Dale Earnhardt Jr. in his National Guard-sponsored car leads at Talladega. / Chris Graythen Getty Images
WASHINGTON - At the same time the National Guard committed to a $26 million NASCAR sponsorship, the Army scrapped its backing of the auto racing giant in 2012, citing its declining popularity with potential recruits and its high cost, according to a memo released by the Senate.
Army research showed "that NASCAR is declining against our core audience" of 18 to 24-year-olds. Moreover, the sponsorship represented "the highest cost per qualified" recruiting prospect in the Army's advertising portfolio, Mark Davis, director of the Army Marketing and Research Group, wrote in a memo to Army officials.
The Army's decision to end its sponsorship of NASCAR left the National Guard alone among the services in sponsoring NASCAR. That relationship, at the cost of $88 million over the past three years, has been scrutinized by Sen. Claire McCaskill, the Missouri Democrat who chairs a panel on contracting and financial oversight.
The National Guard could not trace a single recruit to the NASCAR sponsorship in 2012. Despite the lack of recruiting success, the Guard has continued the sponsorship. In 2014, the Guard paid $32 million on NASCAR-related sponsorships and another $12 million to back Rahal Letterman Lanigan Racing, a competitor on the IndyCar circuit.
"Aggressive recruiting is key to maintaining the strength of our military, but at a time of reduced budgets, Congress has a responsibility to ensure that every taxpayer dollar spent produces measurable results," McCaskill said in a statement. "This isn't about demonizing NASCAR or the National Guard. We simply need to get to the bottom of whether or not these sports sponsorships are a wise use of federal tax dollars and whether we're getting a real return on investment."
The Guard maintains that its racing and sports sponsorships, which make up 37% of their marketing budget, are aimed at bolstering its "brand," not necessarily for recruiting. NASCAR officials, meanwhile, point out that major corporations continue to invest in sponsorships because they work. For example, this week Michael Waltrip Racing renewed a long-term sponsorship with 5-Hour Energy. The energy drink's top executive indicated the reason for renewal was a strong, measurable return on investment, according to David Higdon, a NASCAR spokesman.
The Army, however, found NASCAR did not fit its recruiting needs in 2012, according to Davis' memo. Army analysis found better value in producing "leads," prospective recruits, by sponsoring National Hot Rod Association (NHRA) events, including drag racing.
"Currently, only 5% of the NASCAR audience is made up of 18-24 year old males," Davis' memo says. "NASCAR is the highest cost per qualified lead and cost per engagement property in our portfolio; cost-per-lead is three times as expensive as the NHRA."
Davis told Army officials that he intended to use the NASCAR money to "drive more of our marketing online: We must meet our prospects where they are, and that is online."
The Army should also refocus on reaching potential recruits in high schools and to "identify and engage prospects around other relevant passion points," Davis wrote. "There is a wide array of opportunities in technology, music, sports and automotive (NHRA) that provide the Army an increased number of engagements for far less cost than participating in NASCAR."
The military regularly scraps sponsorships that fail to produce recruits. In the past 10 years, the Army and the Guard have cut backing for 3 on 3 Basketball, the American Drag Racing League, Paintball and Rugby, according to information collected by the committee.
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