Alex Meshkin

Over the past several months, as the advertising market has become increasingly more challenging, I have written numerous posts about the need for NASCAR and Sprint Cup teams to evolve and innovate to stay competitive in the corporate boardrooms. In my posts NASCAR 2.0 and NASCAR Sponsorship 2.0, I discussed opportunities to generate revenues and exposure through digital media.

My unique perspectives are a result of “one of kind” experiences which are vastly different than any other thought leader in the NASCAR industry: a web 1.0 entrepreneur, NASCAR Team Owner (Bang Racing), and today, an executive in the current social and digital media industry. While there are unlimited opportunities for NASCAR to leverage digital media technologies and corresponding social/digital business models; I have a specific proposal for NASCAR and specifically Paul Brooks, President of NASCAR Media Group.

I know from my personal experiences in working with Paul Brooks at NASCAR, he is one of the most forward thinking executives at NASCAR and I hope he embraces the following proposal. For those unfamiliar with NASCAR’s approach to partnerships and licensing; NASCAR has historically required substantial licensing fees to pursue any type of business relationship, which in all fairness has generated significant profits in the past decade. However, moving forward in the dynamic digital economy and facing the challenges to continue to grow their audience and fan base, NASCAR must now look to tap into emerging technologies and unlock entrepreneurial ingenuity to develop innovative business models to increase fan exposure and create new revenue sources.

The first initiative I believe NASCAR should pursue is to open up access to the racing data acquired through the on-board computer/black box. Just to be clear, I am not suggesting that NASCAR should allow live telemetry for the racing teams, but I am proposing an online database which could be accessed for technology entrepreneurs, game developers, media, and entrepreneurs and racing teams. By enabling open access to the racing data that could be parsed and leveraged, businesses and entrepreneurs could bring forth innovation to drive new revenue sources and digital media exposure for NASCAR and its teams.

Technically speaking – NASCAR needs to publish a set of Application Programming Interfaces (APIs) which could be available for commercial and non-commercial use that could create the opportunity to unlock the creativity of technology and digital media entrepreneurs and leverage the private equity markets to develop business models to reignite the excitement and consumer interest in NASCAR.
Even though my current business focus has little to do with NASCAR or motorsports, I strongly believe that NASCAR must embrace new media business models and techniques. Paul, if you are interested to speak regarding these ideas -you know how to reach me. Best, Alex Meshkin.

In my posting NASCAR Sponsorship 2.0, I previously discussed how teams have a real opportunity to leverage their “content” through digital channels creating supplemental advertising revenue to offset their losses in traditional on-the-car sponsorship. Some may ask, is there really an opportunity in digital advertising for NASCAR teams? A recent report from eMarketer, projects online advertising for sports sites will double from 2008 to 2012 – to $2 billion.

The sports site online advertising market is mostly untapped by NASCAR and remains a huge opportunity for race teams to tap into and ensure their continued viability in these difficult economic times.
While the most dedicated NASCAR fans are not your typical early adopters of online services; there still remains a tremendous opportunity to harness the power of the loyal demographic who embraces the internet as a regular source of news and entertainment. According to Quantcast, NASCAR.com generates approximately 3.7 M monthly unique users and peaks at over 6.5 M during the beginning of the season. So while the audience may be limited in numbers, the unmatched advertiser loyalty provides a desirable market opportunity to distribute content directly to fans through digital channels for racing teams such as Hendrick Motorsports, Roush Fenway and Joe Gibbs Racing. Unlike the franchised sports teams of the NFL, NBA, NHL and MLB; NASCAR Teams have complete autonomy of their online presence and content. This provides a significant value proposition where teams can leverage their content through a variety of online business models to create interaction with fans and ultimately new sources of advertising revenue. This would likely result in considerable exposure for their existing sponsors; and consequently create a new advertising inventory that would be measurable and provide a clear Return on Investment (ROI).
As a former NASCAR Team Owner, Sports Marketer and Digital Media Entrepreneur; I have succeeded in bringing new sponsors such as eBay and Toyota into NASCAR, and leveraged online advertising to unlock revenue sources from digital channels that created a history making NASCAR racing team. The potential has never been greater and the most successful teams have the largest market opportunity to generate significant value that can be monetized in the digital economy.

