John Asher finally says it, nhra & powerade

#61 07-24-2007, 07:31 PM

Quote:

Originally Posted by Billy Weeks

Powerade should be responsable to their investment

Would you expect a company that advertises on TV to try to build ratings? A company that advertises in newspapers to build circulation?

Sponsors are not "investing" in anything they sponsor. They are buying a communications vehicle.

Quote:

Originally Posted by Billy Weeks

Don't realy see how productive it would be to answer to shareholders .."its not our problem.. we give them money we can't help what they do with it"....

They would not answer that way to shareholders. The answer would be that we spent x amount of money on the sponsorship and got y in return. If y is not large enough or x is to large, the next message to shareholders would be to cut the sponsorship.

Look at it this way...NHRA sold the sponsorship to POWERade and it is up to NHRA to deliver to the buyer what it sold. As for POWERade, it has one responsibility: to earn as much money for shareholders as it can.

Jim

#62 07-24-2007, 08:35 PM

i get what you are saying..but .. i guess my problem is i was taught a differnt method or reasoning for what sponsorships and advertising is for...

i spent years with Busch Series Pr directors whos main line of thought was that Their sponsorship dollars were being spent to gain band awareness and brand loyalty thru motorsport marketing... and that they, AB ,were the ones that were responsable for obtaining both... if the outlet, motorsports in this case, was to be succesfull.. it was up to the company to make sure all avenues availible were to be utilized... for proper promotion and awareness in the sport. And to make sure the budgeted dollars were spent properly to maximize exposure...and it was not left to anyone else's responsability.. all the Busch series ads seen are paid for by Busch Beer..not NASCAR.. Part of the situation that has led to Busch leaving the series is because NASCAR wants to control the money more.. so they have altered the program so that all moneys are paid to them (NASCAR) and they handel all promotions.... Busch feels they are responable for their promotins and they want to control it.. and not have it left someone else.. who is soley in it for the monatary gains...

to me Powerade/Coke America.. has missed the mark in using all areas of promotion for the NHRA and themselves....i believe also if Powerade/Coke America put 1/4th the effort in their NHRA promotions as they do with their NASCAR at track promotions they would greatly benifit.. as well would NHRA...instead it has been to a large part left in the hands of people that apear to not fully understand what needs to be done or how....

and no i am not saying i know everything that needs to be done....lol... only a company can truely understand what will meet their own needs for proper promotion for brand awareness and brand loyalty.... if Powerade is satisfied with the situation....They have meet their goals... nothing more needs to be said... if the NHRA is happy .. then they met their goals as well....its a shame...IMO... the goals are set so low for a great form of motorsports.....

Billy

#63 07-24-2007, 08:47 PM

We used to see commercials tied to the sport once in a while and it just makes sense to hype your investment just like the edit that said a race sponsor like maybe Summit has to sponsor a team. It adds to three pies.
I always knew the health of the commercial sponsorship depended on selling that air time and if all you see are PSA [ public service ] and adds for other shows thats revenue not sold.

I don't know how to effect a change but maybe Coke will step up since the NHRA will have new owners.
I suspected trouble with Smith .
He is most likely going to pull out leaving a serious hole.
I really was pulling for him as he at least is already in the business and a proven player.

#64 07-24-2007, 08:49 PM

Quote:

Originally Posted by Joe Sherwood

I remember hearing that the Powerade deal was worth $3 per year when it was first announced. But at that time I had NO idea Winston was spending $12 Million per year prior to the Pullout. I just hope this HD sellout doesn't turn out to be the Sham that Powerade has been. As long as Compton/Light continue to earn the $500,000 a year salaries they make, there's no incentive on their parts to improve NHRA what so ever!

Winston had a very limited market in which to spend zillions of dollars to advertise and motorsports was one of them. Coke/Poweraid, which tastes worse than Monster, has hundreds of markets to pursue their advertising $$$.. NHRA drag racing has such a small audience I wonder if anybody at all is interested. It's much along the lines that NHRA has to pay ESPN to show races and ESPN pays others for the rights to broadcast. Doing it backwards doesn't make for good business.

#65 07-24-2007, 09:12 PM

Quote:

Originally Posted by Dan Lea

"Give Aaron Polburn a chance to get his hands on some $$$ and a new TV deal once Bruton Smith's contracts with NHRA are up, then LOOK OUT....you will see...at least Aaron Polburn is on the right track...."

Pardon my ignorance, but what does Bruton Smith's contracts have to do with the TV deal, just wondering?

Dan

Ummm....I plead the 5th....Trust me....Bruton has been very interested in owning a series for a long time...He has ALL the leverage in this situation...Thats all I can really say at this point....

#66 07-24-2007, 09:23 PM

Quote:

Originally Posted by Wayne Darlington

I'll step in with a somewhat contrary point of view.

