What have you done for me lately? Performance and ...

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(if two names, a driver change occurred between years). 2004 2005. Alltel/Mobil. Ryan Newman. 25. 29. Betty Crocker – Cheerios. Jeff Green. 9. 10. Budweiser.
Int. J. Sport Management and Marketing, Vol. 8, Nos. 1/2, 2010

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What have you done for me lately? Performance and brand identification in NASCAR J. Brian O’Roark* Department of Finance and Economics, Robert Morris University, 6001 University Blvd., Moon Township, PA 15108, USA Fax: +1-412-262-8494 E-mail: [email protected] *Corresponding author

William C. Wood Department of Economics, James Madison University, MSC 0204, Harrisonburg, VA 22807, USA Fax: +1-540-568-3010 E-mail: [email protected]

Larry DeGaris School of Business, University of Indianapolis, Esch Hall 052F, 1400 East Hanna Avenue, Indianapolis, IN 46227, USA Fax: +1-317-788-6140 E-mail: [email protected] Abstract: In endorsement and sponsorship research, the connection between athletes’ performance and brand identification is sparse. In the USA, the National Association of Stock Car Auto Racing (NASCAR) is sponsor-driven. While the old line in NASCAR was ‘win on Sunday, sell on Monday’, the hiring and firing of a driver is often steered by the driver’s personality and ability to act in the role of product spokesman. This study uses a two-year sample of 1,000 US fans surveyed by telephone to test whether performance on the track leads to increased visibility of a sponsor. We find that while brand identification is more likely for consistent finishes, driver and sponsor continuity play a more significant role in establishing a link between NASCAR fans and sponsors. Keywords: racing; motorsports; National Association of Stock Car Auto Racing; NASCAR; US stock car racing; brand identification; sponsorship; sports marketing; sponsor visibility; athletic performance; sports fans.

Copyright © 2010 Inderscience Enterprises Ltd.

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J.B. O’Roark et al. Reference to this paper should be made as follows: O’Roark, J.B., Wood, W.C. and DeGaris, L. (2010) ‘What have you done for me lately? Performance and brand identification in NASCAR’, Int. J. Sport Management and Marketing, Vol. 8, Nos. 1/2, pp.131–144. Biographical notes: J. Brian O’Roark received his PhD from George Mason University and was an Instructor in Economics at James Madison University before moving to Robert Morris University. He is currently an Associate Professor of Economics and Co-Director of the Leonard M. Kokkila Centre for Economic Education. He has authored other articles in sports economics and public finance. His current academic interests include sports economics, public finance and economic education. William C. Wood received his PhD from the University of Virginia and has held faculty positions at Vanderbilt University, the University of Virginia and at Bridgewater College. Formerly a Staff Writer for the Associated Press, he is currently a Professor of Economics and Director of the Centre for Economic Education at James Madison University. He is the author of three books and a wide range of scholarly papers in applied microeconomics. His current academic interests include sports economics, industrial organisation, behavioural finance and economic education. Larry DeGaris is the President of Sponsorship Research & Strategy (SRS) and an Associate Professor of Marketing at the University of Indianapolis. SRS is a research-based sponsorship and sports marketing consultancy firm. He has held senior-level research positions at Ogilvy PR in New York and the Bonham Group in Denver. He received his Doctorate in Sport Sociology from the University of Connecticut in Storrs and his BA in Intellectual History from Wesleyan University in Middletown, CT.

1

Introduction

The National Association of Stock Car Auto Racing (NASCAR) fans are notoriously loyal to firms who sponsor the sport. Hagstrom (1997, p.60) cites survey results in which ‘over 40% of NASCAR’s fans purposely switched brands when a manufacturer became a NASCAR sponsor’. With a reported fan following of 75 million in the USA (Marinucci, 2006) viewing the 36 Sprint Cup1 races, sponsoring one of the 43 drivers with a company’s logo on the hood of their car has the potential to reach customers who might never otherwise think about the products a firm sells.2 To become connected to this fan base, a firm has essentially two paths it can follow. The more expensive route, and the one examined in this study, is to lay out the $10 to $20 million necessary to appear as the primary car sponsor (Caraviello, 2007). This level of spending reserves the hood of the car for the company’s logo or advertisement. The hood is the prime commercial real estate in stock car racing, where unlike Indy Car, or Formula 1, there is ample marketing space. The alternative is to forego the formalities of directly sponsoring a team and become a secondary sponsor. The hood, after all, is only one part of the car. The fenders, rear deck and quarter panels also offer space on which to post information about sponsors. For instance, Coca-Cola is the official soft drink of NASCAR. While not doling out the same amount of money for a prime hood location, Coke has chosen to sponsor 12 drivers as the ‘Coca-Cola racing family’ (Coca-Cola Company, 2007). Coke has less

