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SBJ/September 19-25, 2011/Marketing and SponsorshipPrint All
Four years after making waves in NASCAR by signing on as the primary sponsor of Dale Earnhardt Jr., Amp Energy is phasing its brand off the car of the sport’s most popular driver.
PepsiCo is expected to announce this week that Diet Mountain Dew will replace its Amp Energy brand as Earnhardt’s primary sponsor for 16 races in 2012. The company has the primary sponsorship rights for 20 total races on the No. 88 car, and Amp will serve as an associate sponsor while also appearing on the hood for the other four races.
Earnhardt grew up drinking Mountain Dew.
“The story is really about opportunity,” said George Cox, Mountain Dew brand manager. “With Dew, Dale and NASCAR there’s this awesome marriage. Dale is the embodiment of the person we’re trying to target with Diet Dew. We wanted to tap into that equity Dew has in NASCAR and put it into overdrive with Dale.”
Pepsi and Hendrick Motorsports are expected this week to unveil a new paint scheme for the No. 88 car for next year’s Daytona 500. The unveiling comes just weeks after Earnhardt signed a five-year extension with Hendrick Motorsports that will keep him with the team until 2017.
Cox said Pepsi plans to focus on developing its marketing and activation plans for Diet Mountain Dew and won’t begin discussing a possible renewal with Hendrick until next year. Its current agreement with Hendrick and Earnhardt runs through 2012, but the company has had a long-standing relationship with Hendrick that dates to 1996.
Amp Energy signed a deal with Hendrick Motorsports and Earnhardt in 2007, shortly after the team added Earnhardt to its stable in one of the sport’s most anticipated free agent signings. The sponsorship was valued at $25 million to $30 million and made the brand the primary sponsor for 20 races on the No. 88 Chevrolet.
At the time, Amp was the fifth-largest player in a fast-growing category, which then had more than $6 billion in annual sales. But the category’s growth has stalled recently. The category added only 1 million new energy drink consumers between 2007 and 2009, compared to 9.3 million new consumers from 2005 to 2007, according to Mintel, a global market research company. Amp Energy has remained a small player in the category, generating an estimated $234 million for the past year across key retail channels for energy drinks except Wal-Mart, according to SymphonyIRI Group, a company that tracks retail sales across consumer packaged goods.
The shrinking number of new consumers made it difficult for Amp to justify the cost of the sponsorship. The brand also is planning to relaunch its product later this year and reposition it as an energy drink for older users, sources said.
By shifting the bulk of its marketing support of the driver from Amp to Diet Mountain Dew, Pepsi can save the Amp brand money and align Earnhardt with a brand he’s already passionate about. Earnhardt is a fan of Mountain Dew and grew up drinking the soft drink in North Carolina. When Brian Vickers drove a retro Mountain Dew car in a 2006 Nationwide Series race, Earnhardt famously asked for some of the retro hats that the brand rolled out for the occasion.
Though not as prevalent, Amp Energy will continue to have an association with Earnhardt, which PepsiCo hopes can preserve the connection Amp made with NASCAR fans during the last four years.
“They’re going to continue to speak to the NASCAR Amp drinker we’ve developed, but Amp is going through an evolution,” Cox said. “We’re not to a point of where we can talk about where we’re going with that, but once it’s public it will make sense how we’re using the NASCAR platform going forward.”
When the deal was signed in 2007, the energy drink market was dominated at the time by Red Bull, Monster Energy and Rockstar, which represented more than two-thirds of sales in the category. Amp brand managers hoped that by latching onto Earnhardt, they could quickly raise the energy drink’s profile by delivering a more diverse and mature consumer than any other energy drinks.
During the following four years, Amp Energy put Earnhardt at the forefront of its marketing efforts. It ran a full-page ad in USA Today that featured a letter to Earnhardt fans and immediately developed a Wal-Mart program that featured his image on cans at retail.
