Thursday, September 24, 2009

Potential Sponsors Are Missing Out on the NASCAR Game

Over the past year, sponsors leaving NASCAR has left a huge void in the sport. With the economy today, it's been difficult to replace them, leaving many teams underfunded (Robby Gordon Motorsports), unfunded (NEMCO Motorsports), or completely shut down (Earnhardt-Ganassi Racing no. 8). However, it's not like there aren't any potential sponsors out there - America is a consumer nation with companies abound! Many of these companies are simply missing out on the benefits of NASCAR sponsorship.

NASCAR, you see, has over 75 million fans from coast to coast... 75 million fans. That's almost 25% of the entire United States of America. NASCAR fans are some of the most loyal in the sports world, and the investment nearly always pays off. Last year, Alltel reported that the company receives a 6:1 return ratio from it's former NASCAR sponsorship (Alltel phased out their sponsorship this year because of conflicts with NASCAR's exclusivity deal with Sprint); that means, for every dollar Alltel spent, the company got 6 dollars in extra business.

Now, that's impressive. Want more impressiveness? In 2008, Lowe's Home Improvement Stores can claim to have received $49,568,850 in extra income through their $15 million sponsorship of Jimmie Johnson's team.

A lot of sponsors aren't simply trying to get you to buy their product, though. What they're trying to do is get you to buy their product instead of someone else's - Lowe's wants you to shop at Lowe's instead of Home Depot, and Amp wants you to drink Amp instead of Red Bull, and vice versa. When the cup series' title sponsor was Winston, I never got an overwhelming urge to start smoking while watching a Winston Cup Series race, but Winston wanted people to smoke Winstons instead of something else. This works even for sponsors without a rival company sponsoring a car - Office Depot wants you to shop at Office Depot instead of Office Max, even though Office Max is not a NASCAR sponsor. According to one study, 47% of NASCAR fans like one company over another simply because they sponsor a team.

So, with Jack Daniels, Jim Beam, and DeWalt announcing they're leaving at the end of the season and still no sponsors to replace them, what companies are ripe to fill the void and are missing out?

Cruise Lines
Cruise lines are a multi-billion dollar industry world wide that would make an excellent fit in NASCAR. Cruise lines are competing over building the biggest ships, and big ships need power. What better fit for a cruise line than NASCAR? These companies are competing for each others business, and the two most notable consumer cruise lines who would most appeal to NASCAR, Royal Caribbean and Carnival, are continually vying for market share.
The thing about NASCAR fans is they take vacations too, and why not sponsor a favored driver's car to ensure fans take a cruise vacation instead of some other vacation, and go on their ship instead of someone else's ship. If Royal Caribbean and Carnival get into the sport, we now have two more primary sponsors.

Computer Manufacturers
I'm actually rather disturbed not to see any Dell cars, HP cars, or Apple cars around the track. The thing is, everybody needs a computer nowadays, so these companies would be appealing to a market that is buying computers anyway. Once again, Dell would be wise to get their logo on a car to ensure fans buy a Dell instead of something else. The market for computers is constantly evolving and shifting, and few computer users have a sense of what is the computer to get, and few computer users feel loyal to their brand. Why not use NASCAR to build this brand loyalty?

Restaurants
Has anyone else noticed the lack of resaurant chains sponsoring Sprint Cup cars? McDonalds (Richard Petty Motorsports) and Burger King (Tony Stewart) occasionally run a race, Taco Bell has a limited sponsorship of John Andretti, and Long John Silvers occasionally makes an appearance, but that's about it. Considering how often Americans like to eat out, this surprises me a great deal. Where is Perkins? Arby's? Panera Bread? Hooters? Cracker Barrel? Culver's? The pizza chains – Pizza Hut, Domino's, Papa John's? Once again, marketing is about trying to get people to buy your product instead of someone else's. Why aren't these companies trying to tap into NASCAR fan's infalliable brand loyalty?
NASCAR seems especially useful to unknown brands. Case in point: earlier this year, a restaurant chain called Tilted Kilt sponsored Todd Bodine's no. 30 Camping World Truck Series truck for a single race earlier this year. This caused their web server to crash due to the sheer volume of people trying to figure out what Tilted Kilt was. These smaller chains might not be able to afford an entire season, but a one or two race deal will still work out well for them (provided their web servers are up to par).

Airlines
OK, I'll admit the airlines have had a tough go of it lately, and many are cutting back their flights in an effort to cut costs and fill more seats. But, once again, this is a matter of getting a flyer to fly on your airline instead of another airline. Plus, NASCAR fans fly to racetracks all over the country - a United Airlines Racing fan would probably take a United flight to get there and back.
Airlines probably couldn't afford a primary sponsorship, but even an associate sponsorship to get fans to associate a sponsor with a driver goes a long way toward decision making. It is estimated that having the M&M's logo on Kyle Bush's rear quarter panel alone netted them $3,526,953, not to mention what the other parts of the car brought.

I'm sure one can think of more categories that I didn't list here. America is full of companies! Those that aren't in NASCAR or have left NASCAR are simply missing out.

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Other NASCAR Notes
This week, Tony Stewart visited the Hendrick Motorsports Chassis and Engine shop to personally thank the employees who have been supplying his equipment. Way to go. Tony Stewart the owner is far superior to Tony Stewart the anger-management-problem-ripping-cameras-out-of-reporters-hands that I watched growing up. Some of the guys in the shops work at thankless jobs who might get a pat on the back by the competition director. But having the owner/driver of another team come over and thank you has got to be a big shot in the arm.

In addition, Kevin Harvick Incorporated released development driver Cale Gale from his contract. This is a shame, considering KHI worked dilligently to get him some Nationwide Series races, but none of the sponsors were willing to go along with this untested, unknown kid who showed a lot of talent in the few races he was able to start. I hope he finds a ride in the future with a good team and can show what he can really do.


What do you think about all of this? Comments are welcome.
-David Dubczak

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