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visible ad space on cars, but spreads its money over more drivers. Because of its role as the official soft drink of NASCAR, Coke bottles appear in the hands of the Coke family drivers whenever they are interviewed at the end of a race. Regardless of which path a firm takes, these rolling billboards provide firms with the advertising space to reach tens of millions of consumers in the hope that fans will change their buying patterns. The stars of NASCAR are the drivers, and unlike other sports with the possible exception of golf, the drivers can perform at a high level for many years. The minimum age for a driver on the Sprint Cup circuit is 18, but there is no maximum age. For instance, in 2007, 72-year-old James Hylton tried to qualify for the Daytona 500, NASCAR’s biggest race. While he failed to make the race, he did average 179.6 miles per hour (Associated Press, 2007). Fans can follow their favourite drivers for decades. In 2004 and 2005, there were nine drivers who had been in the sport for more than 20 years.3 This can help to establish a connection between athletes and fans, and consequently, athletes, fans, and sponsors for a substantial portion of one’s adult life. This is important because drivers are more than pilots. They are also pitchmen. They endorse their sponsor’s products on radio, television and in print. They appear at company events for employees and clients. They are also celebrities who appear on television talk shows and in the tabloids. For a firm that wants to be part of NASCAR, the partnership with a race team goes beyond the financial contribution to the team. The driver reciprocates with help on the marketing front, and if successful, can help the firm build a lifelong customer base. Firms are spending hundreds of millions of dollars to sponsor teams in a sport with a combined viewership in 2005, according to Nielsen television rankings cited by Coble (2007), of nearly 215 million. NASCAR ranks behind only American football in terms of fan support in the USA (Weeks, 2004). However, NASCAR is beginning to spread beyond its US borders. The second tier of NASCAR, the Nationwide series, already runs an annual race in Mexico. Japanese automaker Toyota started sponsoring stock car teams in 2007, after a three-year warm up in the NASCAR truck series. The signing of Colombian-born Juan Pablo Montoya, who jumped from Formula 1 racing to drive full time in NASCAR, portends a more active push into Hispanic communities. Other non-US born drivers who have found success in Indy Car and Formula 1 racing, including Patrick Carpentier (Canada), Dario Franchitti (Scotland), and most recently Marcos Ambrose (Australia), have also have made the leap to NASCAR. It seems NASCAR still has a lot of growth potential. An adage from the early days of NASCAR was ‘win on Sunday, sell on Monday’. The principle has evolved from selling cars to selling less automotively related products such as hardware stores, cell phone plans and candy. For a firm, associating with NASCAR may be enough to justify the dollars spent on sponsoring a team. In 2004 through 2006, 21 different drivers won the 108 races run in the Sprint Cup series, out of 114 assorted drivers who entered.4 Does winning matter to firms? More importantly perhaps is the question: does winning matter to fans? Do fans identify the products sponsoring winning racers as better and change their buying behaviours accordingly or does the rabid loyalty of NASCAR fans lead them to buy Little Debbie snack cakes, rather than rival Hostess, simply because Little Debbie sponsors a NASCAR team and despite the Little Debbie team having had only five top ten finishes (with the best finish of seventh place) in 72 races while sponsoring the team?

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The purpose of this paper is to examine whether there are discernible trends in the link fans make between NASCAR sponsorship and on-track success. This connection is missing in much of the current academic literature on sports marketing. A second question arises, however. Since drivers are the stars of the show, can a longer driver/ sponsor relationship help foster brand identification? The paper proceeds as follows: Section 1 provides a brief overview of endorsement and sponsorship studies, Section 2 covers methodology, Section 3 provides details of the results, and Section 4 concludes.

