Fans’ brand loyalty attracts wide range of sponsors

by Rod Belcher
for Virginia Business
October 2006

NASCAR casts a long economic shadow, not only for the cities that host races, but also for the sport’s sponsors. “No other sport provides you with this kind of platform,” says Dean Kessel, director of marketing for the NASCAR Nextel Cup Series. Kessel’s company, Reston-based Sprint Nextel Inc., replaced Winston cigarettes as the series sponsor in 2004.

“ If you sponsor another type of sports team, like a football or baseball team, you get a certain amount of exposure up until the start of the game,” Kessel says. “But no other sport besides NASCAR provides a sponsor with the kind of advertising equity you get in racing.”

In addition to having their logos on the cars, NASCAR advertisers get continuous exposure, because they’re actually a part of the event and not just on the sidelines. NASCAR now has 17 of the nation’s top 20 attended sports events. In addition, a television audience of about 5.5 million people watch the races an average of four hours each weekend during the 36-race season.

Primary sponsorship of a NASCAR vehicle, which provides a prominent location for the company’s brand on the hood or door panels of the car, costs $16 million to $20 million a season. Some associate sponsors pay $500,000 to $1 million for secondary spots on a race car, such as the rear panels or the rear bumper.

With the bankable loyalty of the NASCAR fans, many companies see that kind of advertising as money well spent. “These guys know what they are doing,” says Matt Becherer, director of marketing and sales for Richmond International Raceway. “NASCAR fans have more brand loyalty than any other group of fans. They will consciously seek out branded products that they see at NASCAR events 73 percent of the time.” That percentage comes from a telephone survey of NASCAR fans by Ipso Facto, a media analysis company.

Because of that buyer loyalty, more Fortune 500 companies participate in NASCAR as sponsors and advertisers than in any other sport. Whereas once NASCAR was sponsored primarily by auto-related industries, such as car manufactures, tool and auto-part companies; today, the sport’s appeal has widened to all types of consumer products — from Viagra to Tide detergent to Pamprin, a menstrual pain reliever. “First and foremost, it has been a huge success,” says Dan Sanborn, senior director of corporate relations for Diageo PLC, the London-based parent company for Crown Royal whiskey. “NASCAR is one of the few sports where the fans truly embrace the sponsors and are loyal to the products.”

Diageo became involved in NASCAR in 2003 with its associate sponsorship of a car. The Crown Royal brand became a primary sponsor for the 2005 season. This season Diageo took over primary sponsorship of the car driven by Jamie McMurray.

Crown Royal owns the primary paint scheme for 18 races this season, with Smirnoff Ice owning three. “We have, in fact, seen some positive growth since announcing our sponsorship,” Sanborn says. “We hope to continue that momentum this year and beyond. Our NASCAR sponsorship is an important vehicle for our collective business.”

The downside of the rising cost of sponsorships is that some former sponsors have been left in the dust. “Back in the ’90s the Virginia Tourism Corporation had ‘Virginia is for Lovers’ with our 1-800 number on a car,” says Jack Berry, president and CEO of the Richmond Metropolitan Convention and Visitors Bureau. “I wish we could still afford to do it.”

Gender:
• 60 percent are men.
• 40 percent are women.
Age:
• 34 percent are between the ages of 18 and 34.
• 54 percent are between the ages of 18 and 44.
Income:
• 46 percent earn $30,000 to $70,000 a year.
• 41 percent earn more than $50,000 a year.
Children:
• 37 percent have children under the age of 18.