It later created a series of commemorative cans that were inspired by Earnhardt and featured imagery related to some of his favorite things in racing, like Talladega Motor Speedway. Its biggest promotional program was known as “Get on the 88,” a campaign that allowed fans to submit their names to Amp Energy and then see their name featured on Junior’s car at an upcoming race. A total of 88,000 names appeared on the car.
Amp Energy’s combined efforts in NASCAR, where it title sponsored the fall race at Talladega from 2008 to 2010, helped lift the brand from fifth in the energy drink category to fourth nationally and third in most NASCAR markets.
“We know from various studies and research that race fans are 2.5 times more likely to reach for Amp than the typical consumer,” Cox said. “The brand really made a place for itself within the sport and with Dale.”
But as the category’s growth flattened in recent years, the brand found it tougher to justify the cost of the sponsorship.
From the beginning, Mountain Dew contributed to that total sponsorship cost. The brand appeared on the rear quarter panel of the No. 88 car throughout the sponsorship. Mountain Dew began getting more prominent exposure with Earnhardt in 2008 when it was featured on the hood of the No. 88 car for the first time in a race. The brand got even more primary exposure this year when Diet Mountain Dew appeared on the hood of Earnhardt’s car twice during the summer, and it will appear in four additional races this fall during NASCAR’s Chase for the Sprint Cup.
Next year, that transition from Amp Energy to Diet Mountain Dew will be made complete. The National Guard will continue to be the primary sponsor for the other 18 races Earnhardt drives.
Brazil’s economy is booming, and the country’s support of the Izod IndyCar Series is heightening its economic growth.
Apex-Brasil, a government-supported agency that promotes natural resources and investment opportunities in Brazil, is on track to generate close to $1 billion in exports for Brazil that can be traced back to the group’s sponsorship of IndyCar. The agency says its 2011 hospitality programs in IndyCar have resulted in more than $809 million in exports to Brazil, and it still has two races remaining where it plans to host hospitality events to introduce international companies to Brazilian enterprises.
Total exports for 2011 are 37 percent greater than the $589 million generated in 2010 and 119 percent greater than the $370 million generated in 2009.
“We had good results last year, but this year we came more prepared,” said Silvia Pierson, the operations manager in the U.S. for the Apex-Brasil agency. “We did a better job of informing companies how to take advantage of the program.”
Apex-Brasil first partnered with IndyCar in 2009 in an effort to promote Brazil’s ethanol industry. It later expanded its efforts to include promotions of other Brazilian industries like coffee and information technology.
Through its partnership with IndyCar, the agency passes on its hospitality rights at races to Brazilian companies and industries. More than 350 Brazilian companies attend IndyCar races during the season and entertain up to six guests each, who are typically from U.S. companies.
“Some people ask us why we don’t sponsor a football team,” Pierson said. “With the race, it’s different. It’s a whole experience. You go to the track. You meet the drivers. It’s not a three-hour event. It’s a whole weekend.”
Apex-Brasil’s biggest hospitality event in the U.S. in 2011 was the Indianapolis 500. It had 120 guests, about 20 of whom were C-level executives. It also hosted 400 people in Sao Paulo, Brazil, for a race, and it expects to host 170 guests for the IndyCar season finale in Las Vegas on Oct. 16. Korman Marketing Group handles the hospitality program.
The agency has one year left on its current agreement, but Pierson said it expects to extend the agreement. The deal is valued in the low seven figures.
New or expanded lines of college products are showing up in places you’d never expect.
Boots sporting a school’s logo are being sold in western wear retailers. Licensed sunglasses are in Sunglass Hut stores all over the country. Logo pacifiers can be found in Babies “R” Us.
Even on the computer, virtual goods with college marks are appearing on social networking and gaming sites. These are all new distribution outlets for college merchandise this fall.
CLC, an IMG College company, is the nation’s top
New frontiers: Work wear, boots and Pillow Pets
The first college-licensed boots debuted in 2009 with just three Texas schools. There will be more than 40 schools by year’s end.