2

Literature review

While NASCAR is a team sport, it is unique in its reliance on a single figure, the driver, to generate sponsorship dollars. The drivers are the stars. Part of the rationale behind the intense involvement as company front man is the rabid support fans exhibit toward firms who sponsor NASCAR. Getting a firm’s name attached to NASCAR is accomplished most directly through the visibility of the driver and his car and achieving this relationship is a way of establishing almost immediate product loyalty. In the literature on endorsements at large, the impact of celebrity endorsers is somewhat mixed. Atkin and Block (1983) and Freiden (1984) detail the effectiveness of celebrities, reaching the conclusion that celebrity does indeed matter positively for purchasing behaviour and that celebrities are generally viewed as trustworthy. Contrary to this, however, Menon et al. (2006) warn that consumers’ recall of product names is not increased by the use of sports or any other kind of celebrities. More problematic for firms is the work by Till and Shimp (1998) who show that bad press for an athlete actually lowers the consumers’ evaluation of the brands being endorsed. NASCAR is no exception to this. After a 2005 incident of reckless driving, former champion Kurt Busch, who was already on his way to another team, was fired for the remaining two races of the season. Expanding on the link between celebrities and sales, the match-up hypothesis, described variously by Kahle and Homer (1985) and Kamins (1990), reveals that endorsers are more effective when there is a reasonable fit between them and the product they are pitching. Following this line of thought, Till and Busler (1998) identify expertise of the endorser as more valuable than even the physical attributes of an endorser. Thus, at best, it can be concluded that simply having a celebrity endorse a product does not guarantee success in the marketplace. When it comes to sponsoring an athlete, team or event, firms are advised to spend judiciously. Looking at athletic apparel firm Adidas, Ryssel and Stamminger (1988) note that: “Successful sponsorship … is only successful if one succeeds in harmonizing the inner images of a sponsor brand with the sponsored star. Sponsorship which is only based on the athlete’s present popularity, and does not consider his personality, will not bring the success desired by the sponsor on a medium- or long-term basis.” (p.116)

Furthering this position on personality fit, Musante et al. (1999) find that: “A good personality match may serve both awareness and image functions as a contribution to brand equity. In this case, a sponsorship that maintains a good personality match as well as a good demographic match literally stands to achieve two benefits for the price of one. The value for the sponsorship dollar

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is increased as the sponsorship is used as an identity enhancing vehicle as well as a name awareness tool.” (p.45)

The ability to associate events with their sponsors is another issue facing firms. Otker and Hayes (1987) show that recall of advertising boards prior to the 1986 World Cup increased for those firms who sponsored the World Cup and decreased for those who did not. If the sponsor had a particularly low profile prior to the Cup, recall was increased nearly 400%. Additionally, Turley and Shannon (2000) note that sponsor recall is limited in a captive situation such as a sports arena. Frequency of exposure, however, is positively related to recall, purchasing intention and purchasing behaviour. Thus, they conclude, long-term commitments are recommended for maximum return on the sponsorship dollars. Where the money hits the road, so to speak, is whether or not the endorser or the sponsorship leads to increased profitability. Analysing stock prices of firms, Agrawal and Kamakura (1995) show that 110 announcements of celebrity endorsements positively affected those firms’ stock prices. Another study by Pruitt et al. (2004) examines 24 firms who announced sponsorships with NASCAR. Reviewing the stock market returns before and after declaring the partnerships, the authors show a strong, positive relationship on stock returns of firms who specifically announced NASCAR sponsorships. Fan loyalty to NASCAR sponsors among professional sports in the USA is virtually unrivalled. Fans buy products that are connected with NASCAR even if they are promoted by drivers who are rivals to the fan’s favourite. Hagstrom (1997, pp.59–60) states that: “Not only are stock car fans aware of which companies sponsor their sport, they are fiercely loyal to those companies. Performance research discovered that three out of four stock car racing fans consciously purchase products of NASCAR sponsors. In comparison, only half of tennis fans and golf fans have that same loyalty. As for the fans of Major League Baseball, the National Basketball Association and the National Football League, the performance research results indicate that roughly one in three – less than half the rate of NASCAR fans – purchase the products of their sport’s sponsors.”

