NASCAR Overhauls the Fan Experience
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Marketing Jun 2, 2015

NASCAR Over­hauls the Fan Experience

How the car-rac­ing giant over­came flag­ging engagement.

Nascar marketing's new digital platform has renewed and expanded its fan base.

Yevgenia Nayberg

Based on insights from

Eric T. Anderson

Ear­li­er this year the NASCAR mar­ket­ing com­mu­ni­ca­tions team won PRWeeks pres­ti­gious In-house PR Team of the Year award, beat­ing con­tenders like Tay­lor Swift’s PR team and the Unit­ed States Olympic Com­mit­tee. But the NASCAR of 2015 — launch­ing a new dig­i­tal plat­form, increas­ing its YouTube views by 1,190%, and secur­ing the most valu­able tele­vi­sion broad­cast con­tracts in the company’s his­to­ry — is a far stretch from the NASCAR of 2011, which had plum­met­ing race atten­dance, falling TV rat­ings, and flee­ing spon­sors. What tran­spired between then and now was noth­ing short of a mar­ket­ing trans­for­ma­tion, says Pro­fes­sor Eric Ander­son, chair of the Kel­logg School of Management’s mar­ket­ing depart­ment. And what it took to tru­ly trans­form the organization’s image went far beyond chang­ing a logo or increas­ing an ad bud­get. It took a thor­ough reex­am­in­ing of the entire fan experience.

The full Kel­logg case, NASCAR: Lead­ing a Mar­ket­ing Trans­for­ma­tion in a Time of Cri­sis” is avail­able in Eng­lish and Span­ish for cor­po­rate train­ings or uni­ver­si­ty classrooms.

Research­ing Its Own Irrelevance

Dan­ger­ous irrel­e­vance” were the words used in 2011 to sum­ma­rize an out­side consultant’s com­pre­hen­sive assess­ment of the state of NASCAR. Bri­an France (NASCAR’s CEO and the grand­son of its founder) had com­mis­sioned the research, con­cerned that the multi­bil­lion-dol­lar sport of stock-car auto rac­ing had been in a state of decline since 2006.

The dig­i­tal age was upon us, so I was wrestling with ques­tions like: Are our young fans going to con­sume us dif­fer­ent­ly? Are atten­tion spans real­ly short­en­ing, and are these new devices real­ly going to be what dri­ves con­tent? If so, how does our indus­try under­stand all these things? Every­where I looked, we were doing things very tra­di­tion­al­ly, which had worked for a long time but wasn’t work­ing any­more,” said France.

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Through­out the 1990s and ear­ly 2000s, NASCAR had enjoyed dou­ble-dig­it growth annu­al­ly. But with view­er­ship and atten­dance declin­ing, major spon­sors defect­ed in the late 2000s. As NASCAR had always gar­nered more For­tune 500 cor­po­rate spon­sors than any oth­er U.S. sport, France sensed major prob­lems were brew­ing. The busi­ness mod­el of the entire indus­try (the pri­vate­ly owned sanc­tion­ing body of NASCAR, the pub­licly owned race tracks, the race teams and their dri­vers, the OEMs of the race cars, and broad­cast part­ners) hinged on spon­sors. And spon­sors want­ed engaged fans.

To find the root cause of tank­ing race atten­dance and tele­vi­sion view­er­ship, the jolt­ing symp­toms of dis­en­gage­ment, France ini­ti­at­ed what became one of the largest mar­ket­ing research ini­tia­tives under­tak­en by a U.S. sport. The research, led by Tay­lor Strat­e­gy, explored four areas: 1) the broad­er sports industry’s dig­i­tal and social com­mu­ni­ca­tions capa­bil­i­ties and how they com­pared to those of NASCAR, 2) fans’ live expe­ri­ence at the race tracks, 3) the lev­el of star pow­er of NASCAR’s dri­vers com­pared to that of oth­er sports stars, and 4) the next gen­er­a­tion of NASCAR fans. Many of France’s advi­sors were weary of invest­ing so heav­i­ly in research in the midst of a reces­sion. But France felt inde­pen­dent research would be a key asset in engag­ing the whole indus­try sur­round­ing his sanc­tion­ing body in major change.

Mil­len­ni­als are dif­fer­ent from baby boomers. They want social engage­ment and dig­i­tal inter­ac­tion with brands.” —Eric Anderson

Before the mid-2000s — and this would be true for any indus­try — the val­ue cre­ators had all the say in a company’s future, while the cost cut­ters were man­ag­ing mon­ey, pay­ing tax­es, and keep­ing things in the lane. As soon as [the reces­sion] hit, the cost cut­ters sud­den­ly had a big­ger seat at the table. That’s one of the hard­est things to deal with inter­nal­ly… [but] when you have falling met­rics and things are tough, your com­mer­cial part­ners are going to put pres­sure on you. If you can’t say that you have a cred­i­ble plan, a plan that they can join into, they’re not going to join you at all.”

Neglect­ed Millennials

The company’s research paint­ed a pic­ture that, if any­thing, was more dire than predicted.

NASCAR had not engaged mil­len­ni­als or more broad­ly pur­sued new cus­tomer seg­ments. Fac­ing an aging core fan base — white mar­ried males with an aver­age age of 47 — the seg­ments that would fuel the sport’s future growth had not yet been identified.

Mil­len­ni­als are dif­fer­ent from baby boomers.” explained Ander­son. They want social engage­ment and dig­i­tal inter­ac­tion with brands.”