Maui Jim is predicting that more than 60,000 college-licensed sunglasses, priced from $169 to $179, will be sold this year, its first year in the market.
Farming and ranch retailers like Tractor Supply represent another new distribution outlet for CLC, which licensed Dri Duck’s line of work and outdoor wear.
“These are exciting new opportunities for us,” said Kirkpatrick, who added that CLC also is targeting grocery stores and home improvement retailers, such as Home Depot and Lowe’s.
And like any product maker or licensor, there’s also a strong push with Wal-Mart. The retail giant has long been a home for college apparel, but the company now appears to be going deeper with its licensed offerings to include more non-apparel items in its more than 1,400 stores. CLC’s goal is to more than double the amount of non-apparel items being sold in Wal-Mart in the next three years.
Fabrique, maker of the Snuggie, is out with the college-licensed Pillow Pet for $30 in Wal-Mart, JCPenney and other major retailers. The stuffed animal-shaped pillows are available in 55 school colors.
Whether Pillow Pets become the next fad remains to be seen, but fads can be a lucrative line of business for college licensees. Fads — products that are hot sellers for roughly six months or so — account for 15 percent of non-apparel business in the college market. Bobbleheads were a great-selling fad, and Silly Bandz were on fire for about six months last year.
Pillow Pets are off to a strong sales start, Kirkpatrick said, and the plush category, which includes stuffed animals, stuffed mascots, fuzzy footballs and other soft items, is coming alive “after being dormant for a few years,” he said.
Journeyman golfer Kevin Streelman swallows hard as he listens to one of the PGA Tour’s most respected voices tell him, “You weren’t at your best.”
As Tom Lehman continues in this honest, career-evaluating exchange, he tells Streelman, “You know how good you can be and you’ve got to say it. You’ve got to go for it.”
This back-and-forth between two world-class golfers was not part of a revealing interview on Golf Channel or CBS. It’s part of a documentary video series that’s launching this week on SchwabFilms.com.
Promotion for “The Mentor Project” will have a cinematic feel to it.
Charles Schwab, the tour’s official investment firm and umbrella sponsor of the Champions Tour’s seasonlong points series, sponsored these videos, which pair a 50-plus tour veteran with a younger player. Corey Pavin and Jeff Overton are featured in another video, as are father Jay Haas and son Bill Haas in the third video. More videos are planned, but the players have not been selected yet.
“We wanted to go after the spirit of HBO’s ‘Hard Knocks’ and Showtime’s ‘The Franchise’ to provide an authentic behind-the-scenes look at real mentorships in golf,” said Derek Benbow, director of corporate sponsorships for Schwab. “This documentary pairs champions with up-and-comers to look at the struggle it takes to succeed on tour.”
In Pavin’s video, he tells Overton, “You better win. Soon.” That exchange culminates a conversation between Pavin and Overton about the 2010 Ryder Cup, in which Pavin was the coach and Overton a U.S. player.
Lehman and Streelman, both from the Minneapolis area, have been friends for years.
“We worked with the PGA Tour to find those relationships that are authentic,” Benbow said. “This is not typically the kind of content you see on tournament telecasts.”
Lehman added: “You can’t force it. It can’t be faked. You can’t just put two guys together who don’t know each other. There has to be something there and that’s what I like about it. You find a relationship where the older guy who has seen a few more things and the younger guy really wants to be his best. That’s a true friendship, but also a true mentoring/mentoree relationship.”
Schwab created “The Mentor Project” as a way to lure viewers onto a new website, SchwabFilms.com, that includes playing tips from Hank Haney and investing tips from Schwab professionals. The videos with the tour players, each of which last about three minutes, will be edited into 30-second vignettes that will air during tournament broadcasts on NBC and Golf Channel this year and CBS next year.
They’ll also run on Schwab’s social media channels and PGATour.com.
