NASCAR: Explosive Growth

There was a story in last Saturday's Toronto Star about the popularity of NASCAR and its power as a marketing juggernaut. The lengthy piece includes a section about CASCAR's relationship with NASCAR.
- Greg.


By Paul Hunter // The Toronto Star

The M&Ms No.38 car slingshots past UPS No.88 after a heart-pounding 11 laps of trading paint.

Another Sunday stop on the NASCAR circuit? No, this is Vaughan, where a little bit of Saturday night rubbin' heats things up on a cold winter's night.

To find the future of NASCAR, to understand how far the stock car world has evolved from its bootlegging roots in the tobacco belt, look not to today's roarfest at Daytona, the Super Bowl for the gears-and-beers set.
Instead, trek to the sprawling malldom of suburbia where the fanatic and the fanciful line up to indulge their motorhead fantasies, lived out at top speeds of 28 kilometres an hour on the indoor Figure-8 track at the recently opened NASCAR SpeedPark.

Vaughan Mills is where the marketing engine that is the National Association for Stock Car Auto Racing and the sport's loyal and broadening fan base embrace in unabashed symbiosis.

At the 40,000 square-foot NASCAR altar, there are smaller tracks for smaller fans, race simulators that give the feel of competing in a speedway event and, of course, licensed merchandise. From Tiffany floor lamps with the late Dale Earnhardt's No.3 immortalized in leaded glass, at $349.95 (Canadian) a pop, to a figurine of an orange-clad Santa Claus driving an orange Home Depot sleigh emblazoned with Tony Stewart's familiar No.20. They're either $19.95 or $69.95, depending, apparently, on the size of your gift-giving spirit.

This ain't your granddaddy's NASCAR, especially if he was agood ol' boy named Bubba, Skeeter or Bobby Joe. Those hayseeds have sewn a multibillion-dollar industry.

The sport, like its fan base, has come to have teeth.

NASCAR has put pedal to the metal to distance itself from the tobacco-spittin', cow tippin', hard cussin', beer swillin' hillbilly image that once defined the typical stock car driver, making him the darlin' of the deep south.
Now those drivers make so many Gs you can forget the apostrophes. The ad-plastered man behind the wheel is more likely to be a yacht-owning, celebrity-dating, Versace-wearing, private-plane piloting, Saturday Night Live-hosting megastar. He'll show up among People magazine's 50 Sexiest Men long before he makes an appearance at anyone's clandestine still in the Carolina woods.

Those drivers are the darlings of corporate America and there are no more double negatives, only positives. These are clean-cut, uniformly white males who project family - read mainstream America - values. Their devoted fan base became part of the lexicon during the last presidential election as candidates wooed NASCAR dads, the group of rural, conservative beer-drinking fans large enough to swing the U.S. leadership race.

Forget moonshine. These new drivers not only sip wine, they sell it. Four-time NASCAR champ Jeff Gordon will begin marketing his grape fuel this fall. The first release will be a 2004 Carneros - not Camaros - Chardonnay.

"These wines are not intended to be a novelty item, and they are not connected whatsoever with souvenir sales," Gordon said when he launched his label.

For NASCAR, these are the Days of Plunder. The chance to reap huge financial rewards as stock car racing has grown into the second-most popular sport in the United States behind the monolithic NFL.

NASCAR's research shows there are some 75 million Americans (roughly one in three adults) who consider themselves fans of the sport and understand that it is more than a bunch of rednecks turning left for three hours.

More importantly, a third of those fans are in the 18 to 34 range, a demographic coveted by advertisers. The resulting financial numbers are staggering in what is now an annual $6 billion (U.S.) industry.

In June, 2003 NASCAR signed a 10-year, $700 million (U.S.) agreement with Nextel Communications to take over sponsorship of its top series. It is in the midst of a six-year, $2.4 billion (U.S.) TV contract signed with NBC and Fox and it has been the only sport to show consistent growth in television ratings over the last five years. Fans spend an estimated $2 billion (U.S.) on merchandise, up from $90 million in 1998. NASCAR brings in almost $1 billion (U.S.) in sponsorship every year.

"The growth is explosive. I've never seen anything else like it in sports marketing," said Randy Paul, the managing director of NASCAR Canada. "We haven't come close to tapping out the market."

