Fan loyalty to sponsors’ products fuels NASCAR success
DAYTONA BEACH — Dale Earnhardt Jr., Jeff Gordon and the other drivers competing in today’s Daytona 500 aren’t the only ones hoping to win big this season.
So are the many corporate sponsors whose logos appear on everything from race cars and drivers’ uniforms to the signage throughout Daytona International Speedway.
But for sponsors, the goal isn’t winning the Harley J. Earl Trophy, it’s convincing NASCAR fans to buy their products.
The good news for NASCAR is that its fans continue to be more likely than fans of other sports to buy the products and services of its sponsors, according to global market research firm IPSOS Insight.
That intense fan loyalty has helped NASCAR hang on to the majority of its sponsors during the recession.
Now, with the U.S. economy finally showing signs of recovery, motorsports sponsorship spending in North America is predicted by Chicago-based market research firm IEG to rise 4.2 percent this year, compared with last year.
While IEG’s report earlier this month did not break out how much of that forecasted sponsorship spending is expected to be NASCAR-related, William Chipps, senior editor of the IEG Sponsorship Report, confirmed in a phone interview that NASCAR typically receives “the lion’s share” of motorsports sponsorship sales in North America.
Companies in the U.S. and Canada are expected to spend a combined total of $3.51 billion to sponsor teams, tracks and sanctioning bodies in 2011, up from $3.37 billion in 2010 and $3.3 billion in 2009, Chipps said. “Without a doubt, the tide has turned in terms of corporate interest in motorsports.”
Street & Smith’s Sports Business Journal earlier this month interviewed a cross section of NASCAR fans on how sponsor ties to the sport and their favorite drivers affect their buying habits. All but one acknowledged sponsorships did affect their decisions on where to shop and what to buy.
One fan, Dan Macke, a 39-year-old attorney from Albuquerque, N.M., told the Sports Business Journal: “I’m realistic enough to recognize that the sponsors pay the bills. The sponsors put the cars on the track. The sponsors are responsible in large part for my enjoyment of the sport.”
Andrew Giangola, a spokesman for NASCAR, said his company is “bullish on the prospects for increased sponsorship sales” this year.
One key, he said, is being “sensitive to our partners’ needs. We are focused on adding more value to provide the best return for sponsors’ dollars.”
One way NASCAR does that is by offering customized sponsorship packages.
Three years ago, NASCAR signed Kroger, the nation’s largest grocery operator, as one of the sponsors for the Daytona 500 even though the Cincinnati-based retailer doesn’t have stores in the Daytona area.
Instead of displaying its name at the Speedway, Kroger’s sponsorship deal allows it to exclusively offer at its stores national name brand products, such as General Mills and Kelloggs cereals, in special packaging commemorating the “Great American Race.”
Daryl Wolfe, vice president and chief marketing officer for International Speedway Corp., which owns Daytona International Speedway and 11 other NASCAR racetracks, said his company has been “encouraged by initial corporate spending trends in many areas with agreements in place for the substantial majority of our annual budget” this year.
“The IEG Sponsorship Report confirms what we have seen time and time again that an investment in NASCAR can be the most efficient and effective of all sports because it is driven by the responsiveness of the brand loyal race fans,” he added.
Patrick Perkins, vice president of Hendrick Motorsports, said team sponsorships have been affected by the economic decline, just as has the NFL, NBA and Major League Baseball. “It’s probably more visible in NASCAR because of the high-profile nature of our corporate partnerships.
“But we’ve been seeing positive signs in the marketplace for probably a year or more, so I’d say that corner’s been turned. Interest around sponsorships has increased, and the overall tone of conversations is encouraging,” Perkins said. “Good things are happening, and there’s a lot of positive momentum.”
When Jeremy Clements, a NASCAR Nationwide Series driver, lost his primary sponsor in midseason last year, he signed with Daytona Beach-based RaceDaySponsor.com, a startup launched by entrepreneur Tim Viens last year to sell sponsorships for Kevin LePage, another Nationwide driver.
Thanks to Viens, who managed to land the Daytona Beach Kennel Club & Poker Room and SickBoys’ Bad Habits Lounge in Daytona Beach as sponsors, Clements was able to compete in Saturday’s DRIVE4COPD 300 race at Daytona.
Clements said the amount he raises from sponsors determines not only how many races he can enter, but whether he will have a legitimate shot at winning those races.
Raising just the bare minimum forces drivers to cut corners. “You kind of hurt yourself,” he said.
Clements said he is hopeful working with Viens will allow him to be much more competitive this season.
Eric Wright, vice president of research and product development for Joyce Julius & Associates, an Ann Arbor, Mich.-based firm that measures media exposure generated from sponsorships of sporting events, said the number of brands receiving exposure on telecasts of NASCAR races, not counting commercials, has steadily risen each year, even during the recession.
The lone exception was last year, when the number of brands seen in telecasts dipped to 1,423, down from 1,431 in 2009.
Of potentially greater concern to NASCAR, said Wright, was the decline last year in sponsors for “paid elements” of its race telecasts, such as the “brought to you by” segments.
“This year will be key for NASCAR,” Wright said. “If (paid-element sponsors) return to 2009 levels, then 2010 was a one-year fluke.”
But if those numbers continue to decline, NASCAR’s negotiations with its television broadcast partners for new contracts in 2014 “could get very interesting,” he said.
Copyright © 2011 The Daytona Beach News-Journal
