NASCAR Dialing Wrong Number with AT&T Lawsuit

NASCAR has enjoyed tremendous growth in popularity, television audiences, and sponsorship revenues over the past decade. The growth seems to have hit a bump in the road (make that track) as a combination of higher prices for race tickets and gasoline are negatively impacting attendance and leading many race fans to stay home and watch on TV. Check that, they’re not watching on TV either, as ratings for NASCAR Nextel Cup races have been down from 2006 for almost every race so far this season.

If NASCAR didn’t have enough worries with fan interest, it finds itself entangled in a major sponsorship controversy. NASCAR is fighting to keep AT&T from being a sponsor of driver Jeff Burton and Richard Childress Racing. Burton was sponsored by Cingular Wireless, but when the brand was replaced with the AT&T name the company naturally wanted to shift its association with Burton and RCR to the AT&T brand. NASCAR has 700 million reasons to keep out AT&T as a team sponsor, as in the $700 million, 10-year deal NASCAR has with AT&T rival Nextel. Sport properties should take steps to protect their sponsors from having to fight for the audience’s attention. After all, breaking away from media clutter is one of the attractions of sponsorship as a marketing communications vehicle.

It is admirable that NASCAR is vigorously defending the value of its property and seeking to protect category exclusivity for Nextel. However, preoccupation with this issue could be more harmful than helpful. Despite Nextel’s established association with NASCAR, the fact remains that many NASCAR fans are AT&T customers. Taking aggressive measures to shut out fans’ wireless provider may be received negatively. Management focus would seem to be better utilized by examining how to rekindle fan interest in attending NASCAR races and watching races on TV. Otherwise, NASCAR will continue to lose a point of difference it has enjoyed over other professional sports: its intimate relationship with the everyday fan. Other major leagues are viewed as having “sold out” to the interests of corporate sponsors and media partners. While NASCAR may still have an advantage when it comes to fan access to the sport, it could easily lose that advantage if becomes too distracted with sponsorship issues. Link

Scientific Breakthrough in Cause Marketing?

Results of a study published recently in the Journal of Science may have significant implications for marketers of philanthropic causes or charities as well as companies that align themselves with nonprofits via cause-related marketing campaigns. In the study, subjects participating in an experiment experienced activation of “pleasure centers” in the brain when they learned that money had been transferred from their bank account to a local food bank. The response elicited is similar to experiences such as eating sweets, engaging in social interactions, and sex.

So, what does this mean for marketers? For marketers of philanthropic causes or charities, it could have significant impact on how their organizations should be positioned and the design of advertising messages intended to influence giving. Strategies that seek to link philanthropic support to the benefits of support enjoyed by the giver may be used rather than a more traditional approach of emphasizing benefits received by the cause or charity. Likewise, companies that create cause-linked promotions for their brands can create marketing messages that paint a picture of consumers feeling good (self-image impact) in tandem with the knowledge that they are helping support a company’s social responsibility initiatives. Turns out that cause marketing is not only good, it is also good for you! Link

Demarketing of Kellogg’s Breakfast Products

The Kellogg Co. announced it would drastically change its marketing tactics to children under 12. Kellogg has set certain nutrional criteria for its kid-targeted breakfast products and has pledged to discontinue product placement and advertising in schools. In addition, the company will place place summary nutrition information on the upper right corner of each package. This strategy appears to be a form of “demarketing,” or taking steps to encourage responsible consumption. While consumers bear part of the responsibility to make good choices for themselves, marketers share in the responsibility to serve customers’ best interest by producing products that do not cause harm.

It can be debated whether Kellogg is being proactive in taking a stand to make a better product for children or reacting to pressures from advocacy groups to change its ways. Regardless of the motivation for this initiative, Kellogg is taking action that could to be very beneficial in creating long-lasting brand relationships with its customers. Sure, short-term pain may be felt as the company moves away from a dependence (perhaps overdependence) on advertising and marketing tactics to stimulate sales. However, the long-term impact on consumer trust and the potential impact on perceived quality of Kellogg’s products would seem to outweigh the effects of heavy advertising investments on moving the sales needle. Link