In Canada, where NASCAR touts its fan base to be 5.8 million, some $2 million (Canadian) worth of products was sold in 2003, putting it just a million behind major league baseball but some $148 million (Canadian) in arrears of the NHL. But that was before last fall's formal agreement between NASCAR and CASCAR that will allow the Canadian operation to better tap into the marketing and management expertise of its American cousins.

That is expected to bring a huge boost in merchandise sales this side of the border. An Ipsos-Reid poll commissioned by the newly formed NASCAR Canada found that 44 per cent of stock car racing fans were "disappointed" with the number of NASCAR products available in this country and concluded that "there exists a significant opportunity to sell merchandise in Canada."

The first concrete test of that will come this spring when NASCAR apparel, previously sold mostly in Canada through mom and pop hobby shops, will hit the shelves at more than 300 Mark's Work Wearhouse stores across Canada.

"There definitely is a NASCAR movement afoot. The brand is becoming more prevalent in the marketplace. We felt we couldn't ignore the opportunity," says Dale Trybuch, the chain's Calgary-based general merchandise manager.

"Part of the appeal, I think, is that NASCAR works hard to keep the sport accessible. The drivers seem like the boy-next-door. He really could be a neighbour you could talk to even though these guys make millions of dollars a year."

They may pilot the cars but it's that down-home image, a holdover from a less corporate time, that drives the NASCAR economy. Companies pay as much as $20 million (U.S.) to back what they hope will be a winning driver and, because the identification with the sponsor is extremely high, those drivers are held to rigid standards of behaviour.

"It boils down to the dollar," Jimmie Johnson, a 14-time NASCAR race winner sponsored by Lowe's home improvement stores, told the L.A. Times. "Lowe's doesn't want someone as a spokesman with a drunk driving record or a drug problem. They have an image to uphold. At an early age, if you want to survive, you learn to put on a corporate hat and be responsible."

To that end, NASCAR provides its drivers with media training, instructing them on how to project the proper image by the correct use of everything from body language to their choice of words.

Rick Benjamin, who is teaching the course, says with the escalating cost of racing, it has almost reached the point where a driver has to be a salesperson first and a driver second. It's no longer enough just to be able to "drive the wheels off a car."

"They view media training like going to driving school - it's something they have to learn if they want to get to the top," he said on nascar.com.

With the footprint of NASCAR spreading across America - there are newer tracks in Phoenix, Dallas, Chicago and Kansas City - today's media-savvy drivers show up almost anywhere in the public eye following chairman Bill France's edict to "be the most aggressive marketers in sport."

There is NASCAR week on Family Feud. Drivers have been on Wheel Of Fortune, Days Of Our Lives, The West Wing and MTV's Cribs. Jeff Gordon has hosted both Saturday Night Live and Live with Regis and Kelly.
Dale Earnhardt Jr.'s autobiography Driver No. 8 spent 17 weeks on the New York Times bestseller list and was Amazon.com's best-selling book in 2002.

NASCAR plans to produce one movie a year including an upcoming sequel to the Love Bug series in which Matt Dillon is the NASCAR driver of the popular Volkswagen. NASCAR 3D, an IMAX film, topped $20 million (U.S.) in gate receipts last year.

Any driver who strays from the image that the France family is trying to project better be prepared to suffer the consequences.

Fighting and swearing on TV are usually followed by emails from angry church groups and heavy fines. Fortune 500 companies, after all, don't want to see their walking billboards exchanging head noogies in the infield.

"A driver has to maintain the proper image for the sponsor or he'll be replaced," said Robbie Weiss, NASCAR's international director. "In a lot of other sports, endorsements are secondary. In NASCAR, a key part of success on the track is the relationship with the sponsor. A driver who doesn't represent himself properly not only has to deal with NASCAR, but also the person who put him out on the track."

The most glaring example of NASCAR's intolerance came last year when Dale Earnhardt Jr., in his exuberance over winning his fifth race at Talladega, uttered a profanity during an NBC interview.

"It don't mean s--- right now. Daddy's won here 10 times," he said.

Earnhardt later said the word was uttered in jubilation and hoped that would mitigate a penalty.

"If anybody was offended by the four-letter word I said ... I can't imagine why they would have tuned into the race in the first place," he said.

Nevertheless, Earnhardt was fined $10,000 (U.S.) and docked 25 points in the standings for the Nextel Cup.
Richie Gilmore, director of competition for Dale Earnhardt Inc., crystallized how the sport is changing amid increased corporatization.