Fans even link the success of NASCAR to their own purchase of products. Napoli (2003) reports that ‘the figures indicate that NASCAR fans are three times more likely than fans of other sports to buy products of sponsors’. Brett Yormark, the vice-president of corporate marketing in NASCAR’s corporate offices in New York, is quoted by Napoli (2003) as saying, ‘our teams and drivers have done a wonderful job communicating to the fan that the more Tide they buy, the faster Ricky Craven’s going to go’. An independent study by Green Flag Marketing (2008) confirms these numbers. Thus, becoming synonymous with NASCAR justifies the $10 to $20 million a year firms pay out to fund a race team as a primary sponsor. Yet, missing among all the talk of loyal fans is any empirical support of the old NASCAR maxim. If sponsoring a team was all it took to ensure marketplace success, why would a firm not become a sponsor? If winning is important, sponsors should be lining up outside the successful motor shops of Joe Gibbs Racing, Hendrick Motorsports and Roush-Fenway Racing, who won 12 of 13 NASCAR championships between 1995 and 2007. In other sports, there are reports by Peers (1998), who reflects on the failure of figure skaters to cash in on the 1998 Olympic success, and Dabrowski (1996) who claims that the image of athletes is more important to firms than their actual on-field

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performance. These findings seem to fly in the face of conventional NASCAR wisdom. Likewise, examples of funding potential rather than performance are myriad. LeBron James’ $90 million deal with Nike in 2003, before he had played a single National Basketball Association game, and golfer Michelle Wie’s endorsement deals, without having won a tournament, are just two illustrations. Peers and Dabrowski’s articles are more anecdotal and less empirical. We seek to test the connection between driver performance and brand recognition in NASCAR by providing a more refined model of the connection between athlete performance and brand recognition.

3

Methodology

To collect information on fan perceptions of sponsors, a pool of potential subjects was drawn from a panel of NASCAR enthusiasts provided by a national marketing firm. These subjects were then further screened for fan avidity until we had a national sample of 1,000 subjects who at some level self-identified as NASCAR fans. The survey was conducted during the month of December in both 2004 and 2005. This alleviated the problem of shifting fan loyalties during the season. None of the subjects appeared in both years’ surveys. All interview subjects were 18 or over, with an average age of 51.13. Of the respondents, 59% were male and 41% were female. The average income of the spondents was $58,948.21. The average educational attainment of the sample was 13 years or slightly more than a high school education. On average, the respondents watched over 25 of the 36 races on television. The respondents also seem to be keen on corporate involvement in NASCAR, reporting an average score of 4.16 out of five to the question of whether they liked the amount of corporate participation in the sport. Finally, these fans self-report on average as more supportive than the average fan. On a scale of 1 to 3, with 1 being a ‘casual fan’, 2 being an ‘average fan’ and 3 being a ‘big fan’, the sample scores a 2.35. Descriptive statistics for the sample are displayed in Table 2. During the telephone interviews, a direct measure of sponsor identification was constructed. The respondents were asked, ‘when you think of companies or brands that sponsor NASCAR, which names come to mind?’ Subjects were not presented with a list of firms, but were prompted by the questioner to name as many as they could, up to 14. A firm was top of mind if they were named by the respondent. These answers form our ‘top of mind’ dependent variable (BRANDID). BRANDID itself is a measure of the percentage change from 2004 to 2005 in the number of times a firm appeared as the top of mind. For instance, if Kellogg’s was named 20 times in 2004 as a top of mind firm, and then named 30 times in 2005, it was assigned a value of .5 since the number of times this firm was mentioned as the top of mind increased by 50%. The average number of firms identified as the top of mind per person was 3.11. The results we present use two different measures of the dependent variable BRANDID. We test both the top response given by the subject and the top three responses given. Too few respondents named more than three to be statistically useful. Fifty-six different firms were named as the top of mind sponsors, although of these, only 38 were primary car sponsors. The remaining 18 sponsors named were firms who are involved with NASCAR in some capacity, but are not primary sponsors of specific teams. For instance, Ford, Chevrolet, Coca-Cola and McDonald’s were all named multiple times, yet none of

