Is David Gilliland going to drive an unsponsored car in the Bud Shootout Saturday? With the season almost underway more than 10 drivers are still without primary sponsors for the season.
Is this do to the fear of a recession or are corporations moving away from NASCAR because of the rising cost of team sponsorship?
I think it may be the latter. Even though signs of a recession are showing, some major corporations are increasing their advertising budgets for the upcoming year.
Last week Proctor & Gamble Co., Colgate-Palmolive Co., Kraft Foods, and Kellogg Co. all boosted or maintained their marketing budget for the year. This is no small amount of money either.
Accoding to adage.com, last year Kellogg increased their marketing budget to about nine percent of sales, or about $1.1 billion.
These companies have a lot of money to spend but they have to do it wisely. It cost more than $20 million a year to be a primary sponsor in the NASCAR Sprint Series. Even though NASCAR has the most loyal sponsor purchasing fans, these companies have to look at their return on investment.
In advertising, companies use CPM, which stands for cost per thousand (you thought millions huh). This is used to find out how much it costs to reach 1000 viewers. The CPM may have gone up too much and the sponsors are finding other ways to reach more viewers for less money.
NASCAR should look for a way to lower the teams cost. O yeah, they did that already. It's called the Car of Tomorrow. But is it really going to work? We will find out when the first full season with the COT is over.
Wednesday, February 6, 2008
Is NASCAR getting too expensive for everyone?
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