It’s well known that NASCAR fans are a pretty loyal group, not only to the powerhouse brand name NASCAR, the sanctioning body, but also to the teams, their drivers and sponsors. In fact, one-half of avid NASCAR fans said they always buy sponsor’s products and participate in NASCAR-sponsored promotions.
Even so, NASCAR has not been immune to the difficult economy losing millions of dollars in attendance revenue as gas prices soared and consumers worried about their jobs. In reaction, sponsors put more emphasis on finding ways to measure the effectiveness of their sponsorship activities and putting more pressure on NASCAR to add value and provide assistance in those deals.
NASCAR currently has 40 sponsors including Coors List, Craftsman Tools, Coca-Cola, Old Spice, Camping World and Bank of America. It is also seeing signs of renewed interest. This year, TV viewership is up 17%, and there has been an increase in attendance at more than 33% of its races.
Norris Scott, the vice president of partnership marketing for NASCAR, talks about these challenges, the new sponsor expectations and how NASCAR is responding.
PROMO: Over the last 18 months, what have you experienced?
SCOTT: As a result of the economy, partners are looking for more tangible assets. NASCAR intellectual property is still the core benefit of the sponsorships, but partners want hospitality, and retail marketing, as well as event marketing, online promotions and B-to-B. Without a doubt the majority of our partners are asking to see those in their official partnerships with us. We’re addressing these needs with a five-year plan.
PROMO: Has exclusivity been affected?
SCOTT: Because of the economy, we know that properties and clients were reconsidering the value of exclusivity and maybe to some degree changing their mind, but we don’t see that here at NASCAR. When we talk to Coke or Office Depot exclusivity is still very important to them. Our clients tell us that it’s of the utmost importance. It’s a trend that remains strong as it relates to our partnerships.
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PROMO: What kind of pressure are you experiencing to show sponsors ROI?
SCOTT: Sponsors are looking for better ways to measure their success at the end of each year and especially at the end of the term of the sponsorship. We’re seeing this more and more as we have daily dialogs with our partners.
PROMO: How have these conversations changed?
SCOTT: One thing we’ve seen, not in every discussion, in the last two years is the involvement of procurement in the contract discussion to help the sponsor negotiate and evaluate the deal that they are getting. The tricky part about that is that usually the procurement folks are working with vendors, which is a little bit different than a sports sponsorship. I think that’s a result of the pressure that a lot of the brands are getting from their management. To do it right in NASCAR you need to spend millions and millions in sponsorships dollars and to integrate the marketing.
PROMO: What do you do in B-to-B?
SCOTT: About six or seven years ago we created the Fuel for Business Council, a group of partners that get together quarterly to do business and buy and sell each other’s products. It’s an exclusive environment. The interest in B-to-B partnerships is growing FOR and continues to be important. With the economies pushing our partners, who are looking for more tangible assists and value in their partnerships.
PROMO: Can you give me some examples?
SCOTT: UPS will come and we’ll set them up with other partners to talk about how Coke or other sponsors can use UPS. Ford Motor Co. last year sold $200 million of vehicles sales to other partners in the room, that’s a pretty substantial achievement for one of our partners.
PROMO: How do the meetings work?
SCOTT: A big part of these meetings we call “Speed Dating,” where three or four partners give presentations then we put partners together for a half hour to talk about doing business together.
PROMO: Have you offered anything new at retail?
SCOTT: We had, for the first-time, a program with our sponsor Dollar General in 38 states and 9,500 stores. It was a 10-week long exclusive retail program for our partners to participate in that centered around The Chase (a kind of playoff system) and included Unilever, Coke, Mars, P&G and others.
PROMO: Can you offer an example of a recent event?
SCOTT: Last week we held “NASCAR, After the Lap,” in Las Vegas. The Top 12 drivers drove around the strip and into the Hard Rock Hotel where we held an hour-long Q&A session for 3,000 fans. We had three sponsors—Ford, Coca-Cola and Sprint.
PROMO: Did you combine any other promotions with the event?
SCOTT: We ran a sweepstakes, “Send me to Vegas,” the grand prize was the chance to come to this event. In 10 weeks we had over 335,000 fans register and that was a 175% increase over last year. What’s great for Ford is they will sell vehicle through that sweepstakes and in a sophisticated way track sales tied to that sweepstakes. The sweepstakes is a way for our partners to activate and measure against to make sure they are getting the most out of their sponsorships.
PROMO: What is driving all the change?
SCOTT: All of the people we work with have respective bosses and they are getting pushed on the value of sports sponsorships. Which again I think is a general result of the economy. They want to see the value they have derived out of the sponsorships. The good news is at the end of the day we have a real competitive advantage and that’s our fans and their loyalty to NASCAR and their sponsors.