Published June 20, 2016, Page 8
Under the standard sponsorship model for the sport, brands pay teams for a predetermined amount of assets, such as paint schemes, driver appearances and social/digital integration. Outside of make-goods or other concessions, the value of the deal generally is constant regardless of how much exposure ultimately is generated by those assets.
Under Circle Sport-Leavine Family Racing’s new model, which is akin to television ad guarantees, sponsors can buy one of three packages that come with a set number of cost-per-thousand impressions, or CPMs. A bronze package comes with 50 million impressions at $7 CPM, or $350,000 total; a silver package worth 300 million impressions comes at $4.60 CPM, or $1.38 million; and a gold one worth 1 billion impressions comes at $3 CPM, or $3 million.
That number, which can be reached by doing anything from getting on TV during races to getting mentioned on social or digital media, must be met before a deal expires.
In comparison, a typical primary Sprint Cup team sponsorship for the 36-race season ranges from $3 million for a backmarker to $30 million for a top car.
“Working with previous teams and clients, every partnership I ever put together always went back to what [the sponsor’s] total CPM was when they were looking at re-upping or getting back into it,” said Joe Chisholm Jr., new business specialist for CS-LFR, who helped put the program together. “So we said, ‘Let’s create a program with a focus on this and then create a model where we can easily display this to the partner upfront.’”
CS-LFR has already found one new taker for the system in internet security company Malwarebytes, which is coming aboard for the rest of 2016 in a deal that is valued in the mid to high six figures and will be unveiled this week. CS-LFR, which charged low six figures per race for primary sponsorship under the old model, is working with third-party research firms Navigate Research, IEG and Repucom on the effort. Sponsors are able to choose any of those companies to produce biweekly reports.
The model is seen as most likely to appeal to media-heavy business-to-consumer brands that are eyeing social and digital media as mediums that can make up for a potential lack of TV time during races.