Those spots will mimic a movie trailer. A print ad for Golf Magazine will look like a movie poster.
Schwab’s sports marketing agency, Team Epic, worked with the firm on the strategy, while San Francisco-based production company Mekanism produced the videos. Universal McCann buys the time for Schwab.
“The advice in the videos parallels the financial advice our experts provide at Schwab,” Benbow said. “And it’s something that will drive a larger audience to the new site.”
The players were not compensated for the interviews. Schwab instead made a contribution to the charity of each player’s choice.
For the first time since 2008, Speedway Motorsports Inc. has sold all of its Sprint Cup race title sponsorship inventory prior to its upcoming season.Sprint Cup race title sponsorships typically cost more than $1 million, and Burch said tracks have maintained their prices for such sponsorships since the recession.
The company, which owns and operates eight racetracks nationwide, recently closed a renewal with Bank of America for its fall Sprint Cup race and added a deal with AdvoCare, a Texas-based direct-sales company that offers nutrition, weight-loss and sports-performance products, in May for its Atlanta race. Those agreements combined with a new deal completed late last year with Kobalt for the Las Vegas race give SMI title sponsors for all 12 Sprint Cup races that its tracks will host in 2012.
“We’re getting back to where it was before the recession,” said Mike Burch, SMI vice president of business development. “Because we’ve got big weekends and key markets, there’s still corporate interest.”
Bank of America recently signed a four-year renewal with SMI for its title sponsorship of the Bank of America 500 at Charlotte Motor Speedway. It will be one of three primary sponsors featured on the speedway’s new video board, which is the largest in the world, and will be the official bank of Charlotte Motor Speedway. The bank has held the title rights to Charlotte’s fall race since 2006 and uses the race as a vehicle to promote the company in the Charlotte area, where its headquarters is located.
“Charlotte’s home to Bank of America and is the heart of NASCAR country,” said Charles Greenstein, head of global sponsorship marketing at Bank of America. “As one of racing’s leading companies, SMI provides us with world-class facilities and a best-in-class team to host the Bank of America 500, while continuing our support for a key industry in the region.”
The bank also plans to renew its position as the official bank of NASCAR, but it is dropping its sponsorships at four SMI tracks — Texas Motor Speedway, Atlanta Motor Speedway, Infineon Raceway and Las Vegas Motor Speedway— and five International Speedway Corp. tracks — Auto Club Speedway, Chicagoland Speedway, Kansas Speedway, Phoenix International Raceway and Watkins Glen International.
By closing out the last of its open Sprint Cup title sponsorships, SMI executives can turn their attention to other open sponsorship inventory. The company needs to sell title rights for a Nationwide Series race at Bristol and another at New Hampshire; Camping World Truck Series races at Atlanta, New Hampshire and Bristol; an NHRA race in Charlotte; and Izod IndyCar Series races at Kentucky and Infineon in Sonoma, Calif.
Burch said the limited amount of inventory that the company’s tracks have to sell will free up SMI’s sales force to be creative with other sponsorship deals. Infineon recently sold a presenting sponsorship for its racing season to Big O Tires, and Burch said other tracks are looking at similar opportunities.
While the league thanked fans in a prior postseason campaign, now it’s looking at a seasonlong bookend appreciation effort. “The idea is to recognize their passion and devotion, especially those that go to our games,” Waller said. “Putting the focus on them and showing they are a lot about what makes the game so extraordinary is where we want to get to with this campaign that stretches across the season.”
The NFL continues to look at a postseason awards show as a long-term goal, something that would likely be packaged with the rights holder for that year’s Super Bowl. Certainly there are many awards given annually by the NFL, but Waller sees an opportunity for something larger.
“The Oscars do a great job of recognizing brilliance within the film industry,’’ he said. “Our thinking here is that perhaps we can do as good a job at recognizing and rewarding all things across the NFL and then find a way to package it.’’
