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SBJ/Dec. 6-12, 2010/This Week's Issue
NASCAR steady on renewals, ups sponsorship revenue 10%
Published December 6, 2010
NASCAR has finalized eight of 12 renewals and added two new partners, a combination that increases its total annual sponsorship revenue by 10 percent in 2011.
The sanctioning body has renewed two-thirds of the sponsorship deals due to elapse this year, signing renewals with Toyota, GM, Dodge, Unilever and DirecTV. Three other extensions are agreed to and currently being finalized, said Jim O’Connell, NASCAR vice president of corporate marketing.
Tylenol, Tissot and Nicorette all declined to extend their agreements, and the sanctioning body is still negotiating with insurer Aflac, which has one year left on its sponsorship of Roush Fenway’s No. 99 Sprint Cup car driven by Carl Edwards.
The sanctioning body added partnerships with Drive 4COPD, a national public health campaign, and Growth Energy, an American ethanol interest group.
NASCAR’s marketing partnerships generally range from $2 million to $10 million a year. “For any property to be up 10 percent given the economy and tight corporate budgets shows there’s still a lot of value there,” O’Connell said. “We’ve done a good job of finding new categories, and that’s helped.”
NASCAR announced the Growth Energy agreement last week in Las Vegas. It is the sanctioning body’s first marketing partner in the green, environmental category, and its biggest new marketing deal since signing its Nextel/Sprint title sponsor in 2004.
NASCAR brought Growth Energy on in concert with official fuel provider Sunoco, which will provide Sunoco E15 fuel at the track. Growth Energy will be strictly a marketing partner and will use the NASCAR rights to promote American ethanol.
Team Epic, the recently formed Carat-owned agency that includes Velocity Sports & Entertainment and Vivid Marketing, will handle the account.
Unilever signed a multiyear extension for the first time in more than five years, ensuring that it will continue to use NASCAR to promote Hellman’s mayonnaise. DirecTV’s renewal ensures it will continue to provide “Hot Pass,” a service that provides an in-car view of the race from four cars.
Tylenol and Nicorette decided to exit NASCAR because of different challenges facing their respective businesses. Tylenol faced multiple product recalls last year, while Nicorette’s market share has decreased because of new competition. The two had been partners of NASCAR since 2006 and 2005, respectively.
Tissot decided to discontinue its four-year-old relationship as NASCAR’s official timekeeper in order to shift all of its motorsports marketing spending to become the primary sponsor of Danica Patrick’s Nationwide Series car, owned by Dale Earnhardt Jr.’s JR Motorsports.
“It’s a win-win,” said Sharon Buntain, Tissot’s U.S. brand president. “We get to be tied to the Earnhardt family and we’re on Danica’s car. It’s a home run.”
NASCAR has three key renewals due in 2011 with Mars, Bank of America and UPS. It already has begun negotiations with those partners and is looking to add new partnerships in the timekeeper, consumer electronics and salted snacks categories. It plans to be more aggressive in seeking additional green partnerships, too.
“The traditional categories are tougher and tougher,” O’Connell said. “We’ll need to create new opportunities to keep growing.”