SBJ/October 16 - 22, 2006/This Weeks News

Nontraditional NASCAR

Turner Broadcasting is trying to convince advertisers that its schedule of six NASCAR races is more valuable without traditional 30-second ads.

TNT, which will begin an eight-year, $640 million rights deal next year with the stock-car circuit, is floating a package to potential advertisers that would eliminate ad “pods” during its race coverage in favor of a framing device that would allow for messages — including full-motion video and audio — mostly along the bottom of the screen.

Neither Turner nor NASCAR would comment officially for the story. However numerous media, advertising and sports marketing agencies have seen the package.

Ad buyers predicted that Turner’s rate of about $80,000 per 30-second spot would stay flat from last year, when it had a 50-50 revenue share with NBC. But this new concept is being viewed as a way for Turner to create some buzz around the network’s six-race mid-summer schedule. In the last several years, TNT’s NASCAR ratings have been the lowest of any network, and they have dropped 8.3 percent from last year (see chart).

So far, many are more impressed with the concept than with this specific effort.

NASCAR ratings on TNT
Ratings for the eight Nextel Cup races that aired on TNT this season were down 8.3 percent from last year, but are up nearly 16 percent from 2001, the network’s first season as a NASCAR rights holder. The number of Cup series races broadcast by TNT in each season are shown in parentheses.
3.8 (9)
4.6 (8)
4.3 (7)
4.4 (8)
4.8 (7)
4.4 (8)
Source: Nielsen Media Research

“We’ve met with media buyers and advertisers on this and we all thought, ‘cool concept, neat idea, but expensive,’” said Mark Coughlin, executive vice president and COO of Octagon Racing, whose NASCAR clients include Sprint Nextel, Allstate and Home Depot. “It’s great experimentation, but they are going to have to experiment on pricing to attract buyers.”

TNT insiders are describing the talks as preliminary, with the network looking for 10 to 12 advertisers to make its schedule ad-free. Pricing information was sketchy, but TNT is definitely looking for a premium. As such, the move is a bit of a referendum on branded content at a time when that concept is one of the marketing industry’s hot buttons. But even while the value of the 30-second spot is a constant topic of debate, there is no unanimity of opinion that ads within a race are more valuable than traditional spots.

“If they are done the right way they could have enormous value,” said Larry Novenstern, executive vice president and director of national electronic media at Optimedia International, “but I would also argue that unless I’m getting the full screen and full attention of consumers that advertising is less valuable than a regular spot.”

Added Zak Brown, president of motorsports marketing agency Just Marketing International, “I don’t see how they could charge a premium. I’d give them thumbs up for exploring new territory, but I would not call it a sure bet.”

Other questions raised were the specter of possible viewer backlash, the value of adding clutter to sports’ most cluttered commercial environment, and the reaction of car sponsors, who might feel that the value of their on-track branding would be reduced by in-race advertisements.

“Sponsors will wonder if the race broadcast itself is watered down, and it’s a valid question,” said Ryan Kurek, president of Leverage Sports Agency’s Charlotte office, whose NASCAR clients include GE and World Financial Group.

ABC and ESPN also have experimented with
ways to show ads during racing coverage.
If TNT is able to sell the package, it would be the first time NASCAR has gone commercial free on TV. Last year, ESPN and ABC began a feature during its IndyCar Series using what it described as “side-by-side,” where it would air all commercial breaks on a split screen with race coverage on the other half. ESPN did not use the split screen for the Indianapolis 500 and is not permitted to use it for its NASCAR coverage next year. A NASCAR official has previously been quoted as saying the racing series believes the split screen serves neither the viewer nor advertiser.

Similarly, Fox says it will have commercial breaks during races. “Our experience with advertisers is that this is not something they covet,” said a Fox source.

TNT’s NASCAR schedule for 2007 consists of a half dozen races from the June 10 Pocono 500 to the USG Sheetrock 500 on July 15. The July 7 Pepsi 400 at Daytona is the most important race in the TNT package; so this is an attempt by Turner to generate some excitement and differentiation to its relatively lackluster midsummer racing schedule.

“It is a way for TNT to get some attention for its package in the middle of a season,” said a media buyer familiar with the package. “Advertisers need to be in the Daytona 500 at the beginning of the season and they need to be in at the end of the season for the Chase.”

Major sports advertisers also have broader ongoing relationships with sports-heavy Fox, and with ESPN, which is seeking large buys to pay for its new NASCAR rights deal. Some buyers saw series title holder Sprint Nextel and newcomer Toyota as likely being pitched on the package, while others questioned the value for large advertisers. Some ad buyers have seen pitches for $120,000 per 30-second spot from Fox and ESPN.

“These are companies that spend a lot on creative and probably won’t want it on a split screen,” said Octagon’s Coughlin. “That kind of advertising [in-game] makes it much more of a branding exercise, and you can easily question whether any major companies need more brand recognition.”

Added an executive at a rival NASCAR rightsholder: “The problem is that with only six races, Turner doesn’t have any scale. This looks more like a Hail Mary pass than anything else.”

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