1) What is the retail price of a pack of cigarettes vs. a bottle of Powerade?

Although the markup percentages may be the same for both RJR and Coke, there are more advertising $$$ available when your promoted product brings 4x's or more the sales and income of another item or brand.

2) Did NHRA (or expand this same question to other sanctioning bodies, race teams, tracks, etc.) have a line of businesses standing in line with money in hand wanting to take RJR's place?

NHRA's Powerade deal came down very near the season start. IHRA has had both series and events that came down to the final days this year before having sponsorship in place. "Hot Rod" Fuller still races down the track with body panels that are bare. NASCAR is still looking for a replacement for the Busch sponsorship that is leaving their #2 series at the end of this year.

If you listen to commercial radio, you must have noticed the increase in :15 commercials.

Times are tough. Sponsors and advertisers are hard to come by, no matter who you are. Sometimes you have to make adjustments.

3) A small point but Asher lamented Powerade for not offering free product at the events like RJR did. It's been a while since I've been to a NHRA National Event but all that I did attend in the past years (Indy and Columbus) had free Powerade available for those who hung around for the Powerade winner's circle presentation at the end of the day.

======================

The whole point of my post is that big guy or small guy...there aren't a lot of people out their wanting to open up the checkbook or wallet, even for proven winners.

The suggestion by others boycotting an existing sponsor seems foolhardy and may even drive away other potential sponsors who would see this as just one more reason to keep their Benjamins in their own pocket.

While I like your candor, I think of this much diferently than you do, Wayne...

NASCAR is OUTRAGEOUSLY expensive...there are not many canidates for a $30,000,000 annual price tag, and that STILL won't stop them from getting a deal done for the Busch Series....watch..Even with declining ratings and attendance, they will get it done..

NHRA however, has a much bigger problem...They have shown NO price integrity by doing the deal with Powerade for so little $$$....They have also done NOTHING to build the series into a more deireable property, so they are in the same exact position that they were in before Powerade came along...Once the street knows that you are a $2 hooker, you will ALWAYS be a $2 hooker...That is until you do something to make yourself more desireable...They haven't done that..

So, there are plenty of companies that can spend $6-$8,000,000 per year on the NHRA, but it isn't about the dollars, it is all about the VALUE for those dollars, and right now, the NHRA has none..Just look at the Joyce Julius report...

This is also a major reason that teams like Rod Fuller and others are having a hard time finding funding...The NHRA doesn't do anything to build the profile of the series..

Ask yourself this question....Have you EVER seen a promo for an upcoming race on ESPN Wednesday, Thursday, or Friday OTHER than a mention and :10 corner graphic during another race...? And that ususally is rare too....Promotion...HELLO...?????

#67 07-24-2007, 09:36 PM

Quote:

Originally Posted by Jon Asher

Regarding Jay Rathman’s post it’s important to keep one of his key points in mind when discussing or thinking about this subject: He acknowledges never having seen the POWERade documents personally.

Because Mr. Rathman has not personally seen the contractual agreement between NHRA and POWERade his financial outline simply has no veracity. Simply put, he’s merely reporting something someone else told him. That does not make it factual, and again, I mean no personal insult to Mr. Rathman.

This is too important an issue to allow speculation to become “fact.”

The only people who really know the numbers are those who signed the agreement, but in my view that isn’t the primary issue here. The issue is the lack of support the sponsor has shown the series since signing that agreement.

Look at it this way. A web site recently “reported” that the Pro Stock Truck settlement was $7.5 million without providing anything in the way of proof other than having “heard it” from someone. That does not make that number the right one (and it isn’t, believe me).

“Hearing” that a deal is worth X amount has no validity whatsoever. If you can’t back it up with facts it’s nothing more than an unsubstantiated rumor.

Regarding P.J. Sapienza’s comments about O’Reilly’s, I was merely pointing out that NHRA had found it remarkably convenient to ignore one of their own marketing department “rules” when it was in their best interests to do so regardless of how that might impact the competitors.

Regarding Wayne Darlington’s post, it’s the sanctioning organization’s responsibility to FIND and SIGN a sponsor. If, and this is a big IF, the POWERade deal wasn’t a good one, then NHRA should have followed the lead of Mr. Compton when he said NHRA would proceed without a series sponsor if they couldn’t sign a “good one.”

As far as handing out free POWERade to a few fans at the end of a national event goes, that is indeed a very small point. While Winston never suggested that anyone start smoking, they did provide free product to the competitors. POWERade does not. The racers are expected to buy the product so that they can be seen using it, and therefore promote its “value” to the fans, who it’s then expected will buy it when they get home.

Why would a series sponsor desirous of promoting its product be asking those they want to do that promoting to buy it?

Maybe because they don’t have a real belief in the value of being involved with NHRA drag racing?

