Craftsman wants its marketing to be 'more disruptive'

By Michael Smith

Thursday, December 13, 2007

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Craftsman isn't leaving motorsports, Scott Howard insists, but it will terminate its title sponsorship of the NASCAR truck series at the end of 2008, two years before the end of its current five-year deal.

Craftsman is the only title sponsor the series has had since its inception in 1995.

Howard, manager of marketing partnerships for Sears, said Craftsman's departure also will bring an end to its status as the official tool of NASCAR. The current agreement was supposed to run through 2010, but Craftsman exercised a termination clause for the end of next season.

Whether the next move involves a track deal, a team sponsorship or some other media play, Howard isn't sure yet, but whatever Craftsman does, he wants it to be "disruptive."

"We want to elevate and change the perception of the brand," he said. "We don't want to just do what everybody else is doing, but we want to make it bigger and better. We're looking for ways to break through, be a little more disruptive. We're going to be playing in positions that you might not expect to see the brand."

Steve Phelps, NASCAR's chief marketing officer, said the search for a new series sponsor began right away last week when news of Craftsman's departure was released. Howard said he advised NASCAR of Craftsman's intent to terminate its contract in July, but both sides agreed to keep it quiet because NASCAR was in the process of selling title sponsorship of its No. 2 series, which went to Nationwide Insurance.

Phelps said it was important to finalize that sale before beginning to sell the truck series. That effort will be led by Jim O'Connell, NASCAR's vice president of corporate marketing, and his sales team out of New York, along with Daytona Beach, Fla.-based Jim Obermeyer, managing director of brand and consumer marketing.

"We didn't want to be out there selling two (title sponsorships) at the same time," Phelps said. "Additionally, we wanted to make sure this season had ended for Craftsman and the truck series before making the announcement so that we didn't take the focus off the important thing, which is the racing."

The truck series has been a solid performer on Speed, where nearly all of its races are carried. Two truck races were broadcast on Fox this past season. Speed said that Nielsen Media Research numbers show a surge in viewership, up from an average of 659,000 viewers per race in 2006 to 686,000 this year. Its 0.7 cable rating was down slightly from last season, but the network has expanded its household distribution to 78 million.

Speed will be incorporated into the process as a partner asset, Phelps said, but NASCAR will sell the property.

"The process will look very similar to the process we employed with the Busch replacement," Phelps said. "We'll cast a wide net to companies we believe we'd want as replacements and ones that have the significant marketing resources to promote the series."

When asked whether the truck series lends itself to an endemic sponsor from the automotive aftermarket world, Phelps said perhaps, but he added, "We'd love to get a new sponsor into NASCAR that isn't already here. If not, fine, but we don't want to rob Peter to pay Paul."

Howard said the management changes Sears has been undergoing led to some different marketing initiatives as the retailer tries to create a trendier image. Craftsman took a step in that direction this past season by sponsoring with EA Sports the NASCAR '08 Challenge, a video game competition held at Sears outlets and online. Craftsman also bought product placement in the game.

More recently, Sears has pursued the acquisition of retro-themed Restoration Hardware, another move seen by analysts as an attempt to modernize Sears' image.

These changes come at a time when Sears' profits are withering. The company last week announced a 99 percent drop in third-quarter profit.

Sears' earnings in the quarter were $2 million, which led to questions from analysts about the direction of the company under chairman Eddie Lambert. While not addressing those results specifically, Howard said Sears will put an emphasis on finding a different way to engage the fans.

"You come to a point in a changing marketplace, with the way sponsorships are, that all of your relationships have to be meaningful for the customers," Howard said. "We've had a change in marketing initiatives, and the way we go about doing business is different."

Michael Smith is a reporter with SportsBusiness Journal.