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R. L. Polk & Co.’s Ask the Industry Looks at the Value of Motorsports Marketing Programs

Racing. Fortune magazine has called it the “fastest-growing, best-run sport.” One in three Americans consider themselves fans. And, today, businesses across all industries want a part of the action.Over the past decade, motorsports marketing and racing sponsorships have become among the most successful and lucrative vehicles for building brand awareness, so much so that companies today have executives dedicated solely to building their brands through motorsports marketing efforts. For this week’s Ask the Industry, we asked a number of aftermarket businesses that are active in motorsports marketing and racing sponsorships to tell us what they get out of it and where they see it all heading.

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AKRON, OHIO — Racing. Fortune magazine has called it the “fastest-growing, best-run sport.” One in three Americans consider themselves fans. And, today, businesses across all industries want a part of the action.

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Over the past decade, motorsports marketing and racing sponsorships have become among the most successful and lucrative vehicles for building brand awareness, so much so that companies today have executives dedicated solely to building their brands through motorsports marketing efforts.

For this week’s Ask the Industry, we asked a number of aftermarket businesses that are active in motorsports marketing and racing sponsorships to tell us what they get out of it and where they see it all heading.

Kevin Greven, motorsports marketing manager, O’Reilly Auto Parts, Springfield, MO:

Tell us about O’Reilly’s involvement in motorsports and the benefits you get from your involvement in racing.

Motorsports event sponsorships allow O’Reilly Auto Parts many opportunities to promote our organization on a local and national level and to be involved with local communities and regions throughout the country. It also allows many of our vendors the same opportunities.

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We conduct both local and national product sales promotions, giving away tickets and selling event apparel at discounted prices based on customers’ purchases of certain products during a specific time period. This allows the vendors and O’Reilly’s to see a spike in sales and it also gives our customers a great incentive to shop with us. We do these types of promotions on both the retail and wholesale sides of the company and we see great benefits from all of the media attention.

While we put together our fair share of motorsports promotions, a great deal of promotional activity is put together by the tracks and the other partners involved in the race weekends. Race events give us a natural tie to the local community. In most cases, this is the biggest thing happening in the area and our name is mentioned very frequently. We gain a great deal of respect within the community because they know that we support them and their economy and that our sponsorship is one of the reasons that the event is able to happen. The various race series, from local events like grass roots dirt racing, truck and tractor pulling, and drag racing to national series such as NASCAR and NHRA, also work hard to promote the events and their sponsors. And, in the cases where we are involved with multiple events with the larger organizations, the residuals can last all year long.

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Bruce Johnston, brand manager, WIX Filters, Gastonia, NC:

WIX filters has been very active in motorsports marketing, and has been involved with Joe Gibbs Racing and NASCAR for a number of years. Tell us about some of the benefits your company gets from this involvement.

We got involved with Joe Gibbs Racing because he has name recognition outside of NASCAR. Our engineers worked with Joe Gibbs engineers to develop our racing product, and now close to 100 percent of the NASCAR teams use our product because it is the best product out there. We look at it as having 43 product testing engineers out on the track every weekend.

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The benefit is having all the teams use our products. We try to look at our involvement in motorsports as having a halo effect. If it’s good enough for NASCAR, then the products we make for our customers are as good or better for their passenger cars and light trucks. We look at NASCAR Performance Product status as being a sort of “Official Housekeeping Seal of Approval” for the automotive aftermarket.

Do you take advantage of other benefits such as hospitality opportunities at the races?

Yes. WIX alone only holds one hospitality event at Charlotte, but we normally assist our customers who have hospitality at virtually all the races with sales support, product support, monetary support and our WIX Hummer H2. So we support our customers in their endeavors to host their customers at the races.

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We probably sponsor close to 500 races at the grass-roots level across the country every year. That’s done through our district managers and our customers. That’s one of the reasons NASCAR chose us as a NASCAR Performance Product because we were doing so much at the grass roots level. Another reason we went for NASCAR Performance Product Status was to keep our competitors out of NASCAR.

Ted Lund, marketing manager, The Stanley Works, New Britain, CT:

Stanley recently announced it would take on co-primary sponsorship of Scott Riggs and the No. 10 Stanley Tools/Valvoline Dodge Charger for 10 races with Valvoline Evernham Racing. Why does Stanley participate in motorsports, what are the benefits for your company?

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Sponsorships overall are a great way to build a connection with consumers, and also your customers. It allows you to connect yourself to a powerful brand, such as in our case with Valvoline Evernham Motorsports. Ray Evernham is a three-time Winston Cup winning crew chief with Jeff Gordon and then he started his own team with a great family of drivers. What better association to have as a tie-in to tools? This gives us credibility, especially with regard to our automotive tools.

How we go about activating that is very important. Back at the Indianapolis Motor Speedway we ran one of our special paint schemes this year with Bill Elliot. We also did a press announcement at the track promoting our new Stanley Automotive Tools, and Ray and Bill were an integral part of that announcement. We also featured Stanley Racing on the automotive tools packaging because we’re the Official Tools of Evernham Motorsports.

