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SBJ/June 18 - 24, 2001/This Weeks Issue
Waste hauler: NASCAR road to $100M
Published June 18, 2001
Trash removal and recycling giant Waste Management Inc. is close to signing a multiyear sponsorship with NASCAR that it hopes will lead to tens of millions of dollars in business with NASCAR affiliates.
The company, which had $12 billion in revenue last year, already provides service to many companies with NASCAR ties, but more than half of the sport's sponsors are clients of competitors.
"When you take into account NASCAR sponsors, licensees, tracks and teams we don't have [as clients], we estimate there could be as much as $100 million in business out there," said Curt Knapp, Waste Management's vice president of marketing.
Knapp said Waste Management will spend "upwards of $2 million" on NASCAR-related activity next year, including rights fees, marketing programs and deals with racetracks.
NASCAR officials said Waste Management will be required to spend money with tracks under the terms of its sponsorship, and also will be allowed to sponsor a "Special Awards" program, offering a weekly cash prize for certain achievements on the track. The company can determine the criteria for the award and has the option of limiting participation to race teams that use Waste Management's services.
"They will use NASCAR as a link," said Brett Yormark, NASCAR's vice president of corporate marketing. "NASCAR people return favors. If you're marketing at a track, people are going to be doing business with you."
Using NASCAR as an employee morale builder while putting a public face on the sponsorship, the company eventually will outfit its nearly 30,000 attendants and drivers with uniforms that display the NASCAR logo. Knapp said Waste Management has the second-largest truck fleet of any company in the United States, behind only NASCAR sponsor UPS.
Waste Management doesn't plan to make NASCAR the focus of a major consumer ad campaign as UPS and several other sponsors have, but the company does see NASCAR as an important avenue to reach consumers as well as businesses, part of an overall corporate-branding initiative.
Born out of the 1998 merger between USA Waste Services and the once-struggling Waste Management, the company with which Miami Dolphins owner Wayne Huizenga made his fortune, the new Waste Management is the No. 1 solid waste removal and recycling company in the world. But its size and rather self-explanatory brand name have not translated into widespread name recognition.
"We're probably one of the least-known Fortune 200 companies," Knapp said. "Through images and words, we want people to understand who Waste Management is."
Next year, the company will launch its first national consumer advertising campaign. The creative will not be specifically linked to NASCAR but will likely run on NASCAR programming. Waste Management also may customize a few ads for NASCAR, Knapp said, especially for print publications.
At some tracks the clean-up crews that haul away debris after accidents may be branded by Waste Management.
To assist with its NASCAR-related programs and negotiate track agreements, the company has hired Millsport as its sports marketing agency.
Knapp said Waste Management is in talks to expand the scope of existing deals with tracks owned by International Speedway Corp. and Speedway Motorsports Inc. The company already has trackside advertising at Dover Downs International Speedway in Dover, Del., along with advertising or sponsorship deals with about a dozen Major League Baseball teams and an on-ice logo at the Pepsi Center, home of the Stanley Cup champion Colorado Avalanche. Most of those deals were cut on the local level, but Knapp and Waste Management's corporate office in Houston are spearheading all future negotiations. They just signed off on an advertising and stadium hospitality deal with the Pittsburgh Steelers.
The motorsports plans also call for Waste Management to develop a NASCAR-specific slogan, one that will stress the company's positioning as a leader in recycling services. NASCAR officials stipulated that Waste Management must be positioned as an environmentally friendly company, not just someone who takes out the trash. Waste Management executives supported that idea.
"Environmental consciousness is very much a part of their culture, and we certainly felt there needed to be an appropriate reason for being [for the sponsorship]," Yormark said. "Our management met with their management and we came to a common ground."