But the organization’s cur­rent dig­i­tal strat­e­gy lacked any real, well, strat­e­gy for chang­ing this. NASCAR had out­sourced its online pres­ence to Turn­er Sports, to whom it had been licens­ing all of NASCAR’s dig­i­tal prop­er­ties since 2000. Turn­er con­trolled NASCAR​.com, NASCAR’s Face­book page, its Twit­ter han­dles, etc., and it did so with an eye for max­i­miz­ing its own bot­tom line, not a long-term vision for grow­ing the sport.

As a result, incon­sis­ten­cy abound­ed on NASCAR’s online plat­forms. The NASCAR​.com pages of small­er teams that were unable to pay Turn­er for the right to post their dri­ver pho­tos and spon­sor logos appeared half emp­ty. And our cor­po­rate spon­sors weren’t able to push out dig­i­tal­ly and social­ly to our fan base, their cus­tomers, in a way that allowed them to max­i­mize their spon­sor­ship unless they went through Turn­er,” explained NASCAR’s Chief Mar­ket­ing Offi­cer, Steve Phelps. This cre­at­ed a dis­joint­ed user expe­ri­ence that dis­cour­aged online explo­ration of the sport.

Fur­ther, NASCAR dri­vers were not moti­vat­ed to inter­act with fans on social media. With the longest sea­son (10 months) of any pro­fes­sion­al ath­lete and race teams focused on R&D to make their cars go faster, dri­vers’ pri­or­i­ties and com­pe­ten­cies were not in build­ing their per­son­al brands on social media. Some of the sport’s most pop­u­lar stars even denounced it. Con­trast this with the amount of activ­i­ty it takes to cre­ate a brand like LeBron James, and you can see why fan engage­ment was a seri­ous chal­lenge for NASCAR,” says Anderson.

Mil­len­ni­als who made it to the races and loved the live expe­ri­ence also faced dis­ap­point­ment when attempt­ing to share it with their social net­works. Attend­ed by over one hun­dred thou­sand fans, each NASCAR race typ­i­cal­ly took place in a rur­al area at a track that was uti­lized by NASCAR once, maybe twice, per year. This cre­at­ed a chal­leng­ing envi­ron­ment for cell phone ser­vice and WiFi.

The fan expe­ri­ence is crit­i­cal, explains Ander­son: NASCAR is com­pet­ing not just for a share of cus­tomers’ auto dol­lars or sports dol­lars, but enter­tain­ment dol­lars,” and the research had revealed that mil­len­ni­als large­ly attend­ed sport­ing events not for the sport itself but as a social occa­sion. Aspects in which fans per­ceived NASCAR as infe­ri­or to oth­er sport­ing and live enter­tain­ment events were scrutinized.

Com­pre­hen­sive Solu­tion Required

The plan that France’s team devel­oped in response to the research results to pri­or­i­tize the myr­i­ad issues was the Indus­try Action Plan. To cre­ate this vision for the future of the sport, NASCAR reached across the breadth of the sanc­tion­ing body. Impor­tant­ly, we didn’t grab the thir­ty high­est titles in the [orga­ni­za­tion]. We grabbed peo­ple who we knew were high­ly influ­en­tial with­in our com­pa­ny, young peo­ple and exec­u­tives — peo­ple who had a lot of ener­gy for the direc­tion we knew we need­ed to take the sport,” said Eric Nyquist, NASCAR’s Vice Pres­i­dent of Strate­gic Development.

France then took the lead in resourc­ing some of the plan’s objec­tives — like hir­ing the tal­ent to staff an Indus­try Ser­vices group with­in the sanc­tion­ing body to pro­vide media train­ing and mar­ket­ing resources to dri­vers and teams — and was the key advo­cate in pitch­ing the plan to the rest of the indus­try. Many changes neces­si­tat­ed gain­ing com­mit­ments from inde­pen­dent part­ners, like the pub­lic cor­po­ra­tions who owned the major­i­ty of tracks on which NASCAR races were held, to make mas­sive cap­i­tal improvements.

There is more con­nec­tiv­i­ty at our events [than almost any oth­er event in the U.S.]. It’s like mov­ing two square blocks of Man­hat­tan around the coun­try as a trav­el­ing cir­cus,” described Nyquist. “[Tack­ling infra­struc­ture] was a major under­tak­ing that has tak­en place over the last two years, but it was crit­i­cal. With­out it, we couldn’t build to the next lev­el of ele­ments that we want­ed to bring to the fan experience.”

What result­ed was not a trans­for­ma­tion of the sport itself but rather inno­va­tion in ser­vice and inno­va­tion in col­lab­o­ra­tion. The fruits of inno­va­tion can been seen in NASCAR’s 2015 – 2024 broad­cast rights deals, the rev­enue cor­ner­stone of the sport that trick­les to all of the industry’s stake­hold­ers. They totaled $10.94 bil­lion —more than dou­ble its 2007 – 2014 deals.

France not only ini­ti­at­ed changes with­in NASCAR, he devel­oped a com­pelling plan for his indus­try part­ners to join onto. He had clear asks and invest­ed time in sell­ing his vision,” says Ander­son. If he had mere­ly trans­formed his sanc­tion­ing body, the sport would not have seen the lev­el of suc­cess it has today.”

Featured Faculty

Eric T. Anderson

Hartmarx Professor of Marketing, Professor of Marketing, Director of the Center for Global Marketing Practice

About the Writer

Vasilia Kilibarda is the manager of case writing for Kellogg Case Publishing.

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