SBJ/January 10 - 16, 2005/Marketingsponsorship

Will Office Depot open lid on category for NASCAR?

Office Depot’s announcement last week that it will sponsor NASCAR left many marketers and teams optimistic that competitors in the office products category will follow.

Office Depot, which becomes the sport’s first official office products partner in a two-year deal with an option for a third, has been given category exclusivity in NASCAR’s Nextel Cup, Busch and Craftsman Truck series. Financial terms of the deal were not released, but industry insiders estimate the deal to be in the low seven figures annually.

Office Depot, a client of The Marketing Arm for several years, had previously done local team deals and a U.S. Olympic Committee deal. Lynn Connelly, director of strategic alliances for Office Depot, said the company dropped its USOC sponsorship and picked up the NASCAR deal because of the sport’s ability to provide both national relevance and local activation opportunities.

But marketers and teams are most interested in the fact that the company also plans to unveil a Nextel Cup team sponsorship later this month.

Jim Doyle, president of Retail Sports Marketing, which specializes in motorsports, said Office Depot competitors’ interest in NASCAR has immediately been raised by the signing of the partnership.

“I wouldn’t at all be surprised to see other people get in, because what this has done is raise the level of awareness of NASCAR in that category,” Doyle said.

Wally McCarty, director of marketing for Penske Racing, said Office Depot’s move will have a positive effect on tracks and teams.

“It might provide category exclusivity with NASCAR, but it will allow tracks and/or teams to develop relationships with that company or its competitors,” McCarty said.

The timing of the announcement, though, is tough on competitors in the office products category. With the green flag set to drop at Daytona in a little more than a month, most teams and tracks have nailed down sponsorship programs for 2005.

“It is hard to react,” McCarty said. “Plans are in place.”

Connelly said she was not sure whether competitors like OfficeMax and Staples would look to NASCAR to grow their brands anyway. Officials for OfficeMax and Staples could not be reached by press time.

“I think NASCAR is a big decision for any company,” Connelly said. “Our competitors are playing in different spaces as far as sponsorships.”

Ben Geisler, senior vice president of Atlanta-based Next Marketing, which has The GM Card and Duraflame as motorsports clients, said the deal is significant because it could spawn a change in strategy within the office products category.

“Those companies in general have always been very big supporters of local professional sports teams and their venues,” Geisler said. “The hope in [NASCAR] now is that since Office Depot has taken the leap, the others will follow.”

Office Depot is expected to produce NASCAR-themed creative in time for the Daytona 500. Two tag lines have been approved for use: “Where NASCAR Stops for Office Products” and “Taking Care of Business for NASCAR.”

While the rights garnered by Office Depot from the league do not permit the retailer to pass through NASCAR intellectual property, the broad agreement does grant Office Depot exclusivity across retailing office equipment, technology products and services, computer hardware, software, peripherals, and office furniture, along with copy and printing services, which would preclude a separate deal with a FedEx Kinko’s-type business.

Staff writer Terry Lefton contributed to this report.

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