Winners’ Circle

By Nov 01, 2004

Two long-standing auto race series changed their title sponsors this year, and both are taking big steps to make their brands a winner with fans, while preserving the history of their respective motor sports.

Nextel Communications announced in June 2003 that it would replace R.J. Reynolds’ brand Winston as sponsor of NASCAR’s top racing series. The announcement came only four months after R.J. Reynolds said it would bow out as sponsor of the Winston Cup series following a 33-season run that began in 1971. Reston, VA-based Nextel is paying a reported $750 million for the 10-year deal, which was brokered by Octagon, Stamford, CT. It is the largest sponsorship deal in sports.

On the other side of the track, TruServe’s True Value told IROC (the International Race of Champions) in February 2003 that it wouldn’t extend its contract after a 15-year run as title sponsor. Crown Royal, the Canadian Whisky brand of Stamford, CT-based Diageo, stepped up and took the title sponsorship in an eleventh-hour deal, keeping IROC from the scrap heap. Diageo would not say how much it spent on the three-year deal for, but Greg Leonard, director of p.r./events for Diageo, said it is “significantly less” than the cost to sponsor a NASCAR Nextel Cup team, and that can run between $12 and $16 million a year.

Though the Winston name was synonymous with NASCAR, R.J. Reynolds had been limited in how it could market the partnership despite spending up to an estimated $60 million per year as title sponsor of the Winston Cup series. In April 2003, a California appeals court ruled that R.J. Reynolds violated the terms of the 1998 Master Settlement Agreement with plans for a yearlong nationwide billboard campaign with the Winston Cup series.

Nextel has been able to get behind the wheel and drive its brand awareness.

“When we started last June, awareness among avid NASCAR fans was well below our average in our traditional segments,” says Mark Schweitzer, Senior VP-marketing for Nextel. “We do exit interviews at each race, and awareness is double our consideration among the public in general.”

Speaking in September at Street & Smith’s Sports Sponsorship Syposium, Michael Robichaud, senior director-sports and entertainment at Nextel, noted that there are more cell-phone users than smokers at racetracks. “Newer fans did not identify with the Winston brand,” Robichaud says. “They did not know if Winston was the name of a cigarette or a cup.”

Nextel forged a presence at the racetrack by converting more than 1,300 signs that former title sponsor Winston had erected with those containing the black and yellow brand logo. Free from the restrictions placed on Winston, NASCAR NEXTEL Cup messages are also seen in neighboring cities, major markets and downtown areas surrounding race markets. Their goal is to “paint the town yellow” during race weekend.

A new line of NASCAR-themed phones include a NASCAR NEXTEL Cup Series color scheme and 10 driver designs — the first licensed phone models of their kind. Each phone is pre-loaded with content developed for NASCAR fans, including driver-specific wallpapers, ring tones, a digital racing stopwatch and NASCAR.com To Go. The phones are sold at Nextel stores and at partnered retailers. The NASCAR NEXTEL Cup Series logo appears on power chargers and carry cases.

At every NASCAR NEXTEL Cup race, fans flock to the Nextel Experience, the largest mobile marketing display in the history of sports. Known as “the Glass House,” the 6,400-square-foot venue boasts 11 plasma screen TVs, a “Wall of Champions,” Silicon Speedway racing simulators, a live engine change, Web cams to the garage area and more. Outside, two huge 80-by-80 foot jumbo-tron towers carry live track feeds and other NASCAR programming.

After 26 races, more than 300,000 fans had visited the Nextel Experience, which travels from event to event on nine tractor-trailers and takes two full days to construct. National Tour, Rancho Santa Margarita, CA, handles.

Nextel found that only one in five cellular calls made from speedways on race weekends is successfully completed. The company brought in equipment to improve reception at all 23 speedways on the NASCAR NEXTEL Cup circuit. Each week, Nextel dispatches four of its “Cellular On Wheels” (COW) trailers to the speedway, parking a 53-foot mothership in the infield, and deploying three 28-foot SuperCOWs outside the track.

More than 500,000 fans registered for a contest to predict Chase for the Cup drivers. One fan will receive $250,000 for correctly predicting the 2004 Nextel Cup Champion. Fans entered online; through any Nextel phone with Nextel Online service; by purchasing a Nextel phone at any Nextel retail store from an authorized rep; or at the Nextel Experience.

What Nextel has done is working. According to a study released by Menlo Park, CA-based Knowledge Networks in September, Nextel has achieved awareness among nine of 10 fans. The study found that 89% of NASCAR fans ages 18-49 are aware of Nextel’s sponsorship, and that almost three-quarters of NASCAR fans believe that Nextel has done a “very good” or “good” job in connecting with NASCAR and its fans.

The proportion of 18- to 49-year-old NASCAR fans that say they are aware of Nextel because of its NASCAR sponsorship increased tenfold, from 1% to 10%, according to the same study. Overall awareness of Nextel increased from 77% to 90% from those identifying themselves as NASCAR fans; and awareness among all 18- to 49-year-olds grew from 77% to 82%. NASCAR fans 18-49 are five times as likely to have started or switched to Nextel over the past year.

Throughout NASCAR broadcasts this year, Nextel has received about 19 hours of equivalent advertising time in signage and mentions. That’s worth about $145 million, according to sponsorship evaluation firm Joyce Julius & Associates.

Mike Mooney, director-corporate communications for the NASCAR NEXTEL Cup, says Nextel knew from the beginning that the sport is all about building relationships. As Mooney says, if Nextel had tried to implement everything it wanted to do in its first season, it would have set itself up to fail.

