Amid escalating clutter and sports sponsorship fees, McDonald's Corp. is joining the ranks of marketers that are strategically combining a la carte deals to get greater returns on their investments.
That's why late last year, McDonald's put the brakes on its "official drive-thru" designation with Nascar after deciding its role as one of 42 official sponsors was keeping the fast-food giant at arm's length from the fans.
"The way fans embrace Nascar is through on-field activation with cars and on-site opportunities," says Peter Sterling, VP-marketing for McDonald's USA. "We know that because when we were associated with Bill Elliott, we were held in higher regard ... than we are as a designated sponsor."
Instead of pulling out of the racing league entirely, McDonald's redirected its funds to drivers and teams.
"Companies are realizing for Nascar specifically that the passion exhibited and touted by Nascar is virtually 100% linked to specific teams and specific drivers," says Larry Lubin, chief operating officer of SponsorTrak, a sponsorship evaluation service. "It's not a situation where people say, `I love Nascar,' but what that really means is `I love Jeff Gordon or Dale Earnhardt Jr.' "
With fees ranging from $1 million for an entry-level partnership to upwards of $100 million for a five-year contract with a single driver, marketers "sometimes fail to appreciate there is a huge middle ground," Mr. Lubin says. That compromise comes in the form of a major, but associate-level, sponsorship of a team with selected additional tickets, hospitality and promotional support.
"People maybe are not appreciating even today how many options are available," he adds. "McDonald's is ... applying their learning in a very smart way."
Heading into its third year as a sponsor of the Association of Volleyball Professionals, McDonald's is discussing how 2005 might look, Mr. Sterling says. The tour squarely targets McDonald's female bull's-eye and also ties to its Olympics affiliation.
With the Olympics, McDonald's is planning how to best leverage its sponsorship against young adults and women, says John Lewicki, McDonald's director-sports alliances and sports marketing. "Figure skating is more relevant to moms and girls," he says. "We'll have broader senses of activation that are more about balanced active lifestyles."
Although McDonald's ended its role as a Nascar official sponsor, the fast-food giant remains involved in auto racing, including:
* Last month signing on as primary sponsor for Nascar driver Jason Keller of Team Rensi. The team is co-owned by former McDonald's President-CEO Ed Rensi and his brother Sam.
* Last September signing a two-year deal with the Champ Car World Series, formerly the CART series, as its official fast-food restaurant to complement McDonald's primary sponsorship of the Sebastien Bourdais car owned by the Paul Newman/Carl Hass Racing Team.