Tag Archives: NASCAR

NASCAR seeks new partner for its B-level series

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Ricky Stenhouse Jr. will be sporting this new paint scheme powered by Nationwide for his 2014 Sprint Cup debut.

With Nationwide Insurance announcing that it will no longer continue its entitlement partnership with NASCAR’s B-level series, the nation’s top motorsports organization will have to find a new company that is willing to be the one of the major faces of a sport who’s interest has been steadily declining in recent years.

The decision by Nationwide to abandon its sponsorship wasn’t necessarily driven by poor performance. They have actually chosen to increase its overall investment in NASCAR sponsorships by increasing exposure on Sundays, where the fan base is about twice the size of its current Saturday series. Nationwide will be sponsoring up and coming Sprint Cup driver and two-time Nationwide champion Ricky Stenhouse Jr., continuing its TV ad campaigns featuring select Sprint Cup drivers, all while increasing its online media and good will efforts.

For Nationwide, this decision seems like a no-brainer. Several studies developed by Performance Research indicate that there are solid returns to be made from an increased commitment to NASCAR’s top series. Nationwide’s longstanding relationship with NASCAR and its fans acts as a testament to these findings. With that being said, who will be willing to step into Nationwide’s shoes when the sport has been surrounded by so much controversy lately?

One can’t deny the sheer amount of people that consider themselves NASCAR die hards. On average, the Nationwide Series has pulled in about 1.7 million viewers throughout the 2013 season. While these numbers are down from last season, 1.7 million viewers is still a great number to have on a weekly basis over a 10 month season. However, one has to be wary when you see the fact that NASCAR’s ratings have been on a steady decline since 2005, sinking to their lowest level in 10 years

Some consider this downturn in recent interest as a direct result of a 2011 rules change which restricts drivers to only earn points towards one series per season. This means the big time Sprint Cup names that typically draw in fans to the Nationwide Series are no longer a key part of the action each week. Given the one-two punch of a decline in ratings and fewer big name drivers, who knows how long it will take the series to gain traction with its fans again.

And what about the issue of integrity?  The recent allegation of race manipulation against the Michael Waltrip Racing team has seriously damaged the competitive spirit of the sport and may spell the end of MWR. NAPA Autoparts has already pulled their sponsorship, with more sponsors waiting until the dust settles at the end of the season to decide if they are willing to continue their efforts. This wasn’t the first time MWR has been caught cheating either… Anyone remember the fuel tampering scandal of 2007?

From the outside looking in, one has to wonder how much of this continues to go unnoticed. While the organizing authority has enforced strict penalties on the team involved in the latest scandal, nothing may be able to make up for the damage done to the public’s perception of the sport.

This news comes in light of NASCAR signing a multi-billion dollar TV contract with FOX and NBC. While these two recently established networks are more than happy to open its doors to so many racing fans, it begs the question, why have ESPN and TNT been so willing to give up one of the only sport that consistently competes with the NFL for viewers each week? Perhaps NASCAR’s fan base isn’t as stable as this new deal would suggest. With NASCAR’s ratings in decline, who could blame the two incumbents for not wanting to pay any additional rights fees in order to renew their contract?

Sports Business Daily released the terms and conditions for NASCAR’s new entitlement sponsorship, expecting the new sponsor to shell out around $30 million a year in rights fees, activation and media expenditures. At this price, NASCAR is guaranteeing unmatched fan loyalty. Our very own Jed Pearsall will attest to the influence a NASCAR title sponsorship will have on consumer behavior. In a previous study on NASCAR fans, he said, “NASCAR fans provide one of the highest levels of brand loyalty and sponsorship support of any one of the hundred or so sports and special events we’ve tested.” In any case, it would be safe to say that any prospective sponsors should carefully consider paying a premium to replace Nationwide as title sponsor of NASCAR’s B-level racing series.