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these companies’ logos appear on the hood of a car. The non-primary sponsors named are all affiliated with NASCAR in some capacity, sometimes as secondary sponsors, as an official product of NASCAR, or as a manufacturer or input supplier. The explanatory variables were mainly culled from past race results as identified on http://www.nascar.com. Using a percentage change in these variables from 2004 to 2005 allows us to determine the impact of performance changes over the two years on whom the subjects report as their top of mind companies. We are looking to determine the impact of the teams’ performances on the ability of fans to identify them as a top of mind firm. Thus, we condense the information from the survey into the variables discussed below and pair that information with the relevant team. For instance, in 2004, 237 of the respondents to the survey identified Budweiser as their number one top of mind NASCAR sponsor. Thus, this is assigned to the 2004 BRANDID variable for the Budweiser-Dale Earnhardt, Jr. unit of analysis. We do not include specific demographic data for the respondents in our model because some of the firms are identified by such a small percentage of the subjects that any conclusions reached on demographic features would be suspect. Instead, we focus on two sets of variables. The first set includes driver and team characteristics. The second set is made up of measures of driver success.

3.1 Driver and team characteristics In order to control for the likelihood of a respondent identifying a firm as the top of mind, we include a measure of past driver performance. We take the percentage change of the average finish of a driver between past years. We include a change from 2002 to 2003 (AVGFIN0203) and from 2003 to 2004 (AVGFIN0304). In order to use this as a reliable measure, we only include this variable if the driver completed at least 30 races in a season. Younger drivers obviously do not have the long track record from which to examine the impact of past success, so we use this measure judiciously and in various combinations with the other control variables as including this variable does reduce the number of observations in our sample of drivers. It is important, however, to include some measure of past performance, as fans are more likely to remember the sponsor of a driver who has performed well previously. We also include PCTLAP as a measure of the percentage change in the number of laps a driver completed between 2004 and 2005. The more laps a driver completes, the more often his rolling billboard can be seen. To deal with the issue of driver consistency, we include YEARINCAR, which is a measure for the number of years a particular driver has been in a specific sponsor’s car. This is different from total years of driver experience. We use the years in the car to capture fan loyalty over time to a driver and sponsor combination. TIMESPS measures the number of times a primary sponsor actually appeared on the hood of a car in a particular year. Due to the cost of sponsoring a race team, a primary sponsorship might be shared with a few one-race only sponsorships, such as a movie premier or a regional sponsor. Thus, this number is not consistent from one team to another or from year to year. The minimum number of times the primary sponsor was on a hood in any one year was 14, while the maximum was for all 36 races. Only one team, the NAPA Auto Parts-Michael Waltrip (driver) team, ran all 72 races over the two years of our study without changing sponsors for even one race. This variable is used as a percentage change from one year to the next over the two years of the sample. Finally, we include a

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measure called DRIVCHGE. This is a dummy variable indicating whether the team sponsored by a firm changed its driver at any time during the two years. This might influence the likelihood of a fan identifying a primary sponsor simply because their favourite driver has been fired or retired. Five of the 32 teams changed drivers over this time: Cingular, Kellogg’s, Kodak, Net Zero and Tide.

3.2 Measures of driver success Driver success was measured in two ways. The first looks at the percentage change in average finish over the two years. This is captured in the variable AVGFIN. We also look at the percentage change in points scored by a driver as shown in POINTS. There is one difficulty in comparability over time with this particular variable. In 2004, the way points accumulated in NASCAR changed. In 2004, NASCAR began the ‘Chase for the Cup’. The first 26 races are essentially a playoff. The top ten drivers, changed to the top 12 in 2007, and anyone else within 400 points of the leader, are entered into a final ten-race competition among themselves for the championship. Points are recalibrated for the drivers in the ‘chase’, with the leader in points at the end of 26 races getting 5,050 points. The second place driver is given 5,045 points and every subsequent driver receives five fewer points. Regardless of how they finish the remainder of the season, the drivers in the ‘chase’ ensure themselves the top 12 positions at the end of the year. (Points continue to accumulate at the old rate for drivers that fail to make the Chase for the Cup.) Thus, the 2004 points are not comparable with those of earlier years. However, a calculation of 2004 and 2005 points under 2003 rules was available from a widely followed fan website http://www.Jayski.com. To maintain continuity among drivers who were and were not in the ‘chase’, we include the percentage change in points under the old system. In order to avoid multicollinearity issues, AVGFIN and POINTS were run in separate versions of the model. A correlation matrix was constructed that revealed significant correlation between these variables. This necessitated running the variables in separate versions of the model. Finally, we also include a variable called WRECKS. Cars and drivers who wreck out of races often get repeated exposure as replays of the accident loop during a lull in the action. Using the WRECKS variable, therefore, allows us to capture the potential extra television exposure for a driver and his sponsor from a wreck during competition. This is a percentage change in the number of wrecks over the two years as identified by USA Today’s NASCAR wrecks database.

