The power of the internet for advertisers is that you can see exactly who has hit a page, who has seen what, who has seen what images, where they were...

LS: I'm not an expert, but my opinion is that at the moment, internet offers so many different things that the number of every single thing is nothing. Of course, if you look at the numbers for advertising on the internet, it's growing very fast. Also because at the moment, it's still very cheap. So, sure, it's the future, but I think in the next ten or twenty years, the internet will change a lot.

It's like TV, also TV has changed. If you think when we were young, there were only a few channels. Now, there are more, more, more. I think we are arriving at the point where it is impossible to have so many channels, because people cannot spend the whole day in front of the TV. And at the end of the day, if this is the cake, and you split it and split it and split it, at the end of the day, it's not enough for anybody.

MM: You've got six billion people and twenty four hours, and that's it...

LS: With millions and millions of different channels! So at the end of the day, you can find a super extra targeted group of people, that love the TV about, say, fishing. But you cannot expect this TV will become big. So maybe the the future for this sort of thing is to go more and more specialized with cheap advertising. So the same package you can split better, instead of big like this, you can pick off tiny pieces. It means a little business can grow up. For the big businesses it was easier when there were not so many possibilities.

For MotoGP, again, it's a challenge at the moment, and sure the economic situation doesn't help at all. But this is a challenge to force all of us to be more creative and again, with the business-to-business, especially with a company like Honda, which is so big, that we have a huge potential.

MM: It must be very different for you. Ducati was small and niche, very focused, Honda is different.

LS: In Ducati, you sell the Made In Italy, the Italian exclusivity, the brand. With the Japanese company, you cannot do the same. It's a different product to sell. You're selling the biggest company in the world, the most winning team -don't forget, this team [the Repsol Honda team] is the most winning team in the championship - and technology. And again, step-by-step, hopefully we can also create business opportunities. Of course, never before was there this approach in Honda, so I cannot go in and say "Bam! We're changing everything." But I'm pretty sure in the future we must work on this, all of us. I don't think Petronas stickers are there on the Yamaha because they like the space. I'm pretty sure there's some business behind this. That's normal.

MM: Are you also seeing more interest from the Far East? We've got the Indonesian stickers on Valentino Rossi and Jorge Lorenzo, there's Ratthapark Wilairot in Moto2...

LS: There are two areas of the world that at the moment are growing better than Europe, American and Japan, which are South America and countries like India, Indonesia, and places like that. So sure, we need to investigate these kind of countries, because they have a better economic situation. And they have huge numbers of fans.

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Comments

...and only half tongue-in-cheek. Perhaps if some of the factory (and some satellite) teams made more of an effort to work with grassroots media in North America instead of rebuffing them that our large market sponsors might be more amenable to joining the circus. Even us "little guys" (and not so little) have some deeply rooted contacts in industries well outside of the normal sponsors seen in the paddock today.

ahem.

-jim

http://www.MotoGPod.com
http://www.RideOnTwo.com/forum

Nice article.

I understand that raising revenues is important in any business, but niche is a terrible way to go. There are two major problems with niche. First, a niche sport by definition narrows the network of sponsors which is the opposite of Suppo's stated purpose. Second, a high revenue niche sport makes the MSMA, Dorna, and IRTA all accountable to the people writing the checks not to the sport itself.

MotoGP has something that WSBK doesn't have, PEOPLE CAN ACTUALLY GET IN! A rich person with passion can build his own MotoGP bike and make money in the racing industry, he doesn't have to dump tens or hundreds of millions into a sportbike manufacturing company and then build 3,000 units. Why in God's name would you throw these passionate people out by allowing the MSMA to build a fence around a niche sport.

All they need to do is make the sport more accessible and reduce the cost of the equipment. Right now, a man with "passion" for motorcycling could show up with $10M-$20M and get nothing that resembles his own MotoGP team. Just look at Cycsz or the FB Corse team. A rich millionaire like Branson or Jordan or major brand companies like Red Bull or anyone else could show up and get NOTHING! b/c the sport is a tiny club with technical regulations that are designed to keep people away.

Look at how Moto2 has expanded the network of people. Nearly 20 chassis manufacturers or some such thing. Riders from all over the world. Lots of suspension and brakes companies. It has extremely low barriers to entry, and it's affordable.

I'm not suggesting to spec the engines and cut costs to less than 1M euros per team, but if you want people with passion you have to give them something to be passionate about. "Sorry, this is an exclusive club" doesn't bring out passion.