The Business of Sports

Nascar Speeds into Chicago


Hello, Chicago.

As Nascar Sprint Cup Series drivers prepare to tear around Chicagoland Speedway in the first race of the 12-driver, 10-race Chase for the Sprint Cup, the racing circuit acknowledges that 2012 will bring significant change. Does the phrase “full-time Danica Patrick” ring a bell?

Patrick, who made her racing reputation on the Izod IndyCar circuit before announcing she’s switching to Nascar full-time next year, definitely moves the marketing needle. Bob Parsons, chief executive officer of Patrick’s primary sponsor, GoDaddy, during an interview last week also credited her with helping the company sell off a piece of its business in August for $2.25 billion. “We cross-branded each other,” Parsons said. “She became GoDaddy, we became Danica Patrick.”

With more top international companies involved than in any other sport, Nascar works for business. That’s because Nascar fans make it a point to purchase partner products and services, making them the most brand-loyal in all of sports.

But in the current economy and as the popularity of the sport has declined from its peak in the early to mid-aughts, fewer new brands are signing on as Nascar sponsors, some existing sponsors are reducing their spending, and the number of full-season, primary sponsorships comprises fewer races. As a result, many sports marketing agencies that have leaned heavily on Nascar for years now have clients looking at opportunities with other sports properties.

No agency, as SportsBusiness Journal affirms, is more familiar with the evolving Nascar landscape than Just Marketing International. Five years ago the motorsports-exclusive agency was reportedly signing five to six new corporate Nascar clients a year. In 2011, it added just one new Nascar client, Farmers Insurance, and watched another longtime client, Diageo (DEO), dramatically decrease its spending. Just Marketing has also seen its business shift from being 30 percent international in 2008 to 60 percent international today, due largely to clients’ growing interest in such emerging markets as South America and Asia.

Nonetheless, many sports marketing agencies are optimistic that their Nascar business share will grow in the future. For the first time in five years, Nascar’s TV ratings are on the rise across ESPN, Fox, and TNT. Nascar is also amping up its live online presence; nine of the 10 Chase races will stream live online via WatchESPN.com, the free WatchESPN app, and Nascar.com’s RaceBuddy platform.

While other engines gear up in the Windy City, Nascar, its sponsors, race teams, and drivers are revving up their marketing activities around the Chase. New Sprint Cup Series sponsor Dollar General (DG), seizing upon decreased sponsorship costs to trade up from the Nationwide Series, commands the most significant promotion around the Chase. The discount retailer is running a sweepstakes in 9,500 stores nationwide, with participation from such Nascar official partners as Unilever and Coca-Cola (KO).

Yes, the Chase is officially on, headed toward the Nascar season-ending race in Homestead, Fla., on Nov. 20. While the standing points are reset, Kyle Busch, No. 1 at the end of Nascar’s “regular” season, is the odds-on favorite to win the 2011 Sprint Cup and end Jimmie Johnson’s streak of five consecutive Cup wins, according to Nascar’s Chase Caster.

Throughout his streak, Johnson’s winning motto has been “Pace yourself during the first 26 [races], peak for the final 10.” Sports marketers involved in Nascar are heeding his call.

Nascar Cleans Up in Chicago

There’s nothing that Nascar officials love more than a clean race. Thanks to a recent regional marketing partnership, they’re now expressing that sentiment literally.

Alongside the official race this weekend, Nascar-themed car washes are also dotting the Chicago map. In honor of the 2011 Chase’s kickoff race, Nascar Car Wash Co. and Chicago-based Spotless Express and Sparkles car wash owners reached an agreement to rebrand and reflag an immediate conversion of five existing Chicago-area car washes, along with building two new car washes in the area.

Last year, Dan Dyer, chief executive officer of Nascar Car Wash Co., secured exclusive rights to use the Nascar logo to market car washes across North America and the U.S. territories. The first of several Nascar Car Wash locations opened in the Chicagoland area in Romeoville, Ill., on Thursday, Sept. 15, attended by two Sprint Cup drivers. Nascar Car Washes have also opened in Aurora and Matteson; Joliet and Naperville locations will open in early 2012, with the groundbreaking for Joliet taking place this week.

