In 2010 The Wall Street Journal analyzed American football telecasts and concluded there are only 11 minutes of live action in a game. The rest is replays, commentary, and commercials. In next week’s Super Bowl there will be about 100 commercials (the record so far was set in 2013 at 97) and advertisers are paying $7 million for each 30 second slot – plus the cost of producing a quality commercial which could be another $1 million. $8 million to be one in 100 trying to appeal to the 100 million people expected to watch Super Bowl 57.

Red Bull tried the Super Bowl once in 2014 and has never been back. Red Bull prefers to market through experiences.

Today in New York, Red Bull Racing launched its 2023 Formula 1 season. Formula 1 TV broadcasts have no commercials. Over 100 million people watch each Formula 1 event with a cumulative audience of 1.55 billion last season.

This Super Bowl, Formula 1 comparison may be a mouse and an elephant thing. They are both four legged, but don’t have much else in common. $8 million may seem like a big check, but Red Bull Racing’s annual budget is $238 million and the project is nearing 30 years in the making. Luckily, a good deal of the cost is offset by sponsors. More on that later.

Red Bull got started in Formula 1 as a sponsor in 1995, and in 2005 purchased the Jaguar Racing team. Last year Red Bull won both the driver’s championship and the team championship. On March 11, Netflix will drop season 4 of Drive to Survive. It’s series about Formula 1. Clearly, there are many brands present on Netflix and at Formula 1 events, but right now no brand is shining brighter than Red Bull. It is nice to know that Dietrich Mateschitz, the co-founder of Red Bull, was able to see his dream for the Red Bull Racing team at the top of the grid before he passed away at the age of 78 last October.

Mateschitz and Thai businessman, Chaleo Yoovidhya, founded Red Bull in 1984. At the time Yoovidhya was the purveyor of Krating Daeng, an energy drink favored by truck drivers and laborers in Thailand. They positioned Red Bull as a premium brand in Europe and held their first event at a ski resort in Austria in 1987. Red Bull is most certainly an acquired taste and has about the same amount of caffeine as coffee, which is three times the caffeine found in Coke or Pepsi.

Red Bull has a single bottling and distribution partner, Rauch Fruchtsäfte, a company based in Austria with 17 production facilities worldwide. Red Bull is privately held, and reportedly has about €9.6 billion in revenues and spent €2.4 billion on sales and marketing in 2022. Sales are growing at 24% year over year with over 11.5 billion cans of Red Bull sold in 2022. The European Brand Institute values the Red Bull brand at €16.96 billion.

In 2002, Dietrich Materschitz, gave a rare interview to the Economist that appeared under the headline: “Selling Energy”. The article contains two revealing quotes that give us a view into Red Bull’s marketing strategy:

“We don't bring the product to the people. We bring people to the product. We make it available and those who love our style come to us.”

“The market isn't generic; it doesn't exist if we don't create it. It's a branded market,”

Materschitz is considered a pioneer in experiential marketing. He was always looking for something new and crazy to engage his young and energetic audience. Including the $30 million sponsorship of Felix Baumgartner’s 24 mile free fall from space that we looked at in Wednesday’s post.

After three decades of heavy investments in this strategy, Red Bull now owns 17 sports teams and scores of special events. I would call some of them mainstream, like Formula 1 or Soccer teams, and some are out there like the space free fall and soap box racing:

Soap box racing is to Formula 1 just like that mouse and the elephant. There is a track, and the vehicles do have wheels, but after that the comparison breaks down a bit. Similar or not, at either event, everyone is all jacked up on Red Bull and having a great time. The events are all Red Bull, all the time, and there are no other brands competing for attention.

Ever since the very first day, on the ski slopes in Austria, Red Bull has been building a premium brand aimed at the young, active, and affluent. They have done so with quality and consistency, and built a highly valued worldwide brand in the most coveted 18-34 demographic. So valuable in fact that other companies are paying to be part of it.

Last year, Oracle signed a $500 million, five year sponsorship deal with Red Bull Racing. That must have been fun for Dietrich Mateschitz to see. A US tech giant, with a market capitalization of $250 billion, paying Red Bull Racing $500 million to be part of the experience. What a vision he had that day in Thailand. And his commitment to it enabled him to grow a $500,000 initial investment in Red Bull into a personal fortune worth over $20 billion.