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Fast-lane marketing: NASCAR's success story is more than racing - By Rick Alm

Here's a pop quiz, but for diehard NASCAR fans only.  What is the official vegetable of NASCAR? The official breakfast cereal? Official ladies purse? Deodorant? Toothbrush? Infant bib? There is one of each, believe it or not. And still more - oh, so much more. "Conceivably, from RVs to underwear to toothbrushes to video games, one could actually live in a strictly NASCAR-licensed world," said NASCAR business communications director Andrew Giangola. Motor sports giant NASCAR has mastered the art of marketing partnerships. More than 200 companies pay millions to hitch a ride on NASCAR's shooting star that generates $2 billion in annual sales of NASCAR-licensed products. That's up from a mere $80 million in 1990. Corporate sponsors of racing teams pay millions more - perhaps as much as $20 million per season, it has been estimated_for the high visibility of the company's name emblazoned across the hoods of race cars. Advertising Age in 2002 estimated that such exposure was worth a collective $5 billion in advertising value to those companies, whose products range from Spam to Viagra.

Televised coverage of NASCAR events is ubiquitous over the course of the sport's 10-month season, with races aired in more than 150 countries. NASCAR claims a U.S. audience of 75 million fans and says NASCAR.com attracts 3.5 million hits a month. NASCAR doesn't disclose finances related to its business partnership deals, but experts who have analyzed the effects have come away awestruck. "The road to victory in NASCAR is paved with money," according to economists at the University of Missouri-Kansas City who examined two dozen NASCAR racing teams' corporate sponsorships between 1995 and 2001. The researchers' report summed up those relationships as "corporate America's love affair with NASCAR . . . branding their products and services with the aura and mystique of NASCAR."

More to the corporate bottom-line point, the UMKC study found that the average team sponsor's stock value soared $300 million - net of the sponsorships' cost - during the two days following announcements of the marketing deals. The figure ballooned to an average $500 million gain for companies with direct ties to the consumer automotive industry.

Such growth in shareholder value from a voluntary marketing initiative alone is unprecedented, the researchers said, and it "is certainly possible that no single marketing program in the history of American business has led to larger dollar increases in corporate valuation." "Not corporate stadium sponsorships, nor Olympic sponsorships, not celebrity endorser signings have registered a mean net increase in shareholder wealth even approaching $300 million."

"Indeed," the study concluded, "across the universe of sponsorship possibilities, it is possible that NASCAR sponsorships represent the gold standard." That gets no argument from Minneapolis-based Wilsons Leathers, a national dry goods chain with 429 stores in 45 states, including a shop in Overland Park. Wilsons chief executive Michael Searles credits NASCAR with a huge share of the company's 13 percent first-quarter sales growth. Less than 5 percent of the stores' inventory is NASCAR-branded, said Searles. But those products, ranging from leather jackets autographed by drivers to women's handbags, account for around 20 percent of sales. NASCAR's Giangola is modest in the glow of success.

"It's not that we're brilliant marketers," he said. "That's just the way the sport grew up," with drivers and cars covered in sponsorship logos, patches and decals. "Our sport is an expensive sport, and our fans embrace that. "A consumer and fan of NASCAR can patronize Home Depot or drink a Coca-Cola with the knowledge that every little bit helps. It's been this way for 50 years. . . . It works." Despite the huge numbers involved, Giangola noted that the sponsorship and licensing-dollar pie was carved into many slices and consumed not only by NASCAR, but also by its affiliated tracks, independent racing teams and others. The strategy doesn't easily translate to other sports, he added. "When Major League Baseball tried to put Spider-Man (movie promotions) on the bases, it wasn't authentic," Giangola said. Meanwhile, the NASCAR phenomenon is spinning off other enterprises. Driver Jeff Gordon, for instance, is launching his own private-label wine and has joined Elizabeth Arden to market his own cologne. There's a willing, able and identifiable audience of consumers out there eager to snap up all things NASCAR. Surveys find that NASCAR fans are typically younger and more affluent than the U.S. population. And surprisingly, given the sport's rural Southern roots, NASCAR fans today are slightly more likely than non-fans to be company officers and readers of Forbes magazine, for instance.

A Simmons Market Research report found 40 percent of NASCAR fans willing to switch their buying habits to NASCAR-linked products. They were three times more likely than non-fans to buy a NASCAR sponsor's goods or services. The UMKC study concluded: "In an era when consumer overload is a serious concern . . . NASCAR sponsorships are an economically advantageous method of cutting through the clutter to reach millions of demographically desirable consumers." The Center for Sports Sponsorship at Virginia's James Madison University came to the same conclusion, declaring a "NASCAR sponsorship is the best buy in marketing . . . unparalleled in the sports world or anywhere else." The center's survey of 1,000 fans - short for fanatics, remember - found intense loyalty to the sport as well as to its corporate benefactors. More than a third of fans could list the chief corporate sponsors of the Nextel Cup standings' top 30 drivers unaided by any hints.

And 76 percent agreed that without sponsorships there probably would be no NASCAR. Indeed, said center director Larry DeGaris, "the reality is, without corporate dollars there is no sports. That's a financial fact of life in pro sports today. . . . It's big business." DeGaris said NASCAR didn't appear to be approaching any kind of overexposure ceiling with its branding partnerships. Fully half of the center's fan survey respondents said they considered buying sponsors' products as their contribution to the sport's well-being. And, DeGaris said, "there's room for growth. I think you'll see a lot more new product categories opening up."