By Virginia DeMoss
Racing is far from a passive sport, yet that’s the way many teams continue to present themselves to potential sponsors, according to the experts who spend their working lives in the heady, high-powered world of motorsports marketing, bringing companies with cash and products to sell together with race teams, tracks, and series.
“A lot of drivers think a sponsorship is putting a logo on your car, and it’s far more than that,” said George Elliott of Elliott Marketing Group, Matthews, North Carolina, which handles racing programs and promotions for large companies like Nestle. “The biggest problem I have when I work with a new driver is that they don’t have an understanding of their role in helping a sponsor. If he is spending, say, a million dollars, what is he going to get for that million dollars? He doesn’t need a car going around in circles.”
The key to successful sponsorships, or what might more appropriately be called partnerships these days, is “activation,” according to Brian Lillie at eCreative Group, Independence, Iowa, whose full-service marketing agency focuses on “activating” fans at grassroots tracks around the country. He is also CEO of Three Wide Media, which owns the racing magazines Dirt Late Model, Flat Out, and Dirt Modified.
Lillie, who has frequently given seminars to dirt track racers, agreed with Elliott: “The biggest thing I would tell teams looking for sponsorship is to stay away from trying to sell a logo going around in circles on a race car. That’s what everybody is trying to sell: ‘Where do you want to be on my car, and this many people will see it?’ I guess I would call the logo on the car passive marketing: You just put it out there and hope it works. You could sponsor Dale Earnhardt Jr., but unless you activate around it, it’s not going to work.”
As Lillie described it, “Activation marketing is the art of interacting and directly connecting with a fan or consumer. You’re trying to do something to create a reaction from them. It can be as simple as couponing, where you’re actually putting something into their hands. There are a thousand different things you can do with activation...it’s just getting them to interact with you and making a direct connect.”
Dodge is one of eCreative’s clients, and the agency is working with Dodge dealers around the country to produce interactive events at dirt tracks. “We activate the fans by setting them up with test drives on the track, prize giveaways, and things like that. It’s a direct connect where we’re actually trying to touch people, get their information, let them touch the product and learn about it in a fun atmosphere.”
When we spoke, Lillie had just returned from a very successful weekend event at a small speedway with about 1000 fans in attendance. “We did it with the local Dodge dealer and we gave 100 test drives on the track after the races,” he said. “It was just phenomenal.”
In Lillie’s opinion, “Teams should be looking for advertisers rather than sponsors. Sponsors shouldn’t expect much, and advertisers expect returns, and that’s one of the things that a lot of the local teams don’t realize. They may know it, but I think they just don’t know what they need to do to give an actual return on investment.”
Fortunately, there is plenty of help out there. As the racing market has grown in size and sophistication, the number of specialized motorsports marketing agencies and logistics services has kept pace. Big or small, your team, track, series, or racing business can realize its full potential with the guidance of a good agency. To that end, we took a closer look at some of the most popular players in this arena and also elicited their advice for those seeking successful long-term financial partnerships.
Bringing In Big Brands
In its 30th year in business, Atlanta, Georgia-based Championship Group specializes in providing sponsorship development and consulting directly to large corporations. The company works in the full gamut of sports, from stick and ball to the Olympics. Just a few of the companies Championship has brought into racing are Unilever, M&M Mars, Hershey, Georgia-Pacific, and Sue Bee Honey. It has also worked with major race tracks, teams, and series such as IRL.
“We work as a strategic marketing resource directly on the client side to determine what type of sponsorship program is the correct fit,” explained Ardy Arani. “What are the business objectives of the program? What are the budget parameters? What are the timing and geographic parameters? Based on that, and depending on a lot of different factors, we make the appropriate recommendation, act to negotiate and secure rights, manage programs, and enable the client to analyze and ultimately justify his decision in quantifiable marketing terms. The program is measured against the objectives going in, to determine how it’s succeeding and what, if any, changes or expansion may be required going forward.”
With the huge array of sports venues open to sponsors, we asked Arani why a corporation might choose racing over all the rest.
“When a CEO asks why he should consider a racing sponsorship, I say, ‘The answer to that is not because you like it or someone on your board likes it. The reason to look at it is because the people you do business with, whether it’s the consumer or a trade partner, are interested in it. That’s really where you look for the interest level. We’re not there to talk about his personal passion; we’re there to talk in extremely specific marketing terminology about why these types of programs work. And racing, as a whole, offers a lot of flexibility that many other sports don’t.