Over the past few years corporate marketing and advertising budgets have made a dramatic shift from Old Media towards New Media, which provides measurable customer acquisition with a recognizable ROI. Today, current NASCAR Sponsorship programs are structured much like Old Media, which fails to present corporate marketers with the value presented through “new media” channels. Now there are some who will say – sports marketing isn’t Old Media or New Media but Sports Media. While Sports Media does present a unique value proposition – at the end of the day, it does not provide corporate marketers a measurable customer acquisition medium -making it very similar to Old Media.
When specifically analyzing NASCAR as a marketing platform it’s undisputed that it provides unparallel consumer brand loyalty for sponsors; however “die-hard” fans, which are the most brand loyal – are unfortunately also a dying breed. As our country continues to face high inflation and a challenging economy for the middle-class, which is the loyal mainstay of the NASCAR demographic; it will become a less attractive marketing medium to corporate marketers.
Across the country, many businesses are attempting to adapt to this challenging economic market. Over the past number of months, the newspaper industry has announced wide scale layoffs as they attempt to transition their business to more online operations. The latest causality is The Atlanta Journal-Constitution that announced cuts to its work force by approximately 8 percent or 189 jobs. NASCAR is not alone; and needs to take heed and understand that it is no different than t the challenged models of the newspaper and Old Media industries – which also offer a branding and awareness platform with no real method to measure customer acquisition for its advertisers. Old Media is in a state of peril; and NASCAR and its teams must not make the fatal mistake of assuming they are immune to the fragile economy. Now is the time for them to reinvent themselves or they will face a similar dreadful business fate for their sponsorship prospects.
As a lifelong fan, former team owner and new media entrepreneur – I see numerous avenues to upgrade NASCAR from its current “1.0” platform to a “2.0” marketing approach; and leverage digital media technologies and social marketing techniques to provide unparallel fan interaction and advertiser ROI.
Back in 2003, in conjunction with the launch of my team Bang Racing with Toyota Motorsports, I developed a marketing platform and corresponding online venture to engage consumers and enable advertisers to target fans with online promotions and incentives. We successfully deployed a “points” based auction powered by eBay (a Bang Racing sponsor) and delivered unmatched ROI to our sponsors.
Today there exists technologies, which if employed could provide NASCAR and teams with a solution. Available web 2.0 architecture and social marketing techniques would enable NASCAR, teams and sponsors to leverage existing technology and increase their exposure, interaction and ultimately the sponsors’ ROI.
The most basic web 2.0 technologies, which have transformed online marketing, journalism and even politics, are “blogs”. They are free and easy to use but yet, not a single driver, team or even NASCAR has implemented one. This most basic concept is far beyond the understanding of most NASCAR insiders and demonstrates the antiquated approach to marketing.
NASCAR racing is entertainment and content; and while NASCAR Corporate controls the “content” at the racetrack; and teams are unable to successfully monetize their at-track presence – racing teams do have the ability to monetize their “content” away from the track – if they employ these new technologies. “RaceWorld”, which was a failed attempt by Michael Waltrip to engage fans in a physical structure, further demonstrates a lack of current business and technology savvy of NASCAR teams. Today, teams must embrace and engage fans through technology and the internet rather than expensive and traditional channels. A great case study is the success of online video – which is dominated by user-generated content – not by television networks or studios – this is the genius of the success of YouTube.
NASCAR teams, such as Hendrick Motorsports, Roush Fenway Racing and Joe Gibbs Racing could offset the devastating effects of projected manufacturer financial support losses and a difficult sponsorship market by simply distributing content through a variety of successful online businesses, which would increase advertisers’/sponsor’ impressions; while providing new revenue sources.
Through the use of live online streaming, micro-blogging, social networking and other web 2.0 concepts – NASCAR Corporate, racing teams and motorsports sponsors have the ability to receive an ROI capable of sustaining the growing costs of the sport. What are they waiting for – the race is on – and time is running out!