Office Depot Puts Female Business Owners in the Driver’s Seat

At the Nascar Sprint Cup race in Atlanta on Sept. 4, Kacy Howard’s pet care business was promoted on Tony Stewart’s No. 14 Office Depot car. Simultaneously, Sara Mortensen’s mold service business was emblazoned on Greg Biffle’s No. 16 3M car. It’s all part of the Office Depot Official Small Business of Nascar program, which is just one example of how Office Depot (ODP) leverages its partnership with Nascar to help small business owners take care of business.

As the two finalists in the Office Depot contest, Howard and Mortensen each won a $10,000 small business makeover and a chance to win $1 million, eventually claimed by Howard. Howard also secured the right to use the Nascar bar mark and Official Small Business of Nascar logo for one year and is now able to leverage the marketing power of Nascar, and its millions of brand-loyal fans, to give a jolt to her small pet-centric company.

Promotional Handoff to Drivers and Tracks

This year marks the first time Nascar’s Chase for the Sprint Cup has kicked off anywhere but the East Coast, and after seven years of taking all its qualifying Chase drivers to New York for a media blitz, Nascar is shifting its promotional strategy to those markets where the drivers will actually race.

Nascar will spread the 12 drivers who qualified for this year’s Chase—including superstars Jimmie Johnson, Jeff Gordon, and Dale Earnhardt Jr.—across a dozen markets. Each of the 10 tracks hosting a Chase race will also have a driver make an appearance during the next two weeks.

According to Nascar, each race market can independently decide how it wants to use the driver it’s assigned. For example, it stated, since Texas Motor Speedway is focused on raising awareness of its races among a younger demographic, that track plans to host a pep rally for defending Sprint Cup champion Johnson at a high school in Roanoke, Tex., just down the road.

The change is one of the first visible adjustments in the sanctioning body’s public-relations strategy since it overhauled its communications division earlier this year, and Nascar’s top brass are hopeful that by having the drivers appear at the 10 host tracks, they will drive local ticket sales and boost TV ratings.

“Everyone who’s heard about this has said, ‘Boy, that makes a lot of sense,’ ” Nascar Chief Marketing Officer Steve Phelps told the SportsBusiness Journal. “It should give us great coverage and visibility as we enter the playoffs. We think this will get buzz on both a local level in those markets but also nationally.”

That doesn’t mean, of course, that individual drivers are shying away from promotional opportunities of their own. Chase qualifier Gordon added a new sponsor at last Saturday night’s Sprint Cup Series Wonderful Pistachios 400 at Richmond International Raceway. Fittingly, Chase Card Services added its AARP Visa Card/Chase logo to the hood of his No. 24 Chevrolet, and the bank will do the same at the AAA 400 at Dover International Speedway later this month. Since contracting with Gordon, the AARP Foundation has reportedly raised more than $12 million toward its Drive to End Hunger campaign, a number which looks to increase dramatically since Chase has now agreed to donate $1 for each new account opened through 2012, with a cap of $2 million per year. (Gutsy driver Gordon, now north of 40, is clearly not timid about his new alliance with the association of retired persons.)

In another effort to raise the Chase for the Sprint Cup’s profile and boost both attendance and ratings, Nascar is distributing more of its marketing funds directly to tracks to use at their discretion, and increasing the amount of at-track branding. Nascar is supporting the individual tracks’ promotions with a national media campaign developed by St. Louis-based ad agency Jump Co. The nationwide campaign features the tag line “This Is Why We Drive,” using images of past Nascar champions.

Just as with the Nascar-sanctioned driver promotions, each of the 10 Chase tracks is using Nascar’s marketing dollars differently. The racetrack in Charlotte plans to use the money for Chase-branded billboards around the area, for example, while Chicagoland Speedway executives created Chase-branded wraps for double-decker buses traversing the Greater Chicago region.

“Instead of doing our own individual things around Chase week, we’ve really combined our efforts, and that’s the way it’s supposed to work,” said Chicagoland Speedway President Scott Paddock. “It will give [our race] the big-event look and feel it deserves.”

Rick_horrow
Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

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Companies Mentioned

  • DEO
    (Diageo PLC)
    • $119.21 USD
    • -1.88
    • -1.58%
  • DG
    (Dollar General Corp)
    • $63.1 USD
    • 0.10
    • 0.16%
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