“For example, let’s say I want to have a big star quarterback endorse my product,” Arani continued. “That type of program does not get me any access to that quarterback during the event that he’s competing in; it does not give me a platform to advertise on that person’s uniform or do anything in the stadiums, and so on. Racing is very much an open door, where a company can come in and very seamlessly put together programs that involve exposure, branding, access to an athlete, access to a venue. Racing remains unmatched in its ability to provide a very multi-faceted sponsorship platform that you don’t see in the stick and ball arena, and I think that’s why a lot of companies continue to use it.”
Owing to the economy, Arani has seen the sponsorship landscape in motorsports change over the past few years, leading to a growing trend at all levels of the industry. “We started years ago doing programs with major teams where we would bring in companies as partial sponsors,” he said. “Now you’re seeing that model really becoming the norm, where companies will carve up their primary sponsorship, so they have two or three of them rotating over the course of a season. While motorsports is still appealing for sponsors, I think the concept of one company coming in and completely underwriting the budget for a team is not as robust as it once was. It takes a lot more creativity these days to put these types of programs together.”
Octagon, located in the Charlotte, North Carolina, suburb of Huntersville, represents sponsors’ interests in the full gamut of professional and high-profile amateur sports. The company has 60 offices worldwide, 1000 employees, and specialists in virtually every sport. About 90 percent of its Charlotte business is motorsports related.
Octagon’s biggest client in motorsports is Sprint. “When it was Nextel, we helped them broker the deal with NASCAR,” noted Mark Coughlin. “We continue to represent Sprint/Nextel in everything they do, on and off the race track, not only with their NASCAR program, but all of their other sports,” he said, adding that other clients include Bank of America, Home Depot, and AllState.
Because the company has expertise in many sports, “We try to be property or sport agnostic,” said Coughlin. “We talk to the brand management team and the senior management of the company to try to find out what they’re trying to achieve by being involved in any form of sports or entertainment, and then try to pair them up with the right sport. Some people want brand exposure, and for others who already have very high levels of brand awareness, it may be more about trying to win the loyalty of the fan base. We help companies understand why fans are fans of any particular sport, and create brand equity by showing that same kind of passion and emotion for the things that drew those fans to the sport in the first place. The one constant is that we push clients to put a stake in the ground and determine what success looks like, what they’re trying to achieve out of it, and set up a measuring system so we understand what works and what doesn’t work when we’re working on activation programs.”
Speaking of the appeal to sponsors of NASCAR racing in particular, Coughlin pointed to the long season, the positive attributes of the fan base, and the series’ “national footprint” compared to other sports platforms. “The New York Yankees might be the most popular baseball team in the world, but the majority of their fan base is in and around the Tri-State area. NASCAR, while it still has a very strong hold in the Southeast, also has a good following nationally, and some pretty fervent pockets in certain areas of the country, as well.”
Coughlin, who ran Valvoline’s racing program for 11 years, had some advice for all racers, including those in grassroots series.
“No matter what kind of company you’re approaching, you’ve got to think concretely about how they can definitively improve their business situation by becoming involved with you, whether you’re willing to put your car out in front of their business in order to create some foot traffic into the store, or you can help them build relationships. In the motor oil space, I used to ask people, ‘Who is your main sponsor? Do they have a fleet of vehicles? And what kind of lubricants are they using in those vehicles?’ You have to think about who you are making your approach to, and see if you can connect the dots with the people you have existing relationships with, because everybody’s always interested in relationship building and new business generation. At the end of the day, that’s what it’s all about.”
Show Me the Money
Just Marketing International, Zionsville, Indiana, also serves the corporate side of the sport, with 150 employees in five countries. “Our clients are the LGs, the UPSes, the Johnny Walkers,” said Zak Brown. “We put together their sponsorship programs and help them manage them, run their hospitality, the show cars, the promotions, the strategic consulting.”
Big agencies are attracting major investment into motorsports, prompting Brown to say, “With the amount of money at stake, and how complicated the sport can be, people need expert consultation to help make sure they spend their money right and get out of it what they planned on. All of that sponsorship money has driven the need for expert agencies to help companies operate within the sport.”