3.3 Unit of analysis Our unit of analysis includes 32 teams sponsored by the same firm over the two years of our survey, 2004 and 2005. A list of these teams, their drivers and the number of top of mind responses they received is listed in Table 1. These teams were chosen due to their constancy during the two years of the sample and the number of races in which they competed regardless of the sponsor (35.6 of the 36 on average). While 43 race teams competed at every race over these years, there were new sponsors and some teams who competed in only a few races during the course of the year. It would be impossible to create a percentage change for these teams, so they were not included. Unfortunately, despite the continuity of the Georgia Pacific/Brawny paper towels sponsorship for driver Kyle Petty, they had no top of mind responses. Thus, we could not create a percentage

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change variable for them, as it would require dividing by zero, so the final sample size for our unit of analysis is 31. Table 1

Details of the firm – team relationship in our study

Firm – product Alltel/Mobil Betty Crocker – Cheerios Budweiser Caterpillar

Top of mind responses*

Driver (if two names, a driver change occurred between years)

2004

2005

Ryan Newman

25

29

Jeff Green

9

10

Dale Earnhardt, Jr.

444

465

Scott Wimmer

14

7

Robbie Gordon – Jeff Burton

30

9

Sterling Marlin

25

24

Matt Kenseth

29

31

Dodge Dealers

Kasey Kahne

22

31

Dodge Dealers

Jeremy Mayfield

22

31

DuPont

Jeff Gordon

238

230

Georgia Pacific – Brawny

Kyle Petty

0

0

Cingular Wireless Coors DeWalt Tools

GMAC

Brian Vickers

6

2

General Motors – Goodwrench

Kevin Harvick

47

37

Havoline – Texaco Home Depot Interstate Batteries Kellogg’s Cereal Kodak Lowe’s Home Improvement Warehouse

Jamie McMurray

8

18

Tony Stewart

226

279

Bobby Labonte

25

28

Terry Labonte – Kyle Bush

40

30

Brendan Gaughan – Travis Kvapil

6

3

Jimmie Johnson

137

143

M&M Mars

Elliott Sadler

66

74

Miller

Rusty Wallace

71

84

Motorcraft NAPA Auto Parts National Guard/Subway Net Zero Internet Pfizer – Viagra Sharpie Target Procter and Gamble – Tide U.S. Army

Ricky Rudd

3

5

Michael Waltrip

54

46

Greg Biffle

14

13

Ward Burton – Mike Bliss

4

1

Mark Martin

143

128

Kurt Bush

17

14

Casey Mears

9

10

Ricky Craven – Bobby Hamilton Jr.

62

66

Joe Nemechek

12

8

United Parcel Service (UPS)

Dale Jarrett

93

83

Valvoline

Scott Riggs

33

15

Note: *These are the summations of the top three responses given by participants in the survey.

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Table 2

Descriptive statistics on NASCAR fans 2004 sample mean

2005 sample mean

Combined sample mean

p-value on mean difference

50.705 (3.635)

51.568 (2.167)

51.134 (2.997)

0.215

$60,167.66 (1.380)

$57,551.44 (1.395)

$58,948.21 (1.388)

0.093

Years of education

13.187 (1.309)

12.972 (1.341)

13.081 (1.326)

0.523

Races watched

25.464 (11.538)

25.455 (11.344)

25.459 (11.438)

0.076

Corporate participation attitude

4.194 (0.937)

4.124 (0.862)

4.159 (0.900)

0.082

Male

0.583 (0.493)

0.597 (0.491)

0.590 (0.492)

0.525

Big fan

2.357 (0.706)

2.346 (0.720)

2.352 (0.713)

0.730

1,000

1,000

Characteristic Age Income

Sample size Note: Standard deviations in parentheses

We utilise an ordinary least squares regression model to test the impact of our control variables on the variable of interest BRANDID. The model takes the following form: BRANDID = β0 + ΦX + εi

(1)

BRANDID is the dependent variable of interest measuring the top of mind brand awareness. X represents a vector of control variables as discussed above. β is the constant in the equation and ε is the error term (estimates corrected for heteroskedasticity using the White method).

4

Results

The regression results are displayed in Table 3. Each column addresses a variation on the model. It is important to remember that the top of mind firms are not all car sponsors. Nonetheless, these firms are still identified as NASCAR sponsoring firms in the survey. The results that follow are therefore not zero-sum. It is possible for the percentages of all sponsors to increase from one year to the next in terms of brand identification as the respondents may report a non-primary sponsor as a top of mind sponsor in 2004, whereas fans responding in 2005 report a primary sponsor as their top of mind firm. Columns 1–4 in Table 3 use the single top of mind firm as the dependent variable. Columns 5 and 6 use the sum of the top three firms a respondent named. As noted earlier, this expands the scope of the study to go beyond simply naming the sponsors of the most popular drivers.

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Regression results (1)

(2)

(3)

(4)

(5)

(6)

YEARINCAR

0.013 (0.724)

0.011 (0.705)

–0.001 (–0.089)

0.000 (–0.013)

–0.011 (–0.955)

0.000 (0.018)

TIMESPS

1.272** (2.265)

1.317** (2.695)

1.146* (1.743)

1.208** (2.021)

0.937** (2.059)

0.814 (1.562)

DRIVCHGE

–0.628** (–2.392)

–0.647** (–2.399)

–0.886** (–2.500)

–0.819** (–2.270)

–0.754*** (–4.133)

–0.414* (–1.919)

0.134 (0.875)

0.206 (1.464)

0.209 (1.286)

0.250 (1.573)

0.050 (0.473)

0.039 (0.359)

–0.078 (–0.333)

–0.008 (–0.028)

WRECKS AVGFIN0203 AVGFIN0304 PCTLAP

–3.305 (–1.686)

OLDPTS0405

1.372 (1.580)

AVGFIN0405 C R-squared Adjusted R-squared F-statistic Observations

–4.074* (–1.965)

0.848** (2.214)

0.673** (2.084)

–0.199 (–0.689)

–0.254 (–0.620)

–2.547 (–1.348)

–3.096 (–1.600)

–5.785*** (–3.536)

–2.755 (–1.368)

1.187 (1.350) –0.918*** (–2.889)

2.889*** (3.569) –0.740*** (–2.553)

–0.496 (–1.363)

0.176 (1.116)

0.227 (1.495)

0.319** (2.119)

0.329** (2.287)

0.184 (1.420)

0.071 (0.539)

0.392

0.460

0.499

0.536

0.646

0.487

0.240

0.325

0.304

0.356

0.443

0.193

2.583**

3.412**

2.557**

2.971**

3.189**

1.660

31

31

26

26

23

23

Notes: Dependent variable: percent change in brand identification – BRANDID In columns 1–4, the percent change in brand identification is for only the first firm provided by survey participants. In columns 5 and 6, the percent change in brand identification is for the summation of the top three firms provided by participants. ***Significant at the 1% level **Significant at the 5% level *Significant at the 10% level

The TIMESPS variable has the expected positive sign and is nearly always significant. This indicates that the more often a firm’s logo appears on the hood of a car, the more often that firm will be named as a top of mind sponsor. The magnitude of the coefficient indicates that the top of mind brand identification increases between .91% and 1.32% for a 1% increase in the number of times a firm appears as a primary sponsor. DRIVCHGE has the expected negative sign, indicating that changing a driver will reduce the brand awareness of the primary sponsor. This variable is significant in all variations of the model. If a driver change occurs, this reduces the top of mind brand awareness by nearly seven-tenths of 1%. The coefficient on the percentage of laps a driver completes (PCTLAP) is consistently negative, although not always significant. The negative sign indicates that fans are more likely to identify the sponsor of a driver who has a smaller percentage

