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Banking on NASCAR

WITH TELEVISION RATINGS down, attendance figures no longer released and some big-name drivers such as Jeff Gordon and Tony Stewart set to retire, one might think sponsors would be slamming the door shut, switching on the ignition and putting the pedal to the floor to get away from Nascar.

It is undeniable that the series has endured a relatively turbulent few years. It was also recently announced that web-hosting operator GoDaddy and beer brand Budweiser will end their high-profile primary team sponsorships at the end of this season.

Meanwhile, July’s Sprint Cup race from Dover drew just 3.2 million television viewers in comparison with 5.5 million as recently as 2007. A Sport Media Watch report released the same month said that all Nascar races on paytelevision platforms this season had attracted either record-low viewing figures or the smallest audiences in more than a decade.

So, if it is all so gloomy, if the sport is really hitting the brakes, why is it that one in four Fortune 500 companies are now invested in Nascar – a figure that is some eight per cent higher than the apparent glory days of 2008? Why do blue chip corporations such as Coca-Cola, Hewlett-Packard and Visa want to be seen on this barren racetrack?

One of Nascar’s most high-profile commercial partners is leading carmaker Ford, which has been involved since the series’ very first race in 1949 when Jim Roper, driving a Lincoln, romped home to victory.

Ford is in a unique position as both a manufacturer and an official sponsor of the series, but Tim Duerr, motor sport marketing manager at Ford Performance, is insistent that the relationship has not endured simply through sentiment.

“There are 75 million fans that follow Nascar,” Duerr told SportBusiness International. “It the number-one sport for fan loyalty in the United States, and the number-one overall spectator sport. We do a lot of research within the sport. Our race fans score higher in purchase funnel brand attributes than any other customer of Ford Motor Company – they are our best customers.”

Duerr added that the company’s strategy is to target the 40-per-cent of Americans that intend to buy a car and are also motor racing fans, and turn them into Ford owners.

Ford’s own market research shows that across the US, some 57 per cent of people have a favourable opinion of Ford and 54 per cent would consider buying one, but those numbers shoot up to 91 per cent and almost 90 per cent, respectively, among Ford Racing fans.

Perhaps the most staggering figure is that while 14 per cent of the general market have an actual intention of buying a Ford, that rises to almost 50 per cent among Ford Racing fans.

“We don’t have a purchase funnel,” said Duerr. “We have a barrel. That’s how loyal the Ford Racing fan is.”

We don’t have a purchase funnel, we have a barrel, that’s how loyal a Ford Racing fan is

As well as pure sales, Duerr is also positive about the softer benefits of the continued popularity of the sport, citing the fact that Nascar’s website attracted more than one billion views last year. Ford Performance’s own 3.3 million Facebook fans and hundreds of thousands of Twitter followers add to the reach of the brand amongst fans of the series.

“Exposure on track and television is important, but times have changed and social media has become huge,” said Duerr. “The way that Nascar and Ford execute digital and social footprints is massive.”

Good Chemistry

Of course, one would expect that a vehicle manufacturer might benefit from involvement in a car racing series, but what of those companies that would seem to have less synergy with motorsport?

Nascar’s 58 official sponsors range from chocolate brand M&Ms to financial group Bank of America, while team sponsors range from fast food chain McDonald’s to retail lender Quicken Loans.

Dow Chemical is another company that one may not naturally associate with motor sport, but the multinational chemical corporation actually makes the foam used in the door panels of Nascar vehicles and is also a partner of the Richard Childress Racing (RCR) team and driver Austin Dillon’s iconic number three Chevrolet car.

Dow first became involved with Nascar in 2007, when it was interested in exploring the benefits of sports marketing, but also interested in working on research and development projects.

The gains it identified led to the signing of a long-term team partnership with RCR in 2013, but while Dow now benefits from car and on-track branding, the technological possibilities of what it considers a “rolling test lab” make Nascar a unique prospect – even for what is an official worldwide Olympic partner.

“The thing we like about Nascar is it tends to provide more behind-the-scenes access to the sport itself, as well as the business of the sport,” Joe Harlan, the chief commercial officer and vice-chairman of Dow’s Market Businesses, told SportBusiness International.

“This helps us achieve all our objectives in ways we can’t necessarily do with our other sports programmes. The rolling test lab that Nascar has become for us and other sponsoring companies, to drive innovation, is really the untold benefit story behind the sport.

“In addition, the fact that Nascar runs almost year-round in a large number of markets across the country is a huge benefit to our various business units that have many different types of opportunities from both timing and regional perspectives.”

As well as driving technological improvements, Dow also uses what it calls its “activation platform” within Nascar as a catalyst for business-to-business growth and increasing trade opportunities with current customers.

Never too Much

Sponsors and partners can tap into numerous benefits from becoming part of the Nascar family, with various promotions and events encouraging co-operation between companies.

The Fuel For Business Council gives Nascar’s official partners the opportunity to engage in quarterly business-to-business meetings where they can buy and sell goods, forge marketing partnerships and cross-brand promotions and network.

Ford also extends such opportunities to the sponsors that work with its teams, and with the backing of one car for one race estimated to be as little as $5,000, many smaller firms are able to join the logos of the big boys – who could be paying up to $20m to sponsor a major team for a full Sprint Cup season – on the chassis.

With a grand total of 130 companies engaged as Nascar series entitlement sponsors, official sponsors, performance partners and team sponsors across three different series, some suggest there is an overload of logos vying for the viewer’s attention within the sport.

Duerr disputes this criticism, adding “there can never be too many”, while Harlan believes it is for the individual company to make the most of its position.

“Every sport has its challenges and issues,” he explained. “From handling of injuries and personal conduct issues, to empty seats, to deteriorating viewership. Sponsors need to be aware of them and what effect, if any, the issues have on their brands by virtue of being tied together.

“In our case, we have found so much upside to being engaged in Nascar and have little to no concerns with any perceived issues that Nascar might have. We specifically like the fact that more Fortune 500 companies are participating in Nascar, that national viewership and attendance are solid, and that the loyalty of the fans, as well as the businesses to one another, is unwavering.”

The series certainly faces challenges, but with partners able to secure clearly defined financial, operational and marketing benefits, it seems there is still plenty of gas in Nascar’s tank.

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