IF POWERade were solidly behind NHRA drag racing, and IF they believed NHRA drag racing was an exceptionally good promotional tool (which it very definitely is if utilized properly), giving product away by the truckload would be an obvious and extremely inexpensive way of expanding the public’s awareness of the product.

“Product” is the least expensive item any company has to offer. These are absolutely NOT real prices, I’m just throwing them out there for comparison purposes. So, IF a bottle of POWERade costs Coca-Cola fifty cents to produce, package, ship and market, and they retail that bottle for $2.00, the profit-per-bottle is obviously $1.50. So, each bottle that POWERade gives away only “costs” Coca-Cola $.50, yet they’re unwilling to even invest that small amount in support of the sport. On the contrary, they expect the racers to BUY the product for (remember, these aren’t “real” numbers) maybe $1.10, so no matter what, on every bottle of product the company is making at least something.

Dave Murphy, get real. NHRA and IHRA are competitors for the spectator’s dollars. The only area in which there’s even a modicum of cooperation is in national event scheduling. They do try to avoid scheduling conflicts with events are too close to one another geographically, and even then it’s not always successful.

Jon Asher

Jon....I would like to acknowledge something that you led people to believe....

1.) When I said that I have never personally seen the documents, that certainly doesn't mean that my information isn't 100% accurate...It simply meant exactly what I said....

2.) Seeing that you wanted to discredit me on this board, I will have you know that this information was told to me by a quite high-ranking executive employee at Coca-Cola in their sports marketing department...I would guess that they would be accurate in their details...

3.) If you were a responsible journalist, you easily could have PM'd me to ask me about the credibility of my information before you decided to make a public question of my credibility...I would have, for obvious reasons, preferred to share this with you privately...

My information has always been spot on in here....I don't speculate things here, and never have...

#68 07-24-2007, 09:46 PM

This has been an excellent discussion..I hope it stays that way.

I believe Jon makes valid points. I see Coke & NHRA sharing equal in the blame.

Ahhh..the days of Winston. As Pat said..they loved all forms of motorsports and it showed. Everyone reaped success when NHRA & Winston worked together.

I miss that. What happened? Is it Glendora? I don't know..well yea..I'd say it is.

Great stuff Jon, Jay, Jim..Billy.

#69 07-24-2007, 09:58 PM

Quote:

Originally Posted by Jim Samuel

Sorry Jon, but I do not agree with what you have written above. Your basic premise is not correct. A sponsor is not providing financial support. A sponsor is paying for the use of a marketing vehicle. They are not paying to support the sport. In the same manner, a company that buys television air time is not paying to support the program it advertises on and it has no responsibility to increase ratings of that program. Newspaper advertisers are not responsible for building circulation.

As for your example of Company X, I have been on the sponsor side of NASCAR sponsorships and what happens at the track is one of the least important parts of a sponsorship. Rather, the most important parts are the hospitality events at tracks, the public appearances by drivers, the ability to use drivers and show cars at trade shows and customer meetings, and the ability to use the driver and cars in advertising and other promotional efforts.

Should drivers and teams take some initiative and set some things up on their own? I can tell you that some of the teams I've worked with came to the sponsor before the start of each season with a complete plan for what the team was going to do to help increase the value of the sponsorship. Those teams were not waiting for the sponsor to provide financial support...they were creating what has come to be called a marketing partnership.

Yes, I agree with the point that POWERade does not take advantage of the sponsorship they are paying for. But I do not think that promoting NHRA is part of their responsibility.

There's a reason that the value of NASCAR sponsorships have grown so much over the past 15 years of so. That reason is that NASCAR and the teams involved in it put out a lot of effort promoting their sport to make it more valuable to sponsors. NASCAR made itself more valuable to Winston, and then to Nextel. Jeff Gordon and RCR made Gordon more valuable to DuPont and were able to increase the money they get from Dupont as a result. Dupont did not turn Gordon from a rookie to one of the sports biggest stars.

If you're disappointed with the way NHRA drag racing has been promoted, place the blame where it belongs. But don't blame a sponsor for not promoting the marketing vehicle. The sponsor buys the vehicle....the owner of the vehicle is the one responsible for making it a valuable product.

Jim

I have 6 examples for you, of why it IS the responsibility of the sponsoring company to build the elements of activation of their sponsorships...

It is up to the series to build and market the series, but traditionally, sponsors will spend 4-6 times the dollar amount of the sponsorship on activating it...

UPS and their activation programs with Dale Jarrett

FedEx and their activations with Denny Hamlin

Budweiser, and for the years that they have had Dale Jr., all of their activations

OFFICE DEPOT and all of the things that they do...

NEXTEL activating their sponsorship of the series

And ESPN and how hard they promote their telecasts...This can relate directly to how you build a sponsorship as a brand in itself.