On the flip side, he said many teams could really use professional help in managing their sponsorships. “They’re not usually set up to manage sponsors and come up with ideas and campaigns to service them,” he said.
But he had some sage advice for getting and, more importantly, keeping sponsors. “Just be very focused,” he suggested. “I get a lot of solicitations from racing teams where it’s clear that they haven’t done enough homework, or they wouldn’t have proposed certain things that clearly aren’t fits or that don’t make sense. First and foremost, is finding out what the company needs and trying to build a solution to that, which is not always easy.
“It’s really all about sponsor satisfaction and whether they’re achieving their goals,” continued Brown. “It’s important that you understand what they’re trying to get out of a sponsorship and work very hard to deliver against those specific objectives. Usually, it ties back to increased sales, and companies are much more sophisticated in measuring the impact of promotions on sales. But they also put value on business-to-business opportunities, where they might be able to conduct business at the track, or make introductions at the track that shorten the sales cycle. A sponsor might have half a dozen goals they’re trying to accomplish through racing.”
Brown also advised that it’s important “to chase a lot of people. You get a lot of no’s to get one yes. And you’ve got to make sure that you’re pretty buttoned-up, because sponsors get so many presentations sent to them. You’ve kind of got 10 seconds to grab their attention, so you’ve got to make sure that it’s about them and not about you. Just as an example, ‘Look how many trophies I won last year is not what’s going to get someone at LG excited; what’s going to get them excited is something they open that tells them immediately how you’re going to help them sell a lot of flat-screen TVs.”
Elliott agreed that it’s about helping the sponsor achieve an ROI (return on investment), and suggested that the driver’s role may even entail such things as courses in public speaking. “They need to learn how to represent their sponsorship effectively; they need to understand what their sponsors promote and sell, and they’ve got to believe in it. A lot of young drivers don’t understand that; they just think, ‘Well, gee, this guy would want to sponsor me because I’ve won a few races. They think they’re owed the sponsorship, and it’s really vice versa: the sponsor is owed a performance. They’re investing in you because they expect a return on that investment. If you give them a return, they’ll stick with you. If they don’t, it’s a sign that you’re not working for the sponsor.”
Speaking of the appeal of the racing market to sponsors, Elliott said, “We’re talking a fan base of over one-third of the adult population of the United States. And the amazing thing about race fans is that it doesn’t matter what their household income is, they’re going to buy the brand name products that sponsor and support their favorite sport.”
Offering 25 years of action and motorsports experience, expertise and an understanding of power sports and its customers, Performance Branding, under the umbrella of the Haro Design Group in Cardiff, California, has worked with many well-known brands in the power sports and motorsports world, noted Bob Haro.
“Brands like International Speedway Corporation, Richard Childress Racing, Michael Waltrip Racing, Ducati Motor Holdings, Yamaha Motor Corporation, Mazda Raceway Laguna Seca and AMA Pro Racing, just to name a few, have come to trust us for how we think and what we deliver to their brands,” he added.
Performance Branding is a boutique design, marketing and branding agency, dedicated to designing and delivering high-quality work that builds the brand and moves the business forward. “We listen to our customers’ needs and business challenges in order to build a smart and effective marketing or branding solution that not only fits those objectives, but also meets their budget requirements,” Haro explained.
For race teams looking for sponsorship, Haro suggested having a professional marketing package in both a hard copy and a digital email-ready format that is clear and concise in its image and message so that the person you are pitching understands what you have to offer them quickly and easily without having to explain every detail. “These marketing tools are typically talking pieces that you can use to catch a potential sponsor’s interest and use when you have a face-to-face meeting to expand on the presented concepts in more detail,” he noted.
Once a deal has been inked, Haro advises to constantly update and continue to market your driver’s or team’s progress and achievements so that sponsors know the value that you are bringing to them. “Provide a quarterly newsletter or monthly press updates on the team or drivers’ efforts and achievements, showing press received in magazines, online or on TV,” Haro added. “Absolutely have a website and update the content and keep it fresh and interesting. You must constantly build value for the racing service that you are providing sponsors and for the sponsorship dollars they are spending with you.”
For even more advice about how to get the most from sponsorship dollars, please visit the Performance Racing Industry website next month for part two of this article.