LONDON , England ( CNN ) -- Before the late 1960s Formula 1 was a quite different sport . The first thing that a casual observer would notice -- looking at pictures from this era -- is that the cars were void of any sponsorship . Semiconductor makers Intel and AMD slug it out on the racetrack and in the market place . Racing legends Juan Manuel Fangio , Jack Brabham and their contemporaries would lap the circuits of the Formula 1 Championship without branded baseball hats and overalls , without any stickers on their cars or without having to attend events to keep their sponsors happy . Towards the end of the 1960s , engine manufacturers began to realize the potential of advertising on their cars , and started to increase the size of their own logos . It was n't until 1968 that the first corporate sponsor made it onto a Formula 1 car , when the championship-winning Lotus team introduced the logo of Imperial Tobacco 's Gold Leaf brand on the side of their cars . Thereafter , Formula 1 and sponsorship became inseparable . While the drivers and the teams would still continue to battle it out on the track , Formula 1 has become as much about the business as about the racing . Today , the combined budget of all 11 teams is said to be in excess of $ 2.5 billion and the largest portion of this money is provided for by sponsors . Repeated market research has revealed that consumers consider Formula 1 `` sophisticated , dynamic and prestigious '' . Some of the larger sponsors commit hundreds of millions , over several years , to associate their brands with these appealing characteristics . The question remains , what exactly sponsors receive in return for investing such large sums . Obviously , the larger sponsors will receive a good size logo on a visible spot of the car or even become title sponsors such as ING with Renault or AT & T with Williams . Good television coverage has the potential to create outstanding results as the sport is watched by between five and seven billion people every year , providing work for an army of 10000 accredited journalists . In 2005 , the total advertising value of Formula 1 has been estimated at $ 5.2 billion or $ 0.74 per viewer . But what are the benefits apart from that fleeting glimpse of a logo when the car roars past the grandstands at 250 mph ? Clearly sponsorship is about more than visibility of a logo . Modern sponsorship contracts in Formula 1 are tailored to the needs of both the sponsor and the team . This often includes activities and promotions outside of the Formula 1 World Championship calendar . Melissa Berry , marketing manager for financial and news wire service Reuters , a sponsor of the Williams F1 Team explains : `` Our sponsorship contract with Williams F1 allows us access to the team 's drivers to help promote our brand and our business . `` Indeed , Williams F1 drivers have played a part in promoting Reuters products over the past few years . We also have the rights to use Williams F1 imagery to enhance our marketing communications materials and customer events . '' Sponsoring a Formula 1 team also gives a company the possibility to tap into a vast network of potential customers among its fellow sponsors , as the sport has already attracted some very strong brands from various different sectors . Rival semiconductor manufacturers Intel and AMD sponsor BMW Sauber and Ferrari respectively . And other sponsors include drinks conglomerates Pernod Ricard and Diageo , and telecommunications giants Vodafone and AT & T . This gives an unrivalled networking opportunity for blue chip companies . Where else but at Grands Prix can senior executives of consumer electronics giants casually rub shoulders with hedge fund managers and the bosses of IT firms ? This opportunity to network and exchange business ideas is a benefit of sponsoring a Formula 1 team not to be overlooked . Reuters ' contract with the Williams F1 team has delivered just that , says Berry : `` The team boasts the strongest stable of global business brands as sponsors , some of which are also our key customers or business partners -- for example RBS , Allianz , Accenture and Lenovo . `` The Williams F1 Paddock Club plays host to many senior executives from these companies over the course of a season and this can provide a platform for valuable business discussions or introductions . '' For the drivers this means that apart from having to deliver during the race , they also have to attend corporate events of their sponsors and appear in their adverts . Hence we see Alonso and Hamilton looking implausibly chummy in commercials for Spanish bank Santander . While seen as distracting by some , it is something the top drivers can not afford to do without . Without sponsorship revenue a driver is worthless to his team , as Christijan Albers found to his cost when he failed to bring in the promised sponsorship to Spyker . Juan Manuel Fangio and Jack Brabham competed in an era without commercial exposure -- and without anything like the financial reward . Thanks to sponsorship deals today 's drivers like Kimi Raikkonen and Fernando Alonso reap the benefits of their commercial exposure in the form of much higher salaries . E-mail to a friend .
Half of teams ' $ 1 billion is generated from sponsorship . F1 Paddock ##ing is a unique networking opportunity for senior drivers . They reap the benefit of increased sponsorship in the form of higher salaries .