Also, just for everyone's knowledge...the commercial spots that POWERade has in the NHRA programming are included in their sponsorship...POWERade has spent next to NOTHING to promote the series OR their sponsorship of it...

This deal was done by a genius named Rohan, who was the Brand Manager at POWERade when this was signed...He had it all right until some other brand saw how smart he was and stole him away from POWERade, and thats when everything started to fall apart....

#70 07-24-2007, 10:01 PM

This is some amazing stuff. I've read so much nonsense and "everybody knows" wisdom that my head is spinning. That's not a very good environment from which to contribute to the discussion, but I've never been known for my good judgement.

I see the "Don't complain unless you have a solution" people learned their lessons well in grade school civics, but they don't seem to have been taught discrimination of when people hold power and when they don't.

If you're sitting in a town hall meeting, that old stale phrase pretty much makes sense since you probably can have a direct input in what takes place. That instance is a true democracy. However, the United States uses a republican method in which elected or appointed representatives make the decisions. That's why they're there - to frame and offer new solutions.

To all you "have a solution" posters - when was the last time you entered a bill into Congress? You can't? But you get to vote against the incumbent if you like, solution or not, right?

The NHRA is even LESS of a republic since the representatives (if they can even meet the definition) have no impetus to follow the wishes of the constituency. Or even listen, as is so often true.

Besides, the people in power at Glendora are Professional Executives. In their minds, instituing a plan that came from someone else means you're weak and can't handle your job.

As for the sponsorship area, I'd cede that Jim Samuels is correct if we use a strict definition of the word. But what Asher is saying is that it's been proven time and time again that the real results in sponsorship come when a parallel program(s) is conducted that leverages the initial investment.

PowerAde is under no obligation to do so, other than following business principles that have worked for the largest, most successful businesses in the world.

Neglecting to leverage the base investment is like buying an apartment building but never advertising the rentals or even putting a sign in front. You have a certain gain from the property, but you're not using it in a way that can leverage and maximize your investment.

I'll end by saying that I'm really thankful that we have someone like Asher to occasion;y point out that the Emporer has no clothes - even if it makes the Emporer angry and some of his subjects a bit edgy.

#71 07-24-2007, 10:20 PM

Well said, Dan.

#72 07-24-2007, 11:23 PM

Quote:

Originally Posted by Dan Bennett

Neglecting to leverage the base investment is like buying an apartment building but never advertising the rentals or even putting a sign in front. You have a certain gain from the property, but you're not using it in a way that can leverage and maximize your investment.

Great analogy Dan!

Off topic, I've missed your involvement in this sport and am very happy to see you back! I hope our paths cross again soon.

#73 07-24-2007, 11:36 PM

The one thing I seem to be getting from this thread is that NHRA as an organization has NO conceptual value of a dollar, as reflected in the rumored dollar value of the PowerAide deal or the sale of the Pro side of the operation.

And the two people that should have the best financial interest of the Sanctioning body at heart, Mr. Compton and Mr. Light, are so blinded by their own compensation that they do not see the bilge pumps are no longer working and the ship is taking on water. Fast.

Mr. Asher's article reflects a point of view that comes from, in my opinion, watching a sport that has missed the opportunities available to it over the decades, and although he has had the opportunity over the years of his career to help direct to sport into the appropriate channels, other forces greater than him have taken it down the path it is currently on.

Jon has been an editorial force in the sport almost as long as I have been a fan, so I am sure that he is reflecting his disapontment in the recent developments of the past 7-10 years in his articles. The only issue with that is that it now riles up the masses, and does nothing to actually change the direction of thought in the upper echelon of those responsible for the decision making. Does that make him bitter? I do not know. But if I was in his shoes, I wouldn't be holding my tongue any longer, as those making the calls, in his writings, seem to not have had the same agenda as he.

Why his approach and energy is focused on telling us how much is wrong is great journalism, it seems to be doing nothing to influence the sanctioning body or it's choices of sponsoring corporations. Jay Rathman, on the other hand, works at bringing a change into the organization by his procurement of sponsors for teams that, in turn, can observe the rights and wrongs of the sanctioning body, and their dollars can speak volumes, ie: they can choose to stay with their sponsored team, or depart, leaving one more team on the sidelines.

If NHRA is all about the entertainment, then having competitive teams should be one of their primary concerns. To have competitive teams, you need to attract competitive dollars. NHRA has seemed to have proven that they are inept at performing that action, as the PowerAide deal and the HD deal seem to reflect. Those that can bring money into the sport are the future of drag racing- greater than any youth-oriented team or mega-owner can ever be. I can only hope that articles by Mr. Asher do not deter future cash influx from potential sponsors.

#74 07-24-2007, 11:39 PM

Quote: