Thursday, July 2, 2009

Want to “turn” Thoroughbred racing around…look to NASCAR


I walked into a store recently and saw hanging on a rack by the checkout counter a four inch by four inch piece of painted metal. The cardboard top which attached to the plastic wrapping that held the piece of metal read “Real NASCAR Sheet Metal, from a Real NASCAR.” The price for this small coke can flimsily piece of metal was $20.00, I asked the clerk when it became my time to pay if they sold very many of those and he replied “we can’t keep em in stock.”

That piece of metal, that little piece of painted aluminum, really struck a cord with me. My thoughts began to ponder why was it that while Thoroughbred racing is facing a crossroads of historic levels, NASCAR is selling pieces of metal as fast as they get to the store. The thought of how NASCAR got to where it’s at and could it translate to Thoroughbred racing began to consume me, as such I’ve spent many hours studying their market model and it’s potential translation.

Twenty years ago NASCAR racing was considered the poor cousin of Indy racing and essentially an outlet for “rednecks” (not my term, and no offense meant) to watch “souped” up cars go in circles around a track, now it’s the number two sport in America.

Here are some numbers which may catch your attention: according to “Kotler…Defining Marketing and the Marketing Process” NASCAR races are seen in 150 countries and in 23 languages by 75 million people, the average fan spends nearly $700 per year on NASCAR related items, about 240,000 people attend the Daytona 500, and over 250 big-name sponsors pay more then 1-billion per year for sponsorships and promotions, let me say that again – 1-Billion dollars a year - not bad for something once considered to be a sport for “rednecks” (again not my term).

Comparing TV ratings from the Breeders Cup and the Daytona 500 we find that according to BloodHorse magazine last years Breeders Cup event garnered a rating of .7 where ratings for this years Dayton 500 according to speed forum had a comparatively whopping ratings share of 10.2, and guess what folks TV ratings equate to corporate dollars.

So how did NASCAR do it how did they go from a preverbal bad joke to the number two sport, they did it through marketing (here’s where the TA DA sound should be) they reinvented themselves and sold that product to a now enamored public.

The first thing they did was sell the excitement, the speed, the sounds, the sights. Then they sold the drivers, they took their helmets off and had essentially glamour shots made of them, the effect was instead of looking like dirty astronauts they looked glamorous and cool (which also helps explain why almost half of NASCAR fans are female). They then sold the corporations and the media; well actually at this point the corporations and the media sold themselves, essentially getting into bidding wars to advertise and or broadcast their product.

Ok I know what you’re thinking, car racing and horse racing are completely different. Cars stick around, horses come and go, how can we ever sell this sport the way they sold that sport. Simple they didn’t sell Chevys, they didn’t sell Fords, they sold a sport. Sure there was some brand loyalty especially among the die hard fans, but that wasn’t what they sold, they sold excitement.

There is nothing more exciting then a stretch dual to the wire, anyone who says they would rather watch four hours of cars going in a circle compared to two minutes of intense fighting to the wire doesn’t understand Thoroughbred racing. The excitement of watching a horse purchased for $9,500 come out of no where to win the Kentucky Derby compared to watching cars drive in circles for four hours is like comparing a flash of lightening to watching paint dry.

The people of America want excitement, they crave it and in a downed economic time they need it. Ed Myers of River Downs once told me that the excitement of Thoroughbred racing was so addictive it was like “liquid heroin.” We have the product, we have the niche, if the people knew about what we have to offer they would crave it, we just have to tell them about it.

5 comments:

Glenn Craven said...

Some points well-taken, but I'm a little concerned for NASCAR ... though maybe I'm the only one.

I read one story that reported viewership of NASCAR on FOX was down 11.5 percent this spring. Unless 10 or 12 percent of Americans have turned off their cable or disconnected their satellite dish, then the economy alone doesn't explain that. In fact, the recession is probably holding down the sales of expensive race tickets (I've heard radio ads offering discounts to in-state races), but shouldn't those people at least then be at home watching on TV?

For several years NASCAR was known for its rabid fans who buy ridiculous dollar-amounts of souvenirs and paraphernalia, I think that trend is ebbing, too.

A once-thriving NASCAR memorabilia shop in my vicinity is soon to be out of business. Part of the reason is that their supplier has gone to competing against them over the Internet, but in my opinion NASCAR had too many licensees and its licensees over-produced products such as die-cast race cars. Once a big fan myself, since moving to the South, I often found that the car I bought (allegedly limited edition!) for $90 was worth $25 at the end of the season because there were several dozen just like it for sale at any given time on eBay, from unsold allotments dealers had received.

NASCAR has abandoned its roots in the South, canceling races at competitive tracks like Rockingham (where there was practically NEVER a bad race) and the blistering short track at North Wilkesboro and rescheduling iconic races like those in Darlington in exchange for a less-thrilling brand of racing, loggygagging at 170 around mile-and-a-half ovals where a driver's skill is far less important than having the most money to throw into your R&D and getting the setup just right.

The Car of Tomorrow (blech, boring, there's your reason not to watch on TV) ... replacing experienced, popular drivers with hotshot kids who haven't always paid their dues but draw 18-to-30-something womenfolk ... instituting the "Chase" for the cup, where anybody not in the top 12 with a few races to go CAN'T get into the top 12 no matter what they do ... and, contrary to what GOT them there, a growing belief among fans that NASCAR views them only as dollar-signs ...

I could go on and on with a litany of ways NASCAR has turned me off to it, rather than on. I haven't watched a NASCAR race in several seasons, and not spent a dollar on it in the same amount of time. I used to never miss a race on TV and attended a few, too, when I had a rare weekend I could travel. I have an expensive collection of NASCAR memorabilia (most of it related to one driver, who is gone now), all in boxes.

Again, maybe I'm alone in this assessment, but I really kind of wonder if NASCAR hasn't "jumped the shark."

I don't think it will decline to its original status as a regional spectator sport -- though the racing would be better if it did. But I do wonder whether it won't decline a little bit more for the next few years and then just settle into a holding pattern from which it rarely again ascends to the heights it maintained from, say, 1996 to 2006 or so.

So while NASCAR for several years was a great example of effective sports marketing, I'm not so sure it is such anymore.

If horse racing were to follow *all* of NASCAR's lead, we'd be closing Saratoga in favor of a new track outside Vegas where everybody swelters in the heat watching Quarter Horses jog 11 furlongs and sprint for one.

But I'm a bitter old man ...

Bill Yates said...

Obviously, the business model is not what we want to emulate but instead their marketing model. Which as stated turned them from a joke to the number two sport in America, what they did after that was the business side of the equation?

Bill Yates said...

Obviously, the business model is not what we want to emulate but instead their marketing model. Which as stated turned them from a joke to the number two sport in America, what they did after that was the business side of the equation?

Bill Yates said...

Obviously, the business model is not what we want to emulate but instead their marketing model. Which as stated turned them from a joke to the number two sport in America, what they did after that was the business side of the equation?

Bill Yates said...

Obviously, the business model is not what we want to emulate but instead their marketing model. Which as stated turned them from a joke to the number two sport in America, what they did after that was the business side of the equation.