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SBJ/June 17-23, 2013/Marketing and Sponsorship
Innovation leads to NASCAR deal
HP becomes first official tech partner
Published June 17, 2013, Page 1
The agreement, which sources valued at $2 million to $3 million annually, makes HP Enterprise Services the sport’s official technology partner. The company is NASCAR’s first partner in that category and the first technology-related company it’s worked with since Ask.com exited its official deal in 2009.
|HP CEO Meg Whitman with NASCAR CMO Steve Phelps at the HP Discover conference
HP developed the center for NASCAR without signing an official sponsorship, and it had limited rights to promote its ties to the sport. But it has begun pitching the Fan & Media Engagement services to clients and last week brought NASCAR chief marketer Steve Phelps to Las Vegas to speak about the center at HP Discover, an annual event showcasing the company’s products and business solutions to more than 10,000 business and government clients.
The company plans to use its sponsorship of NASCAR to develop additional technology and business innovations that it can then pitch to clients. It will hold quarterly meetings with NASCAR in which the parties discuss ways to “co-innovate” and develop technical solutions that help NASCAR’s business and the sport, said Charles Salameh, vice president and general manager of HP Enterprise Services, who drove the deal from the brand side.
“The partnership works as a lighthouse program,” Salameh said. “We’ll build technology in a real-world environment. … Rather than use a PowerPoint presentation [of what we have developed], we can say, ‘Come look at our partner NASCAR.’”
The approach marks a shift in the way HP approaches sports marketing. For years, its most visible sports marketing efforts centered on using athletes like Shaun White and Michael Phelps in advertisements designed to convince consumers to buy its PCs. It also sponsored the NBA from 2008 to 2012. The deal was the company’s first professional league sponsorship and it used the NBA to promote its laptops, which were used at scorers tables, and other products with NBA-themed advertising.
“This is not an opportunity for us to sell anything based on brand,” Salameh said. “It’s an opportunity to showcase how technology helps businesses solve problems. Our real focus is to look at the challenging business issues NASCAR faces — whether that’s tracking their fans or providing their sponsors with more insight into how fans see sponsorships at a race — we are there to help solve that problem. This is why the Fan & Media Engagement Center was created. There could be other business challenges that NASCAR has that could have relevance to other companies.”
The approach HP is taking with NASCAR is common in the world of Formula One where teams like Lotus and Red Bull partner with Microsoft and Siemens, respectively, to use their technologies to improve car speed and measure the durability of auto parts. Most of those deals are value-in-kind agreements, and the brands use their ties to the teams to promote their technology expertise to business clients.
HP dabbled in that world when it sponsored the Williams BMW F1 team from 2002 to 2005 and the Renault F1 team in 2011 and 2012, but the NASCAR deal represents a different spin on that formula.
The company didn’t work with an agency on its NASCAR deal, and it doesn’t plan to work with an agency in the future. The deal comes on the heels of its decision to exit its arena naming-rights deal in San Jose 2 1/2 years before the 15-year, $47 million deal officially ended.
|NASCAR’s Steve Phelps discussed the Fan & Media Engagement Center at HP Discover in Las Vegas.
“It’s a major step in technology and innovation for NASCAR,” said Jim O’Connell, NASCAR’s chief sales officer. “The joint commitment we’re making to bring innovation to the sport fulfills Brian’s vision. It’s a logical next step [for NASCAR]. We’ve had a lot of success in building green partnerships, and this is the first step in what we believe will be a successful process in adding technology and innovation partners.”
NASCAR began making a deliberate push to engage technology companies two years ago. It partnered with Google in 2012 on the company’s April Fool’s joke and partnered with Twitter to create a designated page that aggregates NASCAR-related tweets.
HP is the first partnership that it has converted from a non-cash agreement to a traditional sponsorship. NASCAR officials and track and team executives hope that the deal opens the door to other Silicon Valley-based companies, which don’t have a history of sports sponsorship but do have a huge place in the U.S. economy.
“This is a first step, and it’s a really significant step,” O’Connell said.