Mooney says Nextel will assess what programs and platforms worked well in 2004 after this season ends on Nov. 24. It will formulate plans for the 2005 season, which begins in February, based on what worked to drive consumers, industry and businesses to Nextel.

Diageo would love to be a part of the NASCAR NEXTEL Cup scene as a team sponsor. But in June, when it wanted to spend millions to sponsor Jeff Burton’s No. 99 Ford, NASCAR said no. NASCAR does allow beer and malt liquor sponsors but has had a long-standing policy of not permitting spirits advertising at any of its events or as team sponsors.

Permitting a company like Diageo to join the NASCAR family is something that Robichaud and other NASCAR sponsors attending the Sports Sponsorship Forum say they are in favor of, as long as they are promoting a message of responsibility.

That’s what Diageo’s Crown Royal brand says it does in each and every aspect of its IROC sponsorship and campaigns. “Be a Champion, Drink Responsibly” appears on everything from the specially built IROC racecars to the uniforms worn by its drivers.

IROC is the equivalent of auto racing’s All-Star Game. The IROC series event first took place 31 year ago at Riverside International Raceway in California. It is an invitational racing series that matches 12 drivers from different disciplines of auto racing — including NASCAR, Indy Racing and World of Outlaws dirt-track racing — in equally prepared cars on Goodyear Eagle radial racing tires. The Series consists of four 100-mile races with points awarded for finishing positions.

It was conceived in 1973 as a made-for-TV racing series for ABC’s Wide World of Sports. It was a rare pre-cable-TV chance for race fans to see their favorite drivers in action.

Unlike NASCAR, where the cars are wrapped with each team’s sponsor’s logos, all 12 competing IROC cars are white with the Crown Royal IROC Series logo on the hood. The only difference in the cars is the trim and numbers, which are imported from each driver’s native team to help fans retain the driver’s identity. So fans at the track or watching one of the four annual events live on Speed Channel, get one hour of nothing but exposure to the Crown Royal brand.

Like Nextel, Crown Royal wanted to make consumers and fans aware of it sponsorship right off the bat, while preserving its history.

“We didn’t want to just look at what True Value had been doing and copy it. We had a stand-alone program, and we very much wanted to include our responsibility message with it,” Leonard says. “It would be unfair to speak about other sponsor initiatives when True Value had the property. We want to offer to fans a Crown Royal IROC program that reflects its conceptual creation.”

To promote its racing presence, Crown Royal has done meet-and-greets with 2003 IROC Champion and 2004 NASCAR NEXTEL Cup front-runner Kurt Bush at places ranging from Boston’s Fenway Park to a go-kart track in Richmond, VA.

It also produced a limited-edition Crown Royal bag celebrating Bush and featuring each of the 12 drivers who are competing for the million-dollar purse, and uses standees of the drivers in their Crown Royal IROC uniforms in what it considers to be key Crown Royal retail markets.

Leonard says the success of its 2004 partnership with IROC will lead to an evolution of the series for both the racing and whisky brands. Diageo envisions a Crown Royal IROC Series that can recruit from many global racing series and it sees this series racing on a multitude of tracks — not just ovals at venues used by NASCAR.

“We created a first for IROC by staging a race on a short oval at Richmond International Raceway, and we want to continue evolving with the property in this fashion,” Leonard says. “What is so wonderful is we have a Series in IROC that is as open to growth as we are, they are visionaries with unbelievable pedigree in racing. These are the types of associations that truly deliver for both brands future marketing needs.”

NASCAR Fans Are Everyday People

NASCAR Dads” is a term coined by a political pundit that is being used to describe the swing voter, like “soccer mom” was used in past elections. The term is now part of the political lexicon.

“We view this as a compliment to our sport and our fans — acknowledging that NASCAR’s national fan base is a large and growing segment of the electorate that is well worth wooing,” says Andrew Giagnola, NASCAR’s director of business communications.

The term was born in 2003 to describe rural, white, blue-collar, mostly Southern voters.

However, NASCAR and its fan base are so diverse that it has become as much a slice of mainstream America as apple pie. That happened well before Nextel became title sponsor of auto racing’s top series. What began as a distinctly Southern way of life has grown into a sport with a fan base of 75 million. It’s why politicians are hoping to swing their votes, and also why brands are willing to shell out millions to become sponsors of NASCAR or its racing teams.

According to research done for NASCAR in 2001 by Ipsos Reid, one-third of the U.S. adult population calls themselves NASCAR fans. “Uninvolved Fans,” as NASCAR calls the low intensity followers, make up 12% (9 million) of its fan base, while the hard-core “True Believers” make up about 40%, or 30 million.

As of 2002, one out of three fans had been interested in NASCAR for less than five years, and 23% of its fan base had been following for six-10 years.

Compared to the average American, Giangola adds that the typical NASCAR fan is more affluent and more likely to have children under 18. Women make up 40% of the sport’s fan base, and people of color account for 20%, making NASCAR the fastest-growing major sport among minorities.

Also, NASCAR has the most Fortune 500 involvement of any sport, with sponsors ranging from telecommunications to pharmaceuticals to consumer products companies. These companies are involved in the sport to connect with who Giangola says are the most brand-conscious and brand-loyal fans in professional sports.

“If Dale Earnhardt, Jr. says to do something, the NASCAR fans are going to do it,” said Nextel’s Michael Robichaud of Earnhardt, Jr., the circuit’s most-popular driver and a pitchman for brands such as Budweiser, Drakkar Noir, KFC and Wrangler Jeans.

Ipsos Reid’s reasearch proves Robichaud right. In 2002, fans said they were three times as likely to try and purchase NASCAR sponsors’ products and services as non-fans.