NASCAR’s sponsor revenue expected to dip
NASCAR’s sponsor revenue expected to dipPublished December 3, 2012
NASCAR’s total sponsorship revenue is expected to drop slightly in 2013 as marketers continue to tighten their budgets and some sponsors depart the sport.
The sanctioning body had 13 sponsors up for renewal in 2012 and cemented extensions with seven of them: Sprint, Goodyear, MillerCoors, COPD, Featherlite, Chevrolet and Ford. It is still in discussions with Mobil 1, Procter & Gamble, DirecTV and USG, the official building products provider. Two sponsors, Office Depot and Dodge, decided to end their partnerships after the 2012 season.
|Top series naming-rights sponsor Sprint is among seven partners who have renewed.
But those deals weren’t enough to increase NASCAR’s total sponsorship revenue going into next year. It will be down by a single-digit percentage for the second consecutive year.
“I wouldn’t attribute it to a single sponsorship” said Jim O’Connell, NASCAR’s chief sales officer. “It’s a reflection of the fact that marketing budgets are a lot tighter.”
O’Connell said that in some cases NASCAR decreased the cost of a sponsorship in exchange for an increase in activation across the sport or against one of the sport’s key marketing initiatives and components of its five-year industry action plan, designed to bolster youth and multicultural interest.
“We want to hold to a rate card where we can, but support of our industry action plan is very important,” O’Connell said.
MillerCoors was one brand that committed to supporting those initiatives during its negotiations with NASCAR. The company last February announced a five-year extension with NASCAR that will see the Coors Light brand remain the sport’s official beer.
“We’re in this for the long term,” said Adam Dettman, director of sports and entertainment marketing for MillerCoors. “We want them to be successful, as well. Youth appeal and multicultural is important. It’s one of those things we’re all going to have to work collectively on.”
In addition to enlisting sponsors who will support its industry-action initiatives, NASCAR has focused on expanding its portfolio of green partners and increasing the number of sponsors that are part of its NASCAR Green program. The sponsors get rights to a NASCAR Green logo and can use their relationship with the program to promote their environmentally friendly initiatives.
O’Connell said the new platform has helped boost the sport’s bottom line at a time when traditional categories such as airline and hotel sponsorships remain difficult to sell.
“We have a really good story on the green side,” O’Connell said. “It all started with Growth Energy. That set the stage for us, and we’ve been able to attract sponsors who are comfortable showcasing their products and technology in the sport.”
NASCAR this year also signed a value-in-kind deal with HP. The technology company is providing the infrastructure for the sanctioning body’s new media engagement center, which will monitor, interact with and respond to social and traditional media.
O’Connell said the deal doesn’t preclude NASCAR from going after other technology companies and added that the sanctioning body remains focused on filling the technology category. “With green, we started with a bang,” O’Connell said. “Technology will be a slow build.”
Next year will be a light year for renewals, with only Toyota and Safety-Kleen up for renewal. New categories NASCAR hopes to fill include consumer electronics, quick-service restaurant, spirits and office supplies.