Jun 11 2014, 8:42am CDT | by Forbes
Hong Kong-based auto racing agency Rush Sports Marketing has been appointed to secure sponsorship for upcoming tours by the Rolling Stones and Elton John.
Rush was launched in September 2010 by its chief executive Tom Potter who was previously responsible for commercial alliances at the Williams Formula One team. It has quickly built up a valuable niche thanks to its specialism in the Asian market which is one of the biggest growth regions in F1.
Just ten years ago only 12.5% of F1 races were in Asia compared to 42.1% last year. Rush has more experience in the Asian market than any other sponsorship agency in F1 and Mr Potter has used it to his advantage. He revealed to Forbes that the company has recently hit a landmark in the amount of sponsorship it has secured for clients.
“Rush has so far brokered over $50 million (total contracted value) in sponsorship and licensing deals across 6 F1 teams, V8 Supercars, a Premiership football team and the Rolling Stones,” says Mr Potter adding that the value of the deals ranges from $450,000 to $10 million.
At Williams Mr Potter worked with a suite of Fortune 500 brands including AT&T, Hewlett-Packard, the Royal Bank of Scotland, Philips, Thomson Reuters and PepsiCo. This feat was made all the more impressive by the fact that Williams is one of only four F1 teams which is not owned by a major corporation or a billionaire. Instead, 50.8% of its shares are owned by its founder Sir Frank Williams with 24.1% floated on the Frankfurt stock exchange and the remainder in the hands of other investors and management.
“We were competing against teams that were essentially underwritten by car manufacturers and we were an independent team reliant on prize money and sponsorship,” says Mr Potter. “That meant we had to work harder and we won some big deals on the basis that we really got under the skin of their business and were able to deliver a proposition that was aligned with their business and drives value.”
He adds that “we focussed on Business-To-Business relationships because that is an obvious and immediate way you can directly associate bottom line value to the sponsorship. If you can go to the chief financial officer and say ‘as a result of the new relationships we have developed through the sponsorship we have tracked this much incremental business’ then all of the other marketing intangibles and brand building benefits are the icing on the cake.”
Rush was built on this principle of applying business rigour to the decision-making process for sponsorship and setting at the outset key performance indicators to monitor its effectiveness.
“There are two things that make us unique and different,” says Mr Potter. “The first is our approach. The focus of Rush is getting to know the brand’s business.” This is no idle boast as Rush takes a hands-on and thorough approach which even extends to interviewing key executives in the company which is seeking sponsorship.
“We prefer to interview key stakeholders from across the business, not just sales and marketing, to gain a deep understanding of what drives value for the business, what strategies they are employing to grow their business, what their individual challenges and objectives are. It’s often proved an enlightening exercise for the business itself.”
This helps Rush to identify the key performance indicators which the company sets to monitor the success of the sponsorship. “I believe that our process of identifying what your objectives and KPIs are from the outset and then tracking them through to an impact on the bottom line makes it much more tangible,” says Mr Potter.
He adds that Rush’s objective is to apply to sponsorship decisions the same due diligence which is done on major financial investments. It differs to the emotional approach which often drives sponsorship deals and sees brands partnering with certain sports because the owner or chief executive are fans of them. When this happens, brands tend not to do research into the opportunity which in turn makes it harder for the commercial department to track the return on investment.
“Especially during an economic downturn, a chief financial officer wants to know, just as they would if they were making an investment in a new factory or a new product, how many more units have been sold as a result of the sponsorship deal and has that affected our margin or the value of our business. So it is nice if you can go in and say that,” says Mr Potter.
He adds that the second factor which differentiates Rush from the competition is its focus on Asia. “Our market expertise is obviously in global sponsorship and high profile sponsorship properties but also in understanding the Asian market.”
Mr Potter says that before he founded Rush he had identified Asia as an ideal base of operations but the opportunity to set up the company there was more of a coincidence.
“I wanted to be in Asia because I felt strongly that there are quite a few sports marketing agencies in Europe and the UK and it is a difficult environment to stand out in whereas there are not many F1 agencies that have got a footprint in Asia with the level of competence and track record that we have.”
The catalyst for Rush being based in Hong Kong was the involvement of its founding partner, Australian businessman Peter Solomon. He founded Linmark, a global electronics and textile sourcing business based in Hong Kong and Mr Potter says “I had pitched them for sponsorship at Williams.” When Mr Potter left the team in 2010 he sent the business plan for Rush to Mr Solomon who agreed to invest in the business and suggested other shareholders./>/>
One of them was Susan Field who founded Impact Asia, a PR firm which was bought by global communications agency Cohn & Wolfe in 2011. She was joined by Paul Johnson, the former international managing director of Lloyds Development Capital (LDC), the private equity division of British bank Lloyds. He was a contact of Mr Solomon, who had been a consultant for LDC. After leaving the bank Mr Johnson set up the Tian Ma fund which specialises in east-west investments. “That was another connection to being in Hong Kong and building the business there,” says Mr Potter.
“Asia is a place that if you want to do business you have got to be there building relationships. I learnt that when I was at Williams targeting the area. You can’t just go out there for a meeting, come back and try and Skype or have phone calls.”