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change in the percentage of the number of laps they complete from one year to the next. In other words, a driver who consistently completes laps from one year to the next is likely to have their sponsor listed as a top of mind sponsor. Finally, our performance variables have the expected signs. In columns 1, 3 and 5, POINTS has a positive sign, but is only significant in column 5 where the dependent variable is the respondent’s top three firms in the top of mind calculation. Here, the result is strongly significant. The magnitude of the coefficient implies that a 1% change in a driver’s points from 2004 to 2005 leads to a 3% increase in the driver’s sponsor being named as a top of mind sponsor. AVGFIN appears in columns 2, 4 and 6. The coefficient on this variable has the expected negative sign which indicates that the higher the firm’s car finishes over the course of the year (a lower number), the more likely it is that fans will identify the sponsor as a top of mind firm. The magnitude of the coefficient implies that a 1% increase in finishing position increases brand awareness by .72%. AVGFIN is significant when the dependent variable is only the single highest top of mind firm. Interestingly, the YEARSINCAR variable does not appear significant in any of the variations of the model. This suggests that driver longevity may not affect the ability of fans to identify a firm as a primary sponsor. One reason for this could be that only two years are covered in this study. Combined with the number of young drivers and older drivers who recently changed teams, the result is not that surprising. Thus, for the top of mind awareness, performance appears to be important, as does sponsor consistency. A driver change is bad for sponsor recognition, so while performance helps brand identification, changing drivers should be done with caution.

5

Conclusions

The world of NASCAR is sponsor-driven. On any given Sunday (or increasingly Saturday nights), a NASCAR driver is plugging every sponsor he can think of in pre- and post-race interviews. The driver is the celebrity, but he is conscious that keeping sponsors happy is a vital part of the business of NASCAR. The results of this paper suggest that keeping the sponsor happy does not necessarily mean that winning is vital to ensuring a flow of sponsorship dollars. Multimillion dollar sponsorship deals are often predicated on the marketability of the driver, even more so than on-track success. The claim of ‘win on Sunday, sell on Monday’, therefore, may not be the correct way of viewing stock car racing in the USA anymore. A more accurate tag line might be ‘finish consistently on Sunday, sell on Monday’, as a higher average finish and more points, not necessarily wins, keeps a sponsor fresh in the fans’ minds. Alternatively, it might be said that ‘keep sponsoring a car consistently, sell on Monday’. This result is consistent with Turley and Shannon’s (2000) point on consistency in sponsorship. Consistent sponsorship across a season and avoiding driver changes promote the driver-sponsor link in fans’ minds. This study does possess some limitations, of course. It would be beneficial to include more years of data to enhance the predictive power of the model. Additionally, an improved way of comparing the top of mind brand awareness to actual purchases would improve the model’s practical results. Although Hagstrom (1997) finds that NASCAR fans do shift their buying behaviour toward sponsors, the link made herein relies too heavily on this expected change in behaviour as the top of mind recognition changes.

What have you done for me lately?

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Inserting a more direct question about this change in consumption patterns into future surveys would help alleviate this problem. Further research is needed in the area of athlete performance and sponsorship. The model we provide could be expanded to include individual sports that rely on sponsorship such as golf and tennis. The model also could easily be expanded into team sports, such as football (soccer) and rugby, where sponsorship dollars are more important than in North American team sports. To help firms make the most efficient use of their sponsorship dollars, they need to know whether funding a winning team at a high price tag is as effective as funding up and coming teams or teams whose athletes have developed a devoted following despite lacklustre performance. We hope that this provides a good first step in this direction.

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Notes 1

2 3 4

The current Sprint Cup series, formerly known as the Nextel Cup and prior to that the Winston Cup series, is the premier series in NASCAR. The Nationwide series (formerly the Busch Grand National series) is one step below Sprint Cup racing. NASCAR also has a truck series, along with various regional series. This number comes from NASCAR itself and has been criticised as being exaggerated. This data is taken from the NASCAR website, http://www.nascar.com. This data is taken from NASCAR’s website, http://www.nascar.com.