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Time to bring the energy

Monster plans its NASCAR activation

In a sport known for speed, Monster will need every bit it can find in crafting an activation plan for its new title sponsorship of NASCAR’s premier series, with only about two months until the start of a new season.

The California-based energy drink company signed what sources say is a two-year deal with a two-year option, though both sides would not disclose the length of the deal or financial terms. Sources, however, said the deal is worth about $20 million annually in rights, with activation still being determined but expected to be less robust than predecessor Sprint.

Sprint was paying $65 million to $75 million a year in rights and activation, sources said.

Monster executives were in NASCAR’s Charlotte offices last week working on details.
Photo by: TWITTER / TODD HIRSCHFELD, HIRSCHFELD MARKETING SOLUTIONS
Monster and NASCAR announced the deal Dec. 1 in Las Vegas. Last week, Monster executives and staffers flew to Charlotte for immersion meetings with the sanctioning body. They began to sort out activation plans, down to figuring out the name and logo of the racing series.

Monster traditionally has handled its sports marketing in-house and plans to continue doing so with the NASCAR deal, said Mitch Covington, vice president of sports marketing for Monster. Monster does do some small work with North Carolina-based Hirschfeld Marketing Solutions, which provides on-site hospitality assets.

Covington was not ready to release activation details but provided hints on what Monster may do. Monster sponsors a host of motorsports and action sports properties globally and is known for its cross-promotion acumen, and Covington confirmed that it will be looking to cross-promote in NASCAR. He noted, for example, that Italian MotoGP star Valentino Rossi did a promotion with NASCAR driver Kyle Busch a few years ago, and Rossi has been itching to get involved with NASCAR again ever since. He said virtually every form of activation imaginable is under consideration, from special NASCAR drinks to basic television advertising.

In addition to the level of activation, a main concern industry observers share privately about Monster is whether the company’s edgy style will fit with a sport that has a family ethos and atmosphere. But many in the industry think that for a sport trying to age down, Monster could be the ticket.

“I like it. You’re trying to reach a younger demo, so you have to start growing a new fan base, energizing the sport and having companies that can kind of do that,” said Rod Moskowitz, principal and CEO of Fuel Sports Management Group. “It’s great timing for an aggressive brand like Monster to help usher in a new era of NASCAR with all of the talented drivers coming up in the series.”

David Grant, principal at Team Epic, said, “Monster gives not just the financial jolt and ability to market to the next generation,” but also provides a vote of confidence for the sport.

For his part, NASCAR Chief Operating Officer Brent Dewar said he is not concerned by Monster’s marketing plans.

“Not at all; it’s a modern manifestation of where we started with Winston,” Dewar said. “Winston was an edgy brand; we’re a private, entrepreneurial company ourselves that manages the stakeholders. This is a very entrepreneurial company that operates in a large, competitive industry and does very well. So we see a lot more alignment, and it will resonate with our core fan as Winston did back in the day.”

Tyson Webber, president of GMR Marketing, said Monster’s retail activation will be a big benefit to NASCAR.
“I think this is going to be predominantly beneficial to NASCAR based off of where they’ve been, simply because of the access into the number of different types of retail outlet stores they’re going into — [convenience] stores, Wal-Mart, Target, grocery stores — that’s a huge component of the NASCAR fan base’s shopping habits,” Webber said. “And to have the ability to have the title partner have access and relationships to those retailers is going to be hugely beneficial.”

How Monster will coexist in the sport with other beverage brands is another key part of the deal. Coca-Cola has a nearly 17 percent stake in Monster but was not involved in this deal. Tracks such as Indianapolis Motor Speedway host Red Bull-sponsored events. Another competitor, 5-hour Energy, sponsors Furniture Row Racing in the premier series. Monster’s NOS brand sponsors Joe Gibbs Racing driver Kyle Busch in the NASCAR Xfinity Series and is expected to continue doing so. Monster also sponsors Stewart-Haas Racing driver Kurt Busch in the premier series and is expected to continue that relationship.

The search for a series sponsor took nearly two years, included about 200 companies, and yet still came down to the wire. When NASCAR first hit the market for this deal in early 2015, sources said it was eyeing a 10-year agreement worth between $90 million and $100 million annually in combined rights and activation fees, but some sources close to the sanctioning body later insisted that there was never a definitive number throughout the process.

Dewar said that despite the anxiety infiltrating the industry in the weeks leading up to the announcement, “The terms and conditions we’re getting are what we wanted.” He said NASCAR sought a shorter-term deal “so we could stay current in the marketplace.”

While not aware of terms of the Monster deal, Kimberly Meesters, who headed up Sprint’s NASCAR title sponsorship, said a shorter deal brings pros and cons.

“Some sponsorships lend themselves to short-term relationships, but entitlements, by nature, tend to call for a long-term investment,” Meesters wrote in an email. “It took Sprint a couple of years to get acclimated to the fan base and the industry; then we were able to extract maximum value.”

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