Geoff Smith's Take: the real story on sponsorship marketing in NASCAR

  A new season, new partnerships, new faces, and Geoff Smith says NASCAR analysts need to take a new, broader approach to the sport. (Richard Petty, C, Ford racing boss Jamie Allison, R, and NASCAR's Brett Bodine, L) (Photo: Autostock)
  

   By Mike Mulhern
   mikemulhern.net

   FONTANA, Calif.
   The headlines in Thursday's Wall Street Journal were again encouraging, and certainly NASCAR team owners and crewmen need some positivity on the economic front at the moment.
    --- Factories Get Set to Hire as Output Rises
    --- A Stimulus Plan Success Story
    --- Fed's Minutes Show a Rise in Confidence in Economy
    --- Construction of Single-Family Homes Up
   --- H-P Earnings Jump 25% on Strong Computer Sales
   --  Applied Materials Posts Profit as Sales Surge
   So, can this economic optimism be transformed into bigger NASCAR speedway crowds and more stock car racing sponsorships?
   Well, Geoff Smith, who has been running Jack Roush's racing empire for more than 20 years, while the boss tinkers with carburetors and drivers and crew chiefs, says yes.
    Smith, with his sometimes dry and droll humor (like with Ryan Newman, you have to be on your toes to catch all the nuances), has opened the new stock car season with his own marketing campaign: bill it as "No, the sky isn't falling" pitch.
    During his many years in the sport, Smith (a lawyer by trade, an avid reader as well as avid skier) has carved out a significant niche here as one of the few 'big picture' men, a guy who can step back from the battlefield and the seemingly endless weekly team-vs-team skirmishes that run from sometime in January all the way through to Thanksgiving.

    Smith (a world-class skier in his prime, whose long-time skiing buddy Jimmie Heuga just passed, Heuga one of the first Americans to win an Olympic skiing medal) says that in today's world TV ratings are not the be-all/end-all definition of success.
   
   

   TV is such a dominant force in NASCAR... but Geoff Smith says look at the bigger picture (Photo: Autostock)

   

   
The last two seasons NASCAR's declining TV ratings were seen as a dire symptom that something was amiss here.
    "TV ratings did decline, and that single fact was used as the only symptom necessary to predict the imminent death of the patient," Smith says.
    "What most people don't realize is that the TV ratings of the race broadcast are only one portion of the media-exposure of the sport that is consumed by NASCAR fans."
    
   Smith first pushed the 'launch' on this campaign in mid-January, during the sport's annual pre-season media tour – this coming amid a series of private face-to-face meetings with NASCAR execs Brian France and Mike Helton to assess the state of the sport and what NASCAR and its teams can do to make for better racing.
   And this isn't the first economic recession Smith has had to weather. In the early 1990s things got rough for a while too, and again about 10 years ago.
   Each time Smith's mantra was that such down times are the perfect opportunity for big companies to target for gaining market share, rather than simply retreat into the shell and wait for the storm to pass.
   Landing major sponsors the past few years, even before the economy turned sour, wasn't easy, given the sometimes seemingly outrageous price points of NASCAR racing. And Smith has always been one of the most aggressive out on the sales trail.
  
  

  Team owner Jack Roush (L), and Geoff Smith, one of stock car racing's best 'big picture' guys, who says there is too much emphasis on TV ratings. (Photo: Autostock)
  

  
Now Smith has become a point-man in the battle to make the marketing case for NASCAR, while the U.S. economy slowly recovers.
   "It's always disconcerting when a debate centers on an incorrect or incomplete fact," Smith says.
    "Here's how 2009's big debate got skewed by an incorrect focus:  During the past year the TV ratings of Sprint Cup race broadcasts were used by the 'sky is falling' faction as conclusive proof not only that the fans were losing interest in the sport but also as proof that fan attendance at the events themselves had declined due to 'waning interest.'
    "A corollary of that proposition claimed the recession was merely a cover to justify that decline. 
    "So suddenly the TV 'fact' somehow proved that lowered track attendance was due to lack of interest.
    "That is simply crazy.
     "Those of us at the race tracks knew from post-race fan surveys at the tracks that the level of satisfaction for those attending races was incredibly high (above the 95th percentile), and that many other obvious economic indicators conclusively pointed to the recession as the reason attendance suffered a 'correction.' 
     "Clearly TV ratings had no direct connection to the recession's impacts."
 
