Click n’ Close has a three-race deal as primary sponsor of Darrell Wallace Jr.’s car.Getty Images
As sponsors re-evaluate their investment in the sport, NASCAR teams face an inescapable trend of stringing together a multitude of primary sponsorships, with some covering as few as one race.
Instead of spending the lion’s share of a NASCAR marketing budget on putting logos on the hood of a car, many sponsors are devoting more of their spend to activating the partnership all year through media while doing fewer primary sponsorships.
Take for example:
■ BodyArmor over the next several months will roll out point-of-sale displays featuring driver Ryan Blaney but is slated to be the primary sponsor of Team Penske’s No. 12 Ford only one time this season.
■ Outback Steakhouse gives out free Bloomin’ Onion appetizers the day after driver Kevin Harvick finishes in the top 10 in the Monster Energy NASCAR Cup Series but is primary sponsor of his Stewart-Haas Racing No. 4 Ford for only a handful of races.
■ Hooters will give out free fried pickle appetizers when driver Chase Elliott earns a top-10 finish this season in the Monster Energy Series, although it has only two primary sponsorships on Hendrick Motorsports’ No. 9 Chevrolet all year.
The trend toward corporations taking fewer primary sponsorships started several years ago, when the cost to do business with NASCAR teams was at its height. But as more new brands enter the sport with smaller packages, and some legacy brands scale back, the trend is affecting every team in the garage.
One of the biggest pieces of real estate in the NASCAR garage now available belongs to the Hendrick Motorsports Chevrolet of driver Jimmie Johnson, a seven-time Monster Energy Series champion. Lowe’s announced two weeks ago that it will leave the sport after this season, vacating its season-long primary sponsorship. Sources said Lowe’s was likely spending between $20 million and $25 million annually, a figure that rival team executives say will be tough, if not impossible, to fully recoup.
BodyArmor has one race as primary sponsor with Ryan Blaney and is focused mostly on point-of-sale activation.
Pat Perkins, Hendrick Motorsports vice president of marketing, said the team will head into its replacement search open-minded both to the possibility of finding a full-season replacement or splitting the inventory between several brands.
“I don’t know if right now we can lock ourselves into saying, ‘We just want one company affiliated with the property,’” Perkins said last week. “If there are opportunities that make a lot of sense but aren’t for the full season, we’ll certainly look at those. If we’re engaged with a corporation that wanted all 38 races, great, we’d certainly welcome that, but we’re open to all ideas right now.”
The small smattering of season-long sponsors now in the sport includes FedEx, Shell-Pennzoil, Kroger and Smithfield. Hendrick Motorsports will need to lean heavily on Johnson’s pedigree if it hopes to add to those ranks.
Other new sponsors this year that came into NASCAR national-series teams with fewer than half a dozen races include Click n’ Close, which took three races as primary sponsor with Richard Petty Motorsports; and BurgerFi, which signed a two-race primary deal with Xfinity Series team JR Motorsports.
While brands activating deals more through media, at-track displays and retail helps the sport get much-needed exposure, it also makes it increasingly difficult for teams to sell all their inventory, forcing a market correction that’s seen rate cards tumble in price. To shore up deals, some teams have instituted minimum-purchase thresholds — a handful of primaries — that must be reached before a company can activate for the entire season.
Executives in the sport point out that many deals are starting small but some are growing in time. With the market correction driving prices down, some team salesmen think that could help the inventory issue work itself out eventually.
It used to be a sponsor would sign up for 36 races and sign a big check, but now you do it with companies taking four to six races and the season becomes a patchwork quilt. That’s always been true across the sport but now that’s true at the top of it.
Bob Jenkins
Owner, Front Row Motorsports
“Obviously you’re seeing brands enter in smaller increments, and that’s fine,” said Mike Verlander, vice president of sales and marketing of Stewart-Haas Racing. “You have brands come in and test the waters and do it wisely within their budget window. They do it within a way where they know what their ROI is and can track it. Once they have their arms around it, you do see them grow.”
Anheuser-Busch, Monster Energy and Credit One Bank are examples of companies that have grown their investments in the sport in recent years. Verlander said that many brands “are doing it the right way; you just don’t hear about it because the cynical nature of society wants to talk about those who haven’t done it well.”
Andrew Campagnone, senior managing partner of Sports Marketing Consultants, a Charlotte-based sales and marketing agency that has deep ties in NASCAR, said he’s still seeing brands looking at deals in NASCAR, but just at lower rates. He said the industry needs to do more myth-busting about the price of entry into NASCAR and how it’s correcting to more palatable amounts.
“There’s no more big deals out there, (but) there’s tons of $2 million deals out there,” Campagnone said. “That’s where we are as a sport, and the teams and landscapes have to adjust — and I think we’re going that way. … The industry as a whole has to go out with a narrative that the sport’s healthy and the price point is not as high as you think it is. The perception is still out there that it costs a gazillion dollars to come play.”
Bob Jenkins, owner of Front Row Motorsports, a mid-tier Monster Energy Series team, said the trend toward sponsors having smaller primary packages has been affecting smaller teams for years; what’s new is how it’s reached the sport’s leading outfits.
“What’s hurt us is when there are one-, two- or three-race sponsorship deals (out for RFP), and now you’ve got (to compete against) a lot of the larger organizations who’ve taken deep discounts to fill inventory,” Jenkins said. “It used to be a sponsor would sign up for 36 races and sign a big check, but now you do it with companies taking four to six races and the season becomes a patchwork quilt. That’s always been true across the sport but now that’s true at the top of it.”