Image Source GFR Racing

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Army Pulls Out of NASCAR Sponsorship

The US Army, a presence in the NASCAR experience for nearly a decade, recently announced that it will no longer sponsor a NASCAR team as part of its branding and recruitment efforts. At one point the Army was a primary sponsor of NASCAR. They moved to Stewart-Haas Racing to sponsor Ryan Newmann in 2009. In exiting their sponsorship of SHR, the Army is effectively cutting its sponsor relationship with the motorsport indefinitely.

It’s big news made bigger by the fact that the move comes just days before the House takes up an annual spending bill that includes language intended to prohibit military sponsorship of sports.

The language in that bill is a result of an ongoing effort on the part of Reps. Betty McCollum (D-Minn) and Jack Kingston (R-Ga) to ban the spending of defense dollars on sponsorships (they’ve targeted NASCAR sponsorship in particular). We’ve been following this political initiative with our Sponsor Eye since Rep. McCollum took up the issue in 2010, and subsequently lost a House vote to keep the military out of sport sponsorships in 2011. You can see some of our tweets about it here and here, with links to Wall Street Journal and USA Today pieces.

While we can’t be certain that the bill is the whole reason the Army made its decision to pull out of NASCAR, we have a hunch it played a not-so-insignificant role. In any case, it’s an issue worth our two cents.

Let’s look at the Reps.’ argument: they assert that the approximately $136 million sliver of the defense budget spent on sport sponsorship is wasteful, as it doesn’t garner enough return in recruitment numbers.

Before moving forward, can we take a step back and look at some math?

The 2012 Department of Defense spending budget is around $707 billion (that’s billion with a B). At $136 million allocated for sport sponsorship spending, Reps. McCollum and Kingston are making a big fuss about a %.02 savings. And at only $8.4 million going towards NASCAR sponsorship specifically, it’s an even smaller margin. With government spending at an all-time high, going to battle over such teeny savings seems pretty petty.

Decimal points aside, who are two politicians with absolutely zero background in sponsorship effectiveness to say that military sponsorship of sport — in particular, NASCAR — is ineffective on the grounds that the recruitment numbers aren’t there? The Army has exceeded its recruitment goals every year since it started its relationship with Stewart-Haas Racing. But that’s almost beside the point.

Having been on the inside of researching military sponsorships, we have seen enormous opportunities and in some cases, very strong return on objectives —but maybe the Reps aren’t focusing on the objectives that really matter.

The goal of a sponsorship is never about sales, or recruits, or numbers alone. Putting a  logo on the side of a race car isn’t going to suddenly bring a spike in sales or enlistees. Humans are more complex than that. Sponsorship is more complex than that. The Army’s relationship with NASCAR is — or at least, should be — about building national awareness and an emotional connection with fans, and not necessarily only those fans who are in their target recruit demographic of 17-24 year old males. There are older and younger siblings, parents, teachers, and coaches who love NASCAR, and who influence the life and career decisions of those they’re close to. When the Army builds an emotional connection with NASCAR fans, they’re not only reaching the people who show up at the event. We’d be interested to see if the sponsorship effectiveness report that influenced the Army’s decision took the more emotional side of the partnership into account, and looked at the Return on Relationship that NASCAR sponsorship is best at.

When government officials recently questioned the value of so-called “junk food” sponsors involved with the Olympics we were left thinking the same thing: politicians should stick to legislation, and stay out of making calls on sponsorship.

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Trevor Bayne and NASCAR – Open for Business

This past Sunday, as we all watched rookie Trevor Bayne win the Daytona 500 by edging out a field of seasoned Sprint Cup pros, we couldn’t help but laugh at what great value his current sponsors were getting! Despite the innocent rookie move of forgetting to thank his sponsors in the post race interview, he was providing some serious value to his corporate backers.

Now let’s talk about the reality of the situation moving forward. Trevor Bayne is barely 20 years old and on the top of the world. Of course, while no one may even expect him to win the rest of the year (he isn’t even slated for the whole season at this point), one thing is for sure, guaranteed media attention. He is a media dream and an onslaught of new fans (over 20,000 new twitter followers since winning the race) will catapult him into the big time and the sponsorship should follow.