    However TV is such a big item in the American scene (and even more so perhaps, with the collapse of the U.S. newspaper industry) that it magnifies whatever happens to be happening, whether it's in Washington, Daytona, Vancouver, or Tiger Woods' neighborhood.

   TV can be intimidating...but just how significant are TV ratings? (Photo: Autostock)
   

    Smith concedes "TV ratings are totally relevant to the on-going negotiations that sports leagues have with the TV networks." (Check out the current Sprint-Verizon TV ad debate, and the preceding Sprint-AT&T debate, and other big-sports-dollar issues.)
    "So it becomes a commonly-discussed topic between the league and the networks...and all too often the sole topic of discussion in the media.
     "Yet overall TV ratings declines were pervasive throughout television, and NASCAR's declines were less than many other important comparables."
    That's true. In part because NASCAR – though no longer a death-defying sport, happily – can be great 'reality' TV, unpredictable and emotional.
   
    Smith frames part of the whole debate this way: "So the issue really is whether the audience is gone, or whether they went to consume the sport elsewhere."
    Ah, cue mikemulhern.net and all those other alternative media....
    Hmmmm......
    Smith goes on to extrapolate:
     "Most experts agree that the rise in 'viral' communications is having an adverse impact on the core rating.
     "We at Roush Fenway have been arguing that these 'viral' communications add to the totality of the overall audience, from all consumption sources....and (that) it is the totality of all communications media that is the correct measure of the health of the sport, and is the salient point to demonstrate to present and future sponsors."
   Yes, but measuring the impact of all this isn't easy, even though there is a thunderstorm of numbers which can inundate those trying to measure ROI and other aspects of sponsorships and involvement in whatever the venture, stock car racing or car sales or cereal sales.

  "And let's go to the replay." TV's Darrell Waltrip (R) and Brian Vickers (Photo: Getty Images for NASCAR)
  

   Smith argues that the picture needs to be painted more broadly in order to gauge the situation fully:
   "Totality' means measuring not only the TV race broadcast audience, but the audience that follows shoulder-programming (pre-race and post-race, on a seeming myriad of stations), the digital distribution from the networks, NASCAR, from the teams and so forth."
    And Smith points to something that is too frequently overlooked in this particular sport – potential synergies among the various sponsors.
    Read 'piggy-back' marketing.
    It is there for the picking..... 
   "The presence of team sponsors is unique to NASCAR among all the major sports," Smith points out. 
    "The teams themselves distribute media content...and the sponsors of the sport collectively invest tens of millions each year toward TV commercials, digital media, sales promotions, marketing campaigns, intra-company communications, mobile marketing platforms and other forms of communication that is also consumed by the race fan."
    Yes, certainly. (And cutting through the clutter, not just on all those social media forums and 'citizen journalist' websites and Facebook and Twitter, can be daunting....)
    Nevertheless, Smith says what he wants for stock car racing is a new 'ratings' measurement system "that will capture all of these exposures."
    In fact NBC, which spent some $800 million for rights to the Winter Olympics (and which could lose as much as $200 million on these Games) and is thus front-and-center in the Return-On-Investment debate, may be using such a 'total measurement' system to evaluate Olympic coverage.
    So, bottom line, Smith says this TV ratings 'debate' is only a small part of the big picture, albeit a high-profile part, with weekly results anxious awaited.
     Of course that's nothing new – people have been arguing for years, even decades, that TV ratings are far too narrow a gauge of what's really going on in people's heads and through their eyeballs.
    That's one reason that ESPN may have a significant – if still difficult to measure and quantify – edge here, with all it various media 'platforms. ESPN execs like to boast of 'marketing NASCAR' on 17 different, wide-ranging platforms.
    Smith concludes "I am certain if we actually take the energy to measure all the 'communication consumption' that goes on each year, we will find that the TV debate has been centered on a sliver of the overall fact....and that the aggregate communication consumption triggered by TV, radio, team communications, NASCAR communications, sponsor communications, digital communications will be simply astonishing."

 
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