Saturday, January 28, 2012

Sponsorship despite the tough times

Matt Kenseth with his new Best Buy No. 17 Ford.
Credit: Best Buy Racing
Despite the harsh economic climate felt throughout the NASCAR garage, teams are still managing to secure sponsorships for the upcoming season. Gone are the days where a driver would have just one primary sponsor; now it seems that most teams split sponsorship among 2-3 sponsors for the season. 

Levels of sponsorship
The cost of sponsorship is staggering, from best internet estimates primary sponsorship can range between $10 and $20 million dollars for a single season. Primary sponsorship is a badge of honor for any company, with logos on the entire hood and quarter panels, the signage below the quarter panels, most of the two posts, the equipment, the uniforms, as well as the color scheme of the car and team uniforms.

Office Depot, primary sponsor of Tony Stewart’s No. 14 Chevrolet, just had their driver win the 2011 Sprint Cup, which is a huge marketing tool for their company. Stewart represents Office Depot and has been used in their promotions. As a result of winning, their business will now utilize his championship in additional marketing campaigns. In the end, the millions spent on sponsorship will return to Office Depot through their association with Stewart.  

Since primary sponsorship is often unaffordable to many companies, associate sponsorship is the way to go for most. With associate sponsorship, businesses receive a logo on either of the lower rear quarter panels, the rear deck lid, or one post.

UPS, a company that's provided primary sponsorship for Roush Fenway Racing since 2009, has scaled their racing package back to associate level. As an associate sponsor of Carl Edwards' No. 99 Ford, UPS will continue as the official logistics partner of NASCAR, as well as host customer and employee hospitality at races. They will also serve as a primary sponsor of Edwards at Kentucky Speedway.

Flourishing in the rough times
Stewart-Haas Racing has been one team that has been able to flourish in the sponsorship area. Bringing in many new sponsors such as Quicken Loans and Outback Steakhouse, Tony Stewart’s team has found the secret to secure the “golden ticket” of prized sponsorships in the rough times.

Hardships for the "mega" teams
While Stewart’s team is reveling and making it appear like taking candy from a baby, teams like Roush Fenway Racing and Joe Gibb Racing have seen their share of struggles in securing sponsor support.

Roush Fenway Racing has downsized to 3 cars due to lack of sponsorship for their 4th car; their Nationwide Series program is currently seeking sponsorship for Trevor Bayne and will only run him for half of the season at this point. Even Matt Kenseth is not immune to sponsorship problems. He is the 2003 champion, yet Roush still struggles to find the needed sponsorship. Kenseth did acquire Best Buy Racing and will also have Valvoline on board, but whether or not the No. 17 has an entire season of sponsors lined up, the RFR organization will race Kenseth the entire season.

Joe Gibbs Racing’s problems are not as severe. Primary sponsor of Joey Logano’s No. 20 car, Home Depot, has cut back their package to the team. Dollar General has stepped up and will now play a bigger role in the JGR organization.

Small teams managing
With the hardships that the “mega” teams face, the hardships are felt even more keenly for the small teams like Tommy Baldwin Racing, Front Row Motorsports and NEMCO Motorsports. In a world where dollars are spent to advertise your brand, companies are more willing to take a ride with Tony Stewart than Joe Nemechek. Their investment will give them more TV time, thus resulting in more potential consumers seeing their brand. Should it be that way? No! Joe Nemechek, David Ragan (Front Row Motorsports) and Dave Blaney (Tommy Baldwin Racing) deserve just as many sponsors as Tony Stewart. Sponsorship is what keeps a car running. 

Tires, engines, chassis, crew members – NASCAR is not a cheap sport in which to compete. For those teams who do try and succeed, that is a huge feather in their cap.

For sponsors, or those thinking about becoming sponsors, consider the fans! Fans are loyal to their brands. Yes, fans will buy only NASCAR-affiliated sponsors. You, too, could be one of those brands we choose to support and NASCAR has a wide reach. Just think, in 2011 there were 17 different winners in 36 races, not just two or three. Take the leap. It will reward you in the end. As your driver stands in victory lane saying “Man, I owe this to _____ for their support,” think of that moment. That could be your company name. 

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