Apple may not be playing the exact same game as other streaming platforms when it comes to advertising, but the tech giant tells The Hollywood Reporter that its ad business is getting a major boost from one of its recent additions: Formula 1.
Todd Teresi, VP of Apple Ads, tells THR that according to brand lift studies commissioned by Apple and its advertisers, those that sponsored F1 on Apple saw an increase in brand familiarity, brand favorability, and purchase intent — beating overall U.S. CTV benchmarks.
“We’re really thinking about what is the right way to have the advertiser become seamlessly part of this experience,” says Teresi. “So if you look at F1, you can see it in the actual product itself, because we’ve integrated these brands in a way that they don’t get in the way of the fan enjoying the content and following their teams, but they’re present. These brands are present and can be felt inside the race, inside the programming, and really what that means is it’s great exposure for the advertisers because they’re right along and right in place with that kind of passionate fan.”
F1, Teresi notes, attracts an upscale audience, which Teresi notes that studies show has a higher median income than other major sports like the NFL or NBA, which in turn is bringing in premium brands.
Indeed, for its first season with F1, Apple secured significant deals with American Express and Ford, with both brands expressing enthusiasm as the tech company begins to think about selling its second season with the sport.
“With Ford’s return to F1, we’re meeting fans where they are and telling our story in a bigger way than ever,” said Will Ford, GM of Ford Racing. “Apple TV is a tremendous partner in helping us reach new audiences, and we’re already seeing stronger awareness of Ford Racing and Ford’s leadership in innovation. As we celebrate 125 years of racing at Ford, we’re focused on leading the next generation of motorsport fandom and culture, and Apple TV is a key partner for us in doing this.”
“Connecting with F1 fans at home is just as important as delivering special access and experiences at the track,” adds Jill Hamilton, VP of global media, American Express. “Advertising in F1 on Apple TV gives us another opportunity to deepen our connection with fans and showcase the value of AmEx Membership, from securing AmEx Presale Tickets to booking travel with AmEx Travel to enjoying exclusive perks and experiences on race day.”
The ads, Teresi notes, are thoughtfully integrated so as not to distract from the racing, and the company worked with existing F1 sponsors (who are already featured on cars and uniforms) as it pursued deals.
“It’s not just about simply putting ads in. We want to be really thoughtful in how we integrate advertising into our products,” Teresi says. “We took that same approach for F1, and it started really with first and foremost the brands, because there’s nothing worse than having a mismatch of brands, and so you want to have the brands that are really fans of the sports, ones that understand what the sport’s about, they have a passion for the sport, but you also want them to be committed to leaning in and participating and growing the sport.”
Eddy Cue, the Apple executive who oversees its entire services business, said that viewership of F1 on Apple TV is up double digits compared to ESPN last season. Those numbers are still modest compared to, say, the NFL (ESPN averaged 1.3 million viewers in its final season with F1), but with a younger, wealthier and more engaged audience, Teresi nonetheless says that it is having a meaningful impact on Apple’s ad ambitions.
Apple, like all tech companies, has a core advertising base built around intent (think search ads in the app store or in Apple Maps) and an ad business built around video and media in Apple News and Apple TV. But Apple TV does not have the ad breaks or sponsorships that Netflix, Hulu and other streamers do, instead limiting ads to live sports like F1 and MLS in the name of customer experience.
“Do we monetize F1 really well? Yes. Do we have very industry leading CPMS? Absolutely, because it’s a high premium audience, and advertisers want to engage with those customers,” Teresi says. “But it’s a much smaller audience and it’s a U.S. audience only, whereas all these other businesses are global and they have heavy search intent.”
But that doesn’t mean it isn’t working towards Apple’s goal of creating a meaningful ad business that still works within its ethos of creating great experiences, something that other ad-supported product are not always the best at.
“The goal here is not grow advertising at all costs, it’s to create this balanced model of great experience for the customer and value delivered back to the advertiser, and we feel like if we get those two things right, then we feel like that’s the way in which we’ll grow an advertising business here,” Teresi says.