Earnhardt Confident In HMS' Future Following Nationwide's Exit
Dale Earnhardt Jr. this morning hit Twitter to address Nationwide Insurance's exit from Hendrick Motorsports and driver Alex Bowman's No. 88 Chevy, noting he is "confident in HMS and Alex securing partnerships to carry them into the future." Earnhardt was sponsored by Nationwide in the No. 88 during his last three years in the Monster Energy NASCAR Cup Series, though he noted he had been working with the company before it became a primary sponsor on HMS' cars. That personal relationship has continued since his move to the NBC broadcast booth and will not be impacted by yesterday's news. Earnhardt noted he was "sad to see this chapter come to an end," but acknowledged marketing strategies often change as companies evolve.
INSIDE THE EXIT: Nationwide in exiting the deal is using an early out clause in its contract as the company goes through several significant changes to its business structure and executive team. Nationwide is changing its business model from having exclusive agents to only working with independent agents by the middle part of ’20. That means that Nationwide’s insurance products will now only be sold by agents who sell products from multiple insurance companies, which in turn is leading to a change in marketing philosophy where it sees less value in brand exposure. The exit marks a big blow for HMS, as Nationwide had 20 primaries per year on Bowman’s No. 88. While Nationwide's precise spend is not known, the company is widely believed to have seen its per-race cost reduced when HMS switched from Earnhardt, the sport's longtime most popular driver before he retired, to a much less known quantity in Bowman. Still, primaries for top teams in NASCAR run at least in the low six figures per race. Nationwide will retain a presence in NASCAR -- albeit a much smaller one -- by continuing to its personal service agreement with Earnhardt and hosting partners at select races next year. After informing NASCAR in ’14 that it would end its title sponsorship of NASCAR’s secondary series after that season, Nationwide joined HMS to become a primary sponsor of the No. 88 driven by Earnhardt starting in '15. Bowman is still signed with HMS through ’20. Nationwide also vacated its role as NASCAR’s official insurance sponsor after '17, being replaced earlier this year by Geico. HMS will need to quickly upsell with current partners and/or get out in the market to try to find a new sponsor with a hefty marketing budget.