Harrah's Brand on Fast Track
Jeffrey Pollack is gambling that they will also think Harrah's.
Pollack, vice president of sports and entertainment marketing for casino giant Harrah's Entertainment, hopes the large Harrah's logo on the hood of Gordon's racer will impress both the fans at the Speedway and the millions watching the race on network television.
Pollack said the company's sponsorship of Gordon's car is the right combination. Racing fans and the gaming company's customer base are one and the same.
"Harrah's is a brand that instills excitement and enthusiasm, and that's what NASCAR is all about," said Pollack, who spent five years as NASCAR's managing director of broadcasting and new media before joining Harrah's in August. "There are so many similarities between the racing audience and the NASCAR audience, that for our company, it's a natural fit."
Harrah's, along with Jim Beam Bourbon and Menards, a Midwestern-based home furnishing chain, are sponsoring Robby Gordon Motorsports, a driver-owned NASCAR team. Today's race is the first event of the season for which Harrah's has the primary sponsorship position on Gordon's car. The company will have the spot on the racer's hood at seven other races this year.
In the company's contract negotiations with Gordon, Pollack said Harrah's wanted the primary sponsor position during events at racetracks most relevant to the company's casino customer base, such as Las Vegas; Phoenix; Kansas City, Mo.; and Fontana, Calif., outside Los Angeles.
Pollack said Harrah's, which is in the second year of its deal with Gordon, doesn't disclose the financial terms of its sponsorship arrangement. One racing source said the major NASCAR teams command total annual sponsorship deals in the $15 million to $20 million range.
According to NASCAR, a team sponsorship allows Harrah's to place the company's logo on the race cars, vehicle haulers and the driver and crew uniforms. During races when Jim Beam or Menards has the primary sponsorship position, smaller Harrah's logos are still found on the car and on the driver and crew uniforms.
Harrah's also has an agreement with Gordon for personal appearances.
But Pollock said Harrah's receives more from the sponsorship than exposure.
"It allows us to create race packages for our very important customers," Pollack said. "These are memorable, once-in-a-lifetime experiences, such as taking customers into the (racing) pit, offering special seating and a behind-the-scenes look at the race."
Eric Wright, vice president of research and development for Joyce Julius and Associates, an Ann Arbor, Mich., firm that specializes in measuring the media impact of sponsorships, said that when a company signs onto the hood of NASCAR racer, there are plenty of risks.
"It's a roll of the dice because your brand is contingent on the car's success or failure on the track," Wright said. "If the car doesn't do well, it really doesn't do much for the brand."
Wright said during a typical two- to three-hour NASCAR race, the average television-screen time for a race car's primary sponsor is about 12.5 minutes; the average number of times the announcers mention the sponsor is 2.6 times a race.
Based on what it would cost for advertising during the race, the comparable value to the sponsor for time on the screen is $1.7 million, Wright said.
"Obviously, if a car goes out on the first lap, then the average time on television decreases," he said. "There are other subtle factors involved, such as the logo design and the size of logo. Some just pop out on the hood."
Gordon said the main challenge of having multiple primary sponsors is changing the look of the race car each week. Otherwise, he said, it's good to have multiple deals. Gordon said Harrah's benefits by bringing its customers to races when the Harrah's car is running.
"The cost of running these teams has gotten up there, so while it's a little more difficult for the team (having multiple primary sponsors), it gives us a great platform to race. Hopefully, Harrah's customers become fans of our team."
Another benefit for Harrah's is the loyalty NASCAR fans have traditionally shown to the sport's sponsors.
"Our fans are extremely brand-loyal, far more than any other sport" said Jim Hunter, NASCAR's vice president of corporate communications. "If our fans know Harrah's is involved, when they have a choice in casinos, they will choose Harrah's because of that sponsorship."
NASCAR claims to have a fan base of more than 75 million. More than 13 million attended NASCAR events in 2005, and 17 of the top 20 highest-attended sporting events in the United States in 2005 were NASCAR races.
In 2005, televised NASCAR events captured some 306 million viewers, according to ratings by Nielsen Media Research. Nextel Cup races, such as the UAW-DaimlerChrysler 400, were the No. 2 rated sporting events on television last year behind National Football League games. On 14 out of 36 weekends, NASCAR Nextel Cup events were the most-watched sporting events on television.
"The exposure for your brand with NASCAR is a tremendous value," Pollack said. "Because of the brand loyalty of NASCAR fans and the connection with Robby Gordon, we're confident that we see a good return on that investment."
Harrah's also benefits from the sales of NASCAR-related merchandise, which the racing organization estimates to be $2 billion annually.
In the online store for Robby Gordon Motorsports, more than two dozen products featuring the Harrah's logo are offered, such as die cast replica cars for $65, along with T-shirts, hats and novelty items ranging from $3 to $20. For $100 a fan can buy a Harrah's race crew jersey; $1,000 will bring home an authentic Harrah's firesuit worn by a member of Gordon's pit crew. Harrah's also sells some of Gordon's team gear at its casinos.
Pollack wouldn't say what the split was for sales of Robby Gordon-Harrah's merchandise, but a racing source said all sponsors normally receive a percentage of the proceeds from merchandise sales with their logo.
"We don't disclose the nature of deals like this, but let's just say it's a mutually beneficial relationship between Harrah's and Robby Gordon," Pollack said.
He added that he would not be surprised to see some cross-promotions in the near future featuring Gordon and Harrah's other highly recognized sports venture, the World Series of Poker. He said there is a similarity between NASCAR drivers and professional poker players.
NASCAR's relationship with Harrah's and other gaming companies -- Boyd Gaming Corp. sponsors two Busch series races -- forged a new convergence between professional sports and casinos. Unlike the National Football League, which prohibits even the smallest of connections between the sport and Las Vegas, NASCAR embraces the gambling audience.
While the National Basketball Association required that Nevada sports books remove lines on the league's all-star game before placing the event in Las Vegas in 2007, NASCAR thrives on its fans wagering habits.
"About 40 percent of our fans are what you would call avid," NASCAR's Hunter said. "Others are more casual with some interest. But a lot of them want to place a bet on their favorite team or driver. We think it adds interest and the sports books have gotten very creative in the wagers they offer."
However, like other major league sports that prohibit its athletes from betting on their own games, Hunter said NASCAR rules don't allow drivers or crews to wager on the races.
"The gaming industry is very attractive sponsor and we hope it grows," Hunter said.