Fueled by the continued success of the NFL draft, an administrative function which continues to draw some of the best sports ratings on cable, the league is also in the formative stages of seeing what else it can do to coalesce fan engagement and passion during the offseason, when interest does not appear to ebb.
Visa, a longtime USSA sponsor, has tacked on seven more years to the sponsorship.
MARKETING GLIDE PATH: Visa has extended its sponsorship of the U.S. Ski & Snowboard Association for an additional seven years, through the 2018 Winter Olympics. While the payment card brand has been a sponsor of the skiing/snowboarding NGB for more than 15 years, a seven-year extension is unprecedented; it has never had a USSA deal of more than three years. However, longtime Olympic sponsor Visa has a penchant for identifying and leveraging emerging Olympic sports, and free skiing, a combination of snowboarding and skiing done in a terrain park, is one of those sports.
“Visa has always been one of our best activators and that should even escalate some,’’ said Andrew Judelson, USSA chief revenue and marketing officer.
The deal includes media and event sponsorship of various USSA competitions, along with an increased presence on USSA’s e-commerce store, which is done by TeamFanShop. While typically USSA revenue has peaked during Olympic years, Judelson said that sales revenue is already ahead double digits from 2010 — the year of the last Winter Olympics.
AGENCY WATCH: We continue to watch with interest agencies circling the NFL constellation, where business prospects are so bright, many in the business are starting to call the lockout and subsequent contracted free agency frenzy the best thing to happen to the league since instant replay.
A few early-season agency nuances you may have missed: Wasserman Media Group gets a payday from consulting on Pepsi’s recent 10-year renewal as one of the league’s largest corporate sponsors, and it had a hand in Nike’s displacement of Reebok with on-field apparel rights. Wasserman is also involved in selling the league’s overseas events, something we anticipate being expanded to two regular-season games a year as soon as next season. Recall that Wasserman also has its hand in the naming rights and remaining corner sales at the stadium formerly known as New Meadowlands, and that’s a healthy chunk of consulting and sales with America’s top sports property.
Meanwhile, the conversion of Marriott from an NFL Network sponsor to a full-fledged corporate sponsor strikes us as being more important in terms of media, value-in-kind and guaranteed business for Marriott than a rights fee. To say the NFL has been courting Marriott for a while is an understatement. Sources tell us that during their research, league marketers unearthed a presentation deck from 1991. Marriott’s Courtyard brand has been advertising on NFL Network, NFL.com and NFL Mobile since the 2008 season. However, we assume a healthy amount of in-kind will be directed against rooms at Marriott’s Ritz-Carlton brand, long a favorite of owners in Super Bowl cities.
What’s significant about the Marriott deal on the agency side is that it is the second NFL corporate patron under the aegis of IMG Consulting, which brought insurer USAA to the NFL’s table for a deal that began this season. In our mind, the most influential sports agency in the NFL orbit is Genesco Sports Enterprises, since it handles league sponsors Pepsi/Frito-Lay, Campbell Soup, Verizon and Motorola. While we continue to hear the Dallas-based agency is looking at adding new capabilities and name-brand sport marketers to the firm’s consulting and activation practices, Genesco chief John Tatum would not comment.
COMINGS & GOINGS: Tom George, Octagon senior vice president of athlete marketing, is leaving after 23 years of combined service to join lottery specialist and Scientific Games subsidiary MDI Entertainment, as vice president of sports marketing. The Alpharetta, Ga., firm has licensing lottery deals for instant games with MLB, NASCAR, the NBA, NHL, and UFC. The NFL leaves it up to its individual clubs, but we remain convinced a Super Bowl lottery is an incremental revenue hit waiting to happen, if it would pass muster of ownership. “As a founding member of Octagon, I have a great deal of respect and pride of ownership in what we have built. There is not another talent management firm I would ever want to work for. I look forward to helping extend the sports presence at Scientific Games,” George said.
Terry Lefton can be reached at email@example.com.