How Nascar Is Starting a Turnaround

Sport's Revamp to Draw Youth, Hispanics Begins to Pay Off With Rising Ratings

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Nascar had been in a tailspin for the last four years, but it's Sprint Cup Series is making something of a comeback in 2011, with gains in both track attendance and TV ratings , thanks to a revamp of its business and marketing model to reach new and younger audiences.

"Obviously we're very pleased with the turnaround," Nascar Chief Marketing Officer Steve Phelps said, "especially with the gains in the 18-to-34 demo, which of course is important for TV and advertisers."

Nascar's audience had steadily eroded over the last four years due to a variety of circumstances, not the least of which was alienating its longtime, hard-core fans with a variety of changes: later starts to appease West Coast viewers; altering its rules that made for safer, albeit less exciting racing; and instituting the playoff-like Chase for the Cup, in which the last 12 races of the season would serve as the racing league's championship. Throw in a tepid economy, rising ticket prices and skyrocketing gas prices, and it also hindered track attendance.

To correct the problem, the racing league hired five different research companies that conducted nearly 50 focus groups, reaching out to everyone from fans and media to sponsors before the season began. The result was a new integrated-marketing communications department that has focused a good part of its attention the critical 18- to 34 year-old demographic, using social media to help organize college viewing parties; developing a dedicated youth website; and promoting young drivers such as surprise Daytona 500 winner Trevor Bayne (age 20), Joey Logano (21) and, starting with the Nationwide Series Kroger 200 race this Saturday , action sports star Travis Pastrana (27).

"These young guys come into this and they don't know what that old car drove like, they don't know how things used to be, they don't care. They just want to go fast, they want to win, and the enthusiasm is contagious," said former Nascar owner and now ESPN analyst Andy Petree. "We've seen some great talent coming into the sport. Trevor Bayne is a great story and [Brad] Keselowski [age 27] is now coming into his own."

Nascar is also expanding its outreach for branded entertainment in TV, films and music videos, and taking a deeper dive into the burgeoning Hispanic market with the creation of more Spanish-language content.

"Like any good business, we have been in a reflective situation, looking at a number of different areas, starting with our communications area," Mr. Phelps said. "Entertainment will be a big push to amplify our message, especially to our next wave of fans. [With] our digital and social media practices internally, with the tracks and with the teams, we were trying to find a baseline. And when we did, we realized we had a long way to go. The Hispanic market, we realized the same thing. We're not doing a lot in the space today, but we need to. Hispanics make up 9% of our fan base, so we want to do more Spanish-language initiatives at the track and we'd like to work with Telemundo."

Mr. Phelps said Nascar is in the process of looking for a multicultural agency and hiring additional internal staff that speak Spanish.

Jump Co. out of St. Louis does Nascar's creative and brand advertising, but the racing league hired sports-centric marketing agency Taylor Communications to begin implementing the findings of the research.

On the track, Nascar bowed to fans' wishes and implemented double-file restarts -- putting the leaders at the front of the pack to restart a race after a caution flag -- and, more important, scrapped its former policy of fining drivers for on-track incidents. Instead, race officials decided to let the drivers police themselves, and it's helped to create exciting racing and some simmering rivalries that have piqued fan interest.

Though Nascar has a five-year plan to fully implement all initiatives, results have already been noticeable. Through the first 19 races of the season heading into Sunday's Brickyard 400, Nascar had drawn higher TV ratings in 11 races compared with 2010, was even in three races, and down in five. Attendance through the first 19 races was up 9%, from 1.829 million last year to 1.994 million this year.

Fox, which broadcast the first 13 races, averaged a 5.0 rating and 8.6 million viewers per race according to Nielsen, up 4.2% and 9.7%, respectively, year over year. TNT, which handled the next six races, was up 3% in both ratings (3.1 this year, 3.0 last year) and in average viewers (5.13 million in 2011, 4.99 million in 2010).

Combined, the Nascar Sprint Cup Series, which includes the Brickyard 400, has averaged 5.1 million households (plus 6% over 2010) and 7.5 million viewers (plus 9% over 2010) per event on Fox and TNT. The coveted 18-to-34 male demographic, which took a 29% plunge from 2009 to 2010, is recovering -- year to date, the demo is up 26%, but not enough to erase the loss; it's still down 3% from 2009.

That's still off from the 5.5 overall rating from the salad days of 2005, but nonetheless it's a sign that Nascar is rebounding.

"There's not specific factor that we can point to and say 'This is the reason why ratings are up.' I think it's a confluence of a lot of great things that have come together, and we're seeing that in the ratings ," said Julie Sobieski, VP-programming and acquisitions at ESPN, which takes over broadcasting the final 17 races starting with the Brickyard 400. "I think the simplest [reason] is fans obviously are happy with the racing and seem happy with the broadcasts. There are great story lines out there. There's a lot of positive momentum."

Another good sign? Sponsorship is back on track. The total number of commercials broadcast for all 36 races in 2010 was down almost 6% from 2009, dropping from a total of 4,693 spots to 4,426, according to the racing website Fox, TNT and ESPN/ABC are on target to broadcast almost 4,700 spots this season. Moreover, just this past week, Indianapolis Motor Speedway officials signed a five-year, $15 million deal to make Crown Royal the title sponsor of the Brickyard 400 starting next season.

"Sponsorship is clearly coming back," Mr. Phelps said.

"We've garnered tremendous value from our partnership," Jim McCoy, director of strategic sponsorships for Nationwide Insurance, said in an email. Nationwide is the entitlement sponsor for the Nascar Nationwide Series, which is a step below the top-of -the-food-chain Sprint Cup Series. "We've created a fully integrated campaign that engages the fan both on and off the track that has produced a significant increase in brand health measures, leads generated and policies written with the Nascar fan."

Just in time, too, as Nascar prepares to negotiate a new TV rights deal in 2014. The current eight-year, $4.5 billion deal with ESPN/ABC, Fox and TNT expires then, but racing officials have traditionally locked up new deals about a year before expiration, meaning the remainder of this year, 2012 and into 2013 are critical.

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