Military branches wrestle with cost-effectiveness of NASCAR sponsorships

Tom Pennington/Getty Images - The National Guard remains bullish about its $30 million backing of NASCAR’s most popular driver, Dale Earnhardt Jr., although it’s pulling out of motorcycle racing (a $4 million annual expense) next season.

Less than a decade ago, virtually every branch of the military sponsored a NASCAR team.

With wars raging in Afghanistan and Iraq, it seemed a sure-fire way of recruiting the next generation of soldiers, given NASCAR fans’ passion for the sport and patriotic bent.

So in turn, the Army, Air Force, Marines, Navy and National Guard joined the parade of Fortune 500 companies advertising on the hoods of stock cars that doubled as high-octane, hair-raising billboards. And their presence extended onto racetracks’ souvenir midways, as well, where various branches of the service erected elaborate information booths to woo prospective recruits.

But the military displays in the Fan Zone of Dover International Speedway have been shrinking of late, with the National Guard the only prominent player remaining. And several branches of the service have canceled or scaled back their NASCAR sponsorships.

The Army this season dropped its $8.4 million sponsorship of Ryan Newman’s No. 39 Chevrolet, ending a 10-year relationship with the sport. The Marine Corps and Navy also have bowed out of stock-car racing, while the Air Force this year renewed its deal to be Richard Petty Racing’s primary sponsor on two strategic races: those run on the Memorial Day and Fourth of July weekends.

The National Guard remains bullish about its $30 million backing of NASCAR’s most popular driver, Dale Earnhardt Jr., although it’s pulling out of motorcycle racing (a $4 million annual expense) next season.

For the most part, the military drawdowns in sports-sponsorship are the result of belt-tightening in the face of the nation’s trillion-dollar deficit. In the case of the Army, they also reflect a shift in thinking about the most cost-effective way of reaching young adults 17 to 24, the target demographic for military recruiters.

And if some in Congress have their way, the military will be barred from spending money on sports sponsorships altogether. A move to do just that was narrowly rejected by the House of Representatives last July, which voted 216-202 against an amendment that would have banned military spending on NASCAR, NHRA drag racing , Ultimate Fighting, professional wrestling and bass fishing.

“We’re in a fiscal crisis here,” Rep. Betty McCollum (D-Minn.) argued at the time. “Bass fishing is not national security.”

A member of the House Appropriations Subcommittee on defense and co-sponsor of the amendment, McCollum is expected to introduce the amendment again in the coming weeks, when the House takes up the 2014 defense bill.

On the other hand, Rep. Richard Hudson (R-N.C.), whose district includes Lowe’s Motor Speedway and the headquarters of many of NASCAR’s top race teams, believes stock-car racing is fertile and logical ground for military recruiters.

“Who is our best target audience? NASCAR fans, who are some of the most patriotic sports fans,” Hudson said, citing a survey commissioned by Hendrick Motorsports that found 90 percent of Army National Guard soldiers who enlisted or re-enlisted from 2007 to 2013 said they had been exposed to the Guard through recruiting or retention materials that incorporated NASCAR. “When you’ve got a star like Dale Jr. who’s wearing ‘National Guard’ on his jumpsuit on TV, you can’t put a price on the return for your investment dollars.”

Marcus Jadotte, NASCAR’s vice president of public affairs, said he is less concerned about the downturn in military sponsorship, which he views as part of a natural business cycle, than he is about efforts to single out NASCAR, or sports in general, as inappropriate or ineffective vehicles for marketing.

“Those who are charged with the responsibility of recruiting and retention in the military know best how to effectively allocate their budget,” Jadotte says. “We believe that those decision-makers should be allowed to continue to make good decisions to meet their goals.”

According to National Guard spokesman Rick Breitenfeldt, such trackside marketing, as well as other campaigns tied to Earnhardt and his No. 88 Chevy, are “the bread and butter” of its NASCAR sponsorship.

“We love having our name on the side of Dale’s car, but it’s the things that go with it that really are of most value to us,” Breitenfeldt said.

That includes the seven appearances Earnhardt made on behalf of the Guard at high schools this past year. It includes the three No. 88 “show cars” that the Guard takes to recruiting events in states that teem with NASCAR fans, but don’t host a NASCAR race. And it includes the NASCAR merchandise sold last year branded with Earnhardt Jr.’s likeness and the National Guard logo, exposure Breitenfeldt believes is incalculable.

The Army, by contrast, has abandoned NASCAR, but is continuing its 10-year sponsorship of the NHRA’s Tony “The Sarge” Schumacher, partly because drag racing’s audience skews a bit younger than NASCAR’s. The Army also will continue sponsoring high school football’s All-American Bowl. And it’s investing in events such as robotics competitions and groups with a diverse recruiting pool, such as the National Society of Black Engineers and the League of United Latin American Citizens.

With its marketing and advertising budget cut by more than half in the last five years, from $423 million in 2008 to roughly $190 million this year, the Army is shifting away from traditional TV ads and investing more in social media.

Enlisting in the military is a far more complex decision than the sort consumers make daily — deciding between Budweiser or Miller, for example, or lunch at Subway versus McDonald’s. In those cases, logos on a racecar circling a track 200 times might be persuasive. Enlisting in the Army or Air Force involves an extended conversation with prospective recruits and the adults who influence them.

“We can draw conclusions about the number of leads that are produced by one of the races, but the conversion rate to an enlistment is a lot more complicated than just showing up at a race,” said John Myers, director of marketing for the U.S. Army Marketing and Research Group. “It is a journey — an information journey and a decision journey that the parents and the prospects engage in, starting with the first opportunity to learn about the Army.

“If anybody said, ‘We can prove that we had X-number of contracts that came from our sponsorship,’ it might be a little bit of a stretch.”

 
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