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You get to take some of those equities and really leverage them to build an association with the consumer. There are 75 million race fans out there. We know they use tools and we know they love racing. When we build that affinity with groups like Ray and his team, we couldn’t ask for a better association.

The drivers themselves offer benefits for us as well. They really speak to all kinds of race fans, which is great for us. Kasey Kahne is kind of the new heartthrob, if you will, and that’s a great way to connect with the younger race fans. Jeremy [Mayfield] is your tried and true, steady performer. He’s in the chase for the second year in a row. And, they both happen to be big tool guys as well. Erin [Crocker] is going to be great for us going forward. The first female on the team, she has a degree from Industrial and Management Engineering from Rensselaer Polytechnic Institute in Troy, NY. So again, a great tie-in with tool-making and tools. It’s a great extension for us.

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Do you take advantage of other benefits such as hospitality opportunities at the races?

Yes, we do. We hosted more than 2,300 customers last year. Hospitality at the track is a great way to build relationships with customers. It really comes down to what you are trying to accomplish. With NASCAR sponsorship, and all sponsorships for that matter, you really have to be able to connect it to all aspects of the business and if it doesn’t, you have to take a step back and take a look at why you are doing it.

Mike Schultz, executive vice president, Federated Auto Parts, Staunton, VA:

Tell us about your company’s involvement in motorsports and the benefits you receive.

At Federated, the major reasons we are involved in racing is because of the number of people we can reach with our message. Racing is now the number-one spectator sport in the U.S. In 2006, Federated will host more than 20 motorsports hospitality events at racetracks across the country. In addition to our association with NASCAR veteran Ken Schrader and road race ace Boris Said, we are increasing our participation in the Busch Series.

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Our professional and DIY customers are dedicated followers of motorsports and this gives us an excellent opportunity to reach them. We expect Federated to have a visible presence in motorsports for many years to come.

Ron Sledge, director, Affinia Motorsports, Ann Arbor, MI:

Tell us about your company’s involvement in motorsports and the benefits you receive.

At Affinia, we believe our customer, the one that throws the box away, associates very closely with auto racing, especially NASCAR. We have a long history in motorsports. Our Raybestos brand has been involved with auto racing since the early 1950s, and has had an affiliation with NASCAR since the 1980s. This association with such a popular sport helps promote brake safety and product innovation both on and off the racetrack. We work closely with NASCAR teams, like Robert Yates Racing, to test friction formulations and chassis products. These relationships allow us to apply advance friction technologies to everyday stopping and give us a common bond with professional repair technicians.

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Rich White, vice president of marketing & member relations, AAIA, and executive director of the Car Care Council, Bethesda, MD:

Over the past year, the Car Care Council was able work with NASCAR to help communicate the “Be Car Care Aware Message.” Has this been successful?

Partnering with NASCAR Performance has been an extremely successful marketing strategy for the Car Care Council and its “Be Car Care Aware” consumer education campaign. Car care information is driven to the consumer from two platforms: pushed via the print and broadcast media and pulled through the repair shop and parts store. The NASCAR fan base offers a ready-made audience of active and enthusiastic car owners, technicians, parts counterpersons and shop and store owners/managers. On the flip side, NASCAR has been supportive of the industry’s consumer outreach campaign from the very beginning through millions of dollars of its valuable media properties, space and time to complement its aftermarket licensees cross marketing efforts to better educate consumers about proper vehicle maintenance and care. Leveraging the disciplines, excitement and popularity of racing to drive home the safety, performance and dependability implications of vehicle maintenance is a natural.

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Summary by Amy Antenora, managing editor:

The proof is in the pudding, as they say.

The statistics we’ve uncovered only help to support the glowing reports above. Just last week, Indy Racing League reported its series season finale saw increased ratings of 293 percent, compared to 2004, according to Nielsen Media Research. Its season-long ratings on ESPN also went up by 33 percent.

Seventy-five million Americans follow NASCAR today, making it second only to the NFL for top-rated sports on network television. With such massive viewership, it didn’t take long for U.S. businesses to catch on. According to NASCAR, more Fortune 500 companies participate in NASCAR than any other sport, with more than $2.1 billion in licensed product sales in 2003.

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The racetracks themselves are also working to promote themselves as a viable business option, offering corporate hospitality opportunities, glamorously dubbed ‘motorsports entertainment.’ In September, the Indianapolis Motor Speedway held its second Corporate Entertainment Open House, showcasing the opportunities available at all sorts of budgetary levels for businesses to entertain guests on practice days, qualifying days and race days.

Aside from all the obvious reasons that make racing partnerships so popular for businesses today, there is another unstated benefit that you may not have considered — the ‘cool factor.’ With the improved reputation and diversification of motorsports, this industry is now reaping the benefits. As racing sheds its former male-dominated and outdated image, the aftermarket’s image takes on a new shine as well. This in turn could lead to another door opening if we would only walk through it: The chance to recruit more young, talented professionals, from technicians and engine builders to engineers and marketing executives, into this industry by utilizing the newfound ‘hipness’ of motorsports.

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