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Roush Fenway Racing Tries New Sponsor Pitch

Forbes, May 19, 2011

By Tom Van Riper

Roush Fenway Racing thinks its found a new formula for growing Nascar sponsorship revenue.

With the economic slump of recent years has come pressure on business executives to justify spending on sponsorships and other sports marketing. The intuitive benefits derived from reaching big audiences and associating yourself with the positive vibes of an audience’s favorite sport or team was no longer cutting it. For many, the bottom line became, well, the bottom line – how to quantify the return on investment from a sports marketing spend.

Seeing that writing on the wall, Roush Fenway is paying IEG, the sponsorship consulting company, for a new methodology designed to lure more sponsorship dollars by showing prospective customers exactly how they’ll earn their dollars back. The proprietary system calls for reps from Roush Fenway and IEG to sit down with potential sponsors and walk through a process of setting a specific objective and then tailoring the sponsor activity to meet it. Example: a specific goal of increasing retail sales in a given region might result in special Nascar packaging or driver appearances in stores in that area.

“Our prospective sponsors see the use of a third party as a big help,” says Steve Newmark, president of Roush Fenway Racing, whose driver stable includes David Ragan, Gregg Biffle and Carl Edwards. He says Roush didn’t get hit too significantly in the sponsorship slump of recent years, thanks to the timing of many long term contracts. But inking renewals going forward means spoon feeding their clients everything from setting objectives to measuring ROI against them.

“We think this will be a shift in our sport,” says Newmark, whose big sponsors include 3M, UPS, Scott’s and Diageo. “Sponsorships are the life blood of our business.” With track attendance and T.V. viewership down in the previous couple of years (though early 2011 brought a slight rebound), Nascar’s attractiveness for a sponsor – a long season and the ability to embed product names right into the action on cars and driver uniforms – takes on even more importance. But those basic assets are no longer enough. In the new sports economy, quantify it or lose it.