Sponsors that are considering whether or not to support Bayne have the opportunity to align with him right after his big win and be the saving grace that ensures his presence in NASCAR. Besides the long term results, these sponsors would immediately receive praise from his legions of new, soon to be loyal fans. We already know from past Performance Research Independent Studies that 72% of NASCAR fans would almost always or frequently choose the brand they associate with NASCAR over one that is not associated with NASCAR, and we can only expect this number to hold true for the sports new golden boy, if not be even higher.

That being said, we are keeping our ‘SponsorEye’ open, looking for the brand that jumps at this opportunity and attempts to make Trevor Bayne the household name that he has so much potential to become. In the meantime we anxiously wait to hear what Trevor decides to name his very own sundae later today at Ghirardelli Square in San Francisco!

For more on Performance Research and our Independent Studies check us out at www.performanceresearch.com

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What Sponsors Want To See!

Check out how much NASCAR fans really do know the sponsors:

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Danica makes a splash in NASCAR

Go Daddy Team Rider Danica Parick not only helped to break gender barriers this past weekend by racing in Daytona, she helped to break television records as well.  “The Danica Effect” caused 4.2 million people to tune into Saturday’s NASCAR second-tier Nationwide Series Race.  The race had the highest cable viewership ever experienced by the series.

Here at Performance Research we have always stood behind platforms that embrace uniqueness. On several occasions we have recommended to clients that supporting the first viable female NASCAR driver would push significant attention to their likeness.

With her multiple Super Bowl ads and high profile NASCAR start, Danica should expect to reap great rewards.  Now that all this attention is on Danica and her race car, I wonder how traffic on Go Daddy is fairing?

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Performance Research Independent Study : Consumers Switch To Sponsors Products

With the Daytona 500 approaching this weekend, thought we’d post a Performance Research Independent Study regarding NASCAR from 2000.   Check it out!

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Viagra and Lycos Outperform First Year Sponsors to NASCAR

According to a recent study by Performance Research, an independent market research firm based in Newport, RI, Lycos and Viagra gained consumer recognition with their new presence in NASCAR sponsorship.

Lycos’ first year as a primary sponsor for NASCAR driver Johnny Benson starts with high points…

The press around Lycos’ last minute signing of their sponsorship agreement with driver Johnny Benson the night before the Daytona 500 race combined with Benson’s exciting unexpected strong showing towards the end of the race boosted Lycos’ exposure as evidenced by the 12 percentage point awareness among NASCAR fans, ranking them first among all other first year Winston Cup sponsors. Boding well for Lycos is the fact that the study also found that Internet access among NASCAR fans has increased nearly 20 percentage points from 53% in July of 1998 to 70% in February of 2000.

Also getting a boost was Viagra who had impressive consumer awareness without even qualifying for the Daytona 500…

Viagra received 5% unaided sponsorship awareness in its first year as a Winston Cup sponsor, even though driver Jeff Fuller failed to qualify for the Daytona 500.

How important is this awareness…?

Past studies have shown that given the choice between two products of equal cost, 72% of NASCAR fans would almost always or frequently choose the brand they associate with NASCAR over one that is not associated with NASCAR. Interestingly as well, when there is a price differential, a strong 46% mentioned that they would purchase a brand costing as much as ten percent more if associated with NASCAR over a less expensive brand that is not associated with NASCAR.

In fact, 43 percent of NASCAR fans were influenced enough by NASCAR sponsorships to switch from their normal brand of a grocery store item to try a different brand. Tide came up as a beneficiary of this sentiment with 20 percent of all consumers questioned switching from their normal brand to try out Tide. Among others mentioned most often were Kellogg’s, Cheerios, Coca-Cola, M&M’s and Budweiser.

The current demographics of NASCAR fans were recorded in this study as well. The typical fan was measured as male (68%), married (73%), a high school graduate (97%) with a total household income of $50,000 or more (68%).

Two- hundred (200) telephone interviews were conducted with a random nationwide sample of NASCAR TV viewers forty-eight hours after the 2000 Daytona 500 had taken place. The margin of error is no more than + 5%.

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