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The Curious Case of NAPA and Michael Waltrip Racing

s1 14253Much of the motorsport media, and NASCAR in particular, will look at the departure of NAPA Auto Parts (NYSE: GPC) from Michael Waltrip Racing (MWR), a relationship which has lasted well over a decade, as the ultimate indignation against the bereft team. With the recent race-fixing scandal ultimately keeping the NAPA-sponsored No. 56 of Martin Truex from contending for this year’s championship, it’s an understandable decision.

However, if you want to look at the business of NAPA Auto Parts in NASCAR, the real question is… will they continue in the sport? The future of NAPA in NASCAR will tell us a lot more about the state of the sport; well after Richmond has been forgotten.

Put simply, if NAPA chooses to run in NASCAR with another organization, then it truly was a perception-driven choice to leave the befallen MWR. However, if we fail to see the familiar blue and yellow colors in 2014, perhaps there are other factors at work in their NASCAR departure.

NAPA is, by all public accounts, a very healthy company. The parent organization, Genuine Parts Company, has enjoyed a steady and measurable growth ever since it became public. In 2012, the company boasted over $13bil in total earnings, and over $1bil in total operating income. 2013 appears to be on the same course.

068795What is curious about NAPA’s approach to motorsport, is the company’s very conventional use of the assets available to them. Currently, they’re involved in two high profile programs, one with the aforementioned No. 56 Toyota Camry in NASCAR, and the other with Ron Capps’ Dodge Charger in the NHRA Funny Car ranks.

The company makes a very visible effort to be adorned on both programs. Both cars run a very familiar blue and yellow livery that has, for the most part, been unchanged since it began. Both of their drivers, Truex and Capps, as well as long-time brand ambassador Michael Waltrip, are in a number of commercials that air beyond motorsport programming. Additionally, the company does run a few customer-oriented programs, namely their “honorary crew member” contest which places one lucky customer behind the scenes at a number of events.

 

However, beyond that, the brand has never shown any discernible effort to leverage their place in motorsport from within. We have yet to see a NAPA vendor adorned in a primary position on the car similar to how you might see with Target and Chip Ganassi Racing, nor have we seen NAPA make a conscious effort to promote any sort of specific program within the company, similar to how the Lowe’s-sponsored No. 48 car often runs a “Kobalt Tools” car, which is coincidentally the Lowe-s produced line of household tools.

MartinTruexJr2013NASCARSprintMediaTourqM7Ost3Q8lalThe landscape of advertising has changed dramatically since NASCAR and Michael Waltrip paired over a decade ago. At that time, when both sponsor and then-driver Waltrip signed on as part of the legendary Dale Earnhardt’s organization (DEI), the culture of on-line advertising and multimedia advertising had not found its footing in the way it has today. NASCAR’s television package had put the series on-par with NFL levels of marketing value and exposure, and for an automotive brand it was a perfect fit.

In 2013, NASCAR’s place as an advertising medium for automotive enthusiasts is still relevant, but the advertising culture has shifted dramatically from seeing the same value.

Put simply, you can do it cheaper.

With several, targeted ways to reach a similar audience, we’re seeing more and more Fortune 1000 companies continue with NASCAR, but limit their sponsorship to only select events. Those who can negotiate it, are only running the key events that interest them and skipping the rest (such as Home Depot with Joe Gibbs Racing), whereas others (ie Target, who has strong ties to team owner Chip Ganassi), choose to look at their race team as a business-development asset, and in such use their program to exchange both sponsorship and VIP experiences as a bartering tool to their vendors and regional affiliates.

In other words, the large companies who continue to do business in NASCAR, are either limiting their programs or getting very creative on how to create a return (or at the very least reduce their overall expense). NAPA is one of the few who has, for the most part, continued to do business in the sport very similarly to how the did over a decade ago.

171233586The health of NAPA and GPC has proven the company clearly runs an efficient and effective operation.

With all the opportunities in modern media to promote themselves, their plans in 2014 will answer a lot of questions on whether a “conventional” sponsorship approach in NASCAR still works.

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