Mr Potter’s partners brought in-depth knowledge of the Asian market and have a combined 75 years of experience in Hong Kong establishing businesses in the luxury, travel, sports and financial services sectors. “It is a different environment to the west so we tap into that experience which is invaluable both for us as a business but also for our clients when they are considering how best to activate and deploy their sponsorships in the Asian markets.”
It has paid off as Mr Potter says that 80% of the value of the sponsorship secured by Rush has come from Asia. Indeed, the first deal done by Rush was with Asian private aviation business Asia Jet which became a sponsor of the Sauber F1 team in 2011 and had logos on the rear-wing end-plates of its cars. “Since then we have done over 25 deals,” says Mr Potter adding that “around 70% of the business is F1, in terms of sponsorship we have brokered.”
Rush now employs nearly 20 staff based in Hong Kong, Japan, India, Korea, Australia and the UK. Its specialism in the Asian market gives it an edge over rivals such as Right Formula, the British agency founded by Robin Fenwick, a former partner manager at the McLaren F1 team. Rush’s success has even put it on the radar of rights-holders outside auto racing.
One of Mr Potter’s closest contacts is Australian businessman Tony Cochrane who founded the country’s V8 Supercars series. In 2012 Mr Cochrane stepped down as V8 Supercars chairman to start up the concert promotion company, iEC Entertainment. Its clients include the Rolling Stones which went on an extensive tour of Asia earlier this year and wanted to sign a presenting partner. It became Rush’s entry ticket to the music industry.
“The Rolling Stones wanted to find a sponsor for the Asia tour but hadn’t been able to do so. Tony told them that Rush specialise in sports but their approach is excellent so it may be worth having a chat to see if it works with any of their clients.”
This discussion took place in late 2013 and Mr Potter adds that “given the timeframe we couldn’t just go out and tout it about.” It put Rush to the test as it had to match the opportunity with the business aims of brands on its client list. It soon found the perfect fit with the Asian division of British insurer Prudential and its asset management arm Eastspring Investments.
“We had been working with Prudential for probably 12 to 18 months and developed a really good understanding of what the challenges in their business were and what would be of interest to them in terms of adding value to their business through sponsorship.” Mr Potter adds that in just four to five weeks “we were able to package the deal with the Stones knowing what we needed to achieve for Prudential.”
The objective of the partnership was to motivate and energise Prudential’s sales force so the benefits included meet-and-greets with the band, backstage access and VIP tickets in addition to its brand being featured on the marketing material for the tour. Mr Potter says that it was a multi-million dollar deal and “is one of the largest music sponsorship deals done in Asia.” He adds that “Prudential saw a significant uplift in sales.” It put Rush on the music industry map.
“The interesting thing to come out of it is that we are now exclusive representatives for the Rolling Stones Memorabilia Tour which is a very exciting project.” The tour will launch next year in London and is essentially a mobile museum of personal items connected to the Rolling Stones. The tour is run by iEC and Rush has been appointed to secure a suite of sponsors including the presenting partner and other brands which get category exclusivity. It doesn’t stop there.
“Tony Cochrane and iEC were pleased and impressed with the work we did for the Rolling Stones and it has also led to us doing similar work for Elton John. We are currently representing Elton John’s Yellow Brick Road European Concert Tour for iEC this November and December,” says Mr Potter.
He describes working with the Rolling Stones as “a learning experience” and adds that “with a property as big and powerful as the Stones it is what it is and you know exactly where you are. In some ways that is helpful in other ways it is less flexible than some Formula One rights holders might be.”
Mr Potter says that “essentially it is the same process as with a sports sponsorship. The main differentiator is the level of access you get and that money-can’t-buy experience is increasingly what a lot of brands are after whether it is for internal incentives or consumer promotions. You find that music events and regional sporting events are much more accessible than Formula One. Access to the paddock is so heavily restricted even for some of the largest sponsors. To develop those money-can’t-buy experiences in Formula One you have to be much more creative, which I think we are.”
Rush has used its work in F1 as a springboard into other sports as well as the music industry. Its presence in Asia led to it being appointed to represent the sponsorship rights of the International Premier Tennis League (IPTL) which was founded by Indian tennis player Mahesh Bhupathi and Boris Becker.
The IPTL launches in November and a total of 28 former and current number one players will take part. It shakes up the traditional format of tennis tournaments. “The match format is that they play one set of men’s singles, one set of women’s singles, one set of men’s doubles and one set of mixed doubles. Just one set each and then the legends play each other,” says Mr Potter./>/>
“Tennis is one of the fastest growing sports in Asia which is why it appealed to us and I think this is a really exciting new format for the game particularly when it comes to attracting young people to it. As we have seen with Twenty20 cricket and the IPL, a fast game is a good game for engaging people on digital media and on TV.”
In turn, this expansion in India has led to Rush being appointed by Indian conglomerate Mahindra to set up the commercial and marketing operations for its team in the Formula E electric auto racing series.
“Asia is the big growth market but we are seeing growth coming back in Europe and the US so that is certainly on our radar,” says Mr Potter.
He adds that despite having shareholders linked to private equity, he isn’t looking at selling up any time soon. “The focus at the moment is very much on growing the business. My goal is to build a business which is not valued as a multiple of our numbers alone but also based on our reputation for excellence and delivering exceptional value for our clients. That takes a bit of time and it means we have to demonstrate that we have developed long-standing valuable partnerships.” It is already on track to doing just that.
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