NASCAR is hoping for more than just “better luck next time.”
Last week’s Daytona 500, the most prestigious race on the sport’s calendar, was plagued by setbacks. First, it was postponed due to a rain out, its first ever. Then, a large fuel fire erupted during the race. But these are mere hazards of the trade, and CEO Brian France has his sights set higher for 2013.
France, 49, wants to begin attracting blue chip technology companies to complement the usual stable of beer and automotive sponsors. That may be easier said than done in a competitive advertising environment and for a sport which is notoriously blue-collar. But France, the league’s chief executive since 2003, is convinced. “Eventually, we’re going to pull in big tech companies like HP (HPQ), Cisco (CSCO) and Apple (AAPL), which for one reason or another have eluded us always,” he says.
The league has made moves to diversify its sponsors. Its biggest perennial supporters include Office Depot (ODP), Goodyear (GT), Sprint (S), Sunoco (SUN), and MillerCoors (TAP). The sport has three types of sponsorships: team, official, and track. Brands that become team sponsors have their names on cars, such as Best Buy (BBY), sponsor of the #17 Ford (F) that 2012 Daytona winner Matt Kenseth drives. Official sponsors, such as the National Corn Growers Association, do not typically have their names on the cars but are often associated with one of NASCAR’s banner initiatives — in this case, NASCAR’s use of Ethanol-blend E15 fuel. Track sponsorships bestow naming rights to a track, a race a particular track is holding, or signage around the speedway. Though it’s rare, sponsors can serve as all three, such as Coca-Cola (KO).
It’s difficult to imagine Apple, notoriously fastidious about advertising, slapping its logo onto a race car. Apple did not respond to requests for comment. HP declined to comment as well, but has been an IndyCar sponsor for six years. It has also run sponsorship programs with the NBA and individual NHL and NFL teams. A Cisco spokesperson says, “Cisco has had, and continues to have, discussions with NASCAR about how Cisco can help them connect with their fans, using next generation technologies.” The company would not comment, however, on the type of sponsorship it has discussed with the series.
That leaves France’s prediction up for scrutiny. He acknowledges NASCAR will have to step up its game to successfully court such partners. “What I don’t want, and they don’t want either, is to just do a sponsorship deal,” he says. “For any partnership in that space, we’d want them to have a stake in something that would enhance the experience for our fans. It might be a big technology that helps pull off a major NASCAR event and makes it better.”
But sponsorships cost. A “primary” team sponsor traditionally spends an estimated $25 million in initial costs. Among sponsors, the general line about NASCAR has been that for every dollar a sponsor spends to get into the sport, it spends two more on “activation,” which covers the various marketing and retail efforts made to get visibility and return on its sponsorship investment.
The economic downturn hasn’t made such costs more appealing. “The activation part of what sponsors do was a natural place where they could tighten their belts,” says France. Team owner Roger Penske recently told The New York Times that in the current struggle for sponsorship money, a primary sponsorship today may be won for closer to $13 million.
Marketing analysts point out that while the tech partnerships France mentions would certainly make sense for NASCAR, they may not immediately appeal to such companies. “NASCAR has a relatively tech-savvy audience, and sponsors could really go after the gamer crowd among fans,” says Dan Neely of Networked Insights. “But the other guys, the HPs and the Ciscos, that’s a stretch for me. Apple is not really gaming-focused — their crowd is creative types — I just don’t see how NASCAR could make a connection there.”
Dean Crutchfield, another branding expert, points out that, “There’s a perceived down-market or blue-collar nature” to NASCAR. “It’s only natural for NASCAR to look at these giant brands that have a halo, like Apple or HP. The question is whether theses brands would think there’s a detriment to them to advertise with NASCAR.”
Tech companies may also be hesitant because NASCAR often plays second-fiddle to the ball-sports in terms of mainstream media (France calls it an “under-covered sport”), but as Steve Newmark of Roush Fenway Racing puts it, “You tell someone to think of Peyton Manning, they think of the Indianapolis Colts, not the brands he endorses. But every fan knows that Carl Edwards is associated with Aflac.”