"The popularity of the sport is based on colourful personalities and the fact that everyone can relate to these drivers and their emotions," he said. "Now that seems like a detriment."

Still the fans and the sponsors can't get enough in what Weiss calls an "organic connection."

"The fans recognize that the sponsor is an integral part of his favourite driver's team. They feel good about it. They don't look upon it as a company trying to sell them a product."

Marketers consider NASCAR followers the most brand-loyal fans in sport. Cars are known by the sponsor's name - the Home Depot car, the Tide car, the Cheerios car - and fan loyalty to a driver extends to his backers.
Rather than be offended by the proliferation of advertising, a Sports Illustrated poll found that a stunning 81 per cent of NASCAR fans make an effort to purchase the products of their favourite team sponsors.
"It's not a sport, it's a lifestyle choice by the fans," explains Paul.

"A family might decide to load up the kids and the grandparents in the Winnebago and head off to Michigan International Speedway to camp for a week because all their friends will be there. They would sit in chairs with Dale Earnhardt's name on the back, sit at a camping table shaped like the hood of a race car, drink from beer mugs with Tony Stewart's name on them while the kids play with their NASCAR die-cast replicas. They would cook on a NASCAR-branded barbecue and cut their wood for a fire with a Husqvarna (a NASCAR promotional partner) chainsaw."

"People want the products connected with NASCAR. They are looking for more goods and services (that carry the brand)." Corporate results show the power of that connection.

After Coca-Cola began sponsoring NASCAR, it sold an additional 55 million bottles of its soft drink each month, according to Harris Interactive, a market research firm.

Drakkar Noir, a relatively small company, signed on as one of Dale Earnhardt Jr.'s sponsors in 2002. The impact was immediate. According to Brandweek, the marketing magazine, Drakkar Noir went from being ranked 15th in men's cologne sales in 2001 to third. The company's sales doubled in the first four weeks after it signed on with Earnhardt and sales have grown 138 per cent since the inception of the program.

Last week, Gulfstream Aerospace became an official NASCAR sponsor, a move that the No.3 maker of business jets sees as a means to gain access to the race teams and executives from other companies participating in the racing series.

"NASCAR has more Fortune 500 companies' involvement than any other sport and these companies are increasingly pursuing business-to-business opportunities within the sport," George Pyne, NASCAR's chief operating officer, said when making the announcement.

With so much money on the line, the result has been a sanitization of the drivers, or at least an iron-firm desire for the sport's front men to protect the image of the sport. In some ways, it is turning its back on its own history.

The racing league got its start when Bill France Sr., an Amoco garage owner who ran a road and beach race in his hometown of Daytona, gathered about 30 of the top drivers for a meeting at a local bar in December, 1947. With the drivers, he created a sanctioning body called NASCAR. The circuit grew but it was limited to the southeast and television exposure on racing segments on Wide World of Sports. NASCAR got its big break in 1979 when CBS opted to televise the Daytona 500, the first time a stock car race would be shown from flag-to-flag on national television.

NASCAR got a huge break when a snowstorm hit the U.S., keeping people indoors in front of their televisions. Fifteen million viewers watched the race that ended with a last-lap crash, a winner by a car length and a fist fight in the infield between Cale Yarborough and Donnie Allison - with whom he'd collided at the end - and Bobby Allison entered the fray to defend his brother. It was wild entertainment and newcomers were hooked.
That national exposure came just as cable television was getting started and a nascent network called ESPN, in need of sports properties, began filling airtime with NASCAR events. As a television event, stock cars were off to the races.

But that growth and gentrification of the sport has alienated some long-time fans who feel NASCAR took a right turn somewhere and got too far away from its roots, while the drivers, despite their untold riches, maintain a remarkable ability to present themselves as common men and relate to the fans.

The momentum of NASCAR has taken it into big American cities - a New York initiative is considered the next important step - and with that has come bigger tracks and bigger prices. The Busch series will run an event in Mexico this year, the first time a points race has been held outside the United States and, according to NASCAR Canada's Paul, a future Canadian race remains "under consideration."

For now, local fans will have to settle for their little slice of the growing NASCAR pie at a shopping mall in Vaughan. 'The growth (of NASCAR) is explosive. I've never seen anything else like it in sports marketing.