CorpComms Magazine

The thrill of speed, the scent of petrol, a whiff of beer and a raucous crowd. America's stock car racing circuit, Nascar, offers a simple, traditional formula from coast to coast and every week tens of thousands of fans flock to see the dusty spectacle.

The annual season opener in February at Daytona Beach, Florida attracts 200,000 hot dog-clutching aficionados to the circuit's sprawling complex of 480 acres with simulators, snack bars, gaming centres and pit stops. And, while there appears little obvious glamour about the activity, Nascar has become one of the biggest business successes in modern sport. In body-hugging, flame-retardant suits, Nascar drivers are covered from head to foot in sponsorship names. Their cars are also bedecked with slogans and logos to a degree unmatched by any other American sport. Yet, rather than complaining about the commercialisation of their sport, Nascar's fans lap up the association with brands and view sponsors as the engine behind their favourite drivers' successes - a remarkable 78 percent of fans agree that without corporate sponsors, there would be no Nascar.

Primary sponsorship of a Nascar team typically costs an eye-watering $10 mn to $20 mn (£5 mn to £10 mn) per season, which includes huge logos on the car bonnets and boots. Mere secondary sponsorship, with far less prominent spots, costs between $500,000 and $1 mn.

Audience scope

'Having that primary sponsorship on the car has been referred to as having a 200 mph billboard going round the US,' says Larry DeGaris, a professor of sports marketing at the University of Indianapolis. 'The fans know who the sponsors are, and what Nascar's famous for is the fans' loyalty to those sponsors - that's what's different from other sports.'

Through a series of studies, DeGaris has become known as a guru on Nascar sponsorship. He reckons the payback on Nascar deals is phenomenal, with name recognition sky-high. Among Nascar fans, 96 percent were able to identify Budweiser as the sponsor of top driver Dale Earnhardt. Unaided sponsorship awareness is 36 percent for the top 30 drivers, with nine drivers' sponsors topping 50 percent.

There is strong evidence that fans' shopping habits are influenced, too. Some 48 percent of fans, including 59 percent of self-described big fans, say they have bought a product specifically because of its association with Nascar. 'There's a culture of appreciating sponsorship,' says DeGaris. 'It's not just mandated by contract - there's a sincere appreciation on the part of Nascar, the race teams, the drivers and the fans.' Well might they be grateful. The crucial role of sponsors became clear three years ago when team number 09 found that its primary backer, Miccosukee Gaming & Resorts, lacked national clout. The Florida casino company decided that races as far afield as California and Michigan weren't going to attract gamblers to its resort in Miami - so it opted not to pay for involvement in those races. The team had to withdraw from the meets, ultimately eliminating its chances of success on the annual circuit.

'What Nascar has done is educate people in the economics of modern sports,' explains DeGaris. 'The majority of revenue comes from the corporate world. If you took beer money out of sport, what would you have left?' Such market-friendly thinking is in stark contrast to views elsewhere in the sporting world. In the UK, fans tend to view corporate partners with disdain. The former Manchester United captain Roy Keane once derisively suggested that the occupants of Old Trafford's corporate boxes were only interested in the prawn sandwiches they were served. New shirt sponsorship deals routinely irritate UK football fans, who see them as an excuse used by clubs to change their kit, necessitating a hefty outlay at the club shop for loyal supporters. In the US, top sports such as baseball and American Football do not have shirt sponsorship at all. Indeed, a row recently erupted when the Major League Baseball authorities agreed a movie tie-in which involved putting Spiderman logos on each base at big matches. The idea was dropped after an outcry by fans, who saw it as a sponsorship too far.

Andrew Giangola, Nascar's director of business communications, says sponsorship needs to be carefully modulated to keep it in fans' interests. The racing organisation has a 40-strong team in New York overseeing its marketing efforts; the team routinely helps weaker teams arrange tie-ups.

'Without a strong field, you won't have that level of competitiveness that people want,' says Giangola. 'It all comes down to the product - if you get close, competitive races, it fills the stands and gets people watching on television.'

Family business

That philosophy goes back to the origins of Nascar, founded in 1948 by a Florida entrepreneur, Bill France. He organised a meeting of stock car drivers at Daytona Beach's Streamline Hotel to try to inject some professionalism into the sport. France handed control to his son, Bill junior, in 1971, and the sport remains a family business; grandson Brian France is now chairman and chief executive. 'Sponsorship has always been important to our sport, but it's certainly grown in recent years as the stakes have got higher and the sport's become more expensive,' notes Giangola.

Early associations tended to be local service stations backing home-townplayed a bigger role but, from the 1970s onwards, household brands began to exert influence. For example, Winston cigarettes was the sport's main sponsor from 1971 to 2003. Giangola views the decision by Proctor & Gamble to attach its Tide detergent brand to the sport as a landmark in the sport's history. He also sees it as a sign that Nascar is deemed to have a female fan base - it's not an exclusively male preserve. Nor is it exclusive to any part of the US. 'The sport was born and bred in the south but today, Nascar races in all corners of the country,' notes Giangola. Some 75 mn Americans - one in every four adults - say they are followers. And long-term loyalty is commonplace: one study found that the average Nascar fan had been following the sport for over 18 years.

No poor relation

Giangola says the sport's traditional blue-collar image is becoming outdated. 'With that many fans, it's difficult to label them in a snapshot way,' he notes. 'Our research suggests the average Nascar fan is wealthier than the average American.' The roll-call of names associated with the sport bears this out: Home Depot, UPS, Sony, DirecTV, the heartburn drug Prilosec and even the jet manufacturer Gulfstream all have Nascar tie-ups. Such is their commercial verve that some drivers have become a little over-excited. When the so-called Columbus Comet, Tony Stewart, won Nascar's Pepsi 400 race in Florida last year he jumped out of his car and bellowed to his television audience that his own sponsor, Coca-Cola, tasted 'a hell of a lot better' than the race sponsor. Pepsi, which had shelled out big bucks to be involved, was not pleased. Some motor sports expvav erts look down on Nascar, pointing out that almost all of its tracks are simple ovals, without the chicanes and twists familiar to Formula One viewers. One critic describes it as 'taxis turning left for 500 miles.'

But in the US' $8.9 bn annual sports sponsorship industry, Nascar has claimed one of the pole positions. The sponsorship industry is vast - Forbes magazine calculates that America's 50 top athletes earned $1.1 bn in 2004, of which 40 percent came from endorsements and sponsorship. Typical deals go well beyond wearing a logo. There are public appearances, photo opportunities and even bonuses for mentioning products in television interviews.

DeGaris maintains that Nascar is the best buy in marketing. 'It has raised the bar on delivering an audience,' he says. 'Nascar's made some very shrewd marketing decisions to try to grow its franchise - and they've paid off.'

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