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Monster Energy proving to be ideal title sponsor for NASCAR Cup Series

The first few months of Monster Energy’s entitlement sponsorship of NASCAR have seemed positive for all involved.

Monster Energy NASCAR All-Star Race Photo by Streeter Lecka/Getty Images

NFL superstar and professional partier Rob Gronkowski celebrating in victory lane at the Daytona 500. Events in the fan zone featuring MMA fights and stunt motorcycle riders enclosed inside a steel structure coined the “ball of death.” A planned world-record motorcycle jump on Talladega Superspeedway’s frontstretch just minutes before the start of the race, only scrapped because the stuntman injured himself practicing.

A dramatic departure from what one normally would associate with NASCAR, a sport whose roots may be traced to bootleggers outrunning federal agents, but over the past two decades has become more corporatized to better cater to the Fortune 500 businesses injecting vast sums of dollars into stock car racing at the highest rung.

But while Monster Energy represents a seismic shift from how NASCAR typically engaged consumers — new and old alike — the company’s approach to marketing is also precisely what NASCAR sought when it entered into a two-year agreement with Monster to serve as its Cup Series title sponsor, Steve Phelps, NASCAR’s executive vice president and chief global sales and marketing officer, told SB Nation. That deal is now reaching the halfway point of its first season.

“The first half has exceeded our expectations,” Phelps said. “I think it’s been an extraordinary relationship for us and I think for them as well.

“We brought them on board because of who they are, that was a very conscious decision we made. We would take this high energy, a little edgier, maverick brand and bring in as our top sponsor. … The marriage is working quite well for us both and I believe the big winner is the fans.”

Two prevailing themes have emerged thus far in the partnership between a company whose approach is outside the box and tends to do the opposite of conventional wisdom, and an image-conscious sanctioning body that often skews conservative.

Motorcycles race around the inside of a small steel ball.
The Ives Brothers performed in the “Ball of Steel” prior to the Daytona 500 in February.
Photo by Jonathan Ferrey/Getty Images

Monster is acclimating itself nicely to a fan base with a deserved reputation for looking at outsiders skeptically.

If there is one universal characteristic among the majority of NASCAR fans, it’s their collective love to have a good time. And on that front, Monster is delivering, while also admittedly still learning what works and doesn’t in how to best promote its energy drinks.

Under Sprint, which had the role of entitlement sponsor for the previous 13 years, fan promotions frequently were more muted and buttoned up. Such a mentality one would never confuse with the one possessed by Monster, whose mantra is “girls, parties, and motorsports.” Both Phelps and Mitch Covington, Monster’s vice president of sports marketing, say none of the ideas Monster has presented to NASCAR in trying to position itself as the fun and different alternative have faced any pushback.

“That’s us doing our part and I think we’ve delivered in spades on our end of the deal to bring a lot of fun and excitement and bringing new fans out to the track,” Covington told SB Nation.

As NASCAR prepares to revisit many tracks for a second time this season, Covington says to expect much the same with a new wrinkle or two along the way. “We may have a surprise to make things even more fun,” he said. Although he wouldn’t delve into specifics beyond hinting at additional concerts like the one Monster brought rapper Machine Gun Kelly to play following the May 20 All-Star Race at Charlotte Motor Speedway.

“We didn’t know how NASCAR fans would react to him,” Covington said. “We were really nervous about it because he’s not a country music guy, but it ended being an overwhelming success. We’re going to continue looking for opportunities to bring in artists we work with to do more of that.”

Monster Energy NASCAR Cup Series Folds Of Honor QuikTrip 500
A Monster Energy truck performs in the Fan Zone prior to Cup Series race at Atlanta Motor Speedway last March.
Photo by Brian Lawdermilk/Getty Images

On the business side of things both parties are achieving their stated goals.

Thanks in part to its own marketing initiatives accompanied with Monster’s distinctive methods, Phelps said NASCAR is successfully transforming itself into a sports entity more appealing to a younger demographic. (NASCAR would not share data with SB Nation supporting this.)

At the same time, NASCAR and Monster both have worked to ensure longtime fans don’t feel alienated by the noticeable push to entice millennials to attend races. During its zenith in the early- to mid-2000s as the sport flourished, ratings and attendance skyrocketed, and it expanded to new tracks well beyond its southeast base, NASCAR often struggled to keep its core followers content while courting new fans.

“When you go out to their display area at the racetrack, you certainly see a youthful crowd that is there; a different-looking crowd,” Phelps said. “That said, you also see what I would call our ‘core fan.’ So it’s been this mix of a millennial fan and older fans.

“And the core fans have embraced Monster really well and are very pleased that there are new options and opportunity to see something unique, different, and fun at the racetrack.”

Monster is accomplishing its agenda by leveraging its affiliation with NASCAR to enhance its brand awareness. Among the particulars of an agreement struck with Kroger, the United States’ largest supermarket chain by revenue — $115.34 billion for fiscal year 2016 with almost 2,800 supermarkets throughout the country — Monster gets greater shelf space in return for Kroger being allowed to have signage on the race-winning car in victory lane.

In a promotion between Monster and Pocono Raceway earlier this month, any fan who came to the track with an empty can of Monster on the Friday of the race weekend was given a free ticket for that day’s activities, which included Cup Series qualifying, Xfinity Series practice, and a 200-mile ARCA race. The concept is something Monster has done at motocross races and Pocono president and CEO Brandon Igdalsky thought it could benefit his track.

“How they message their fan base is different from how we’ve done it in this sport, but it’s a great way for us to look into the future and how engagement needs to happen,” Igdalsky told SB Nation. “It’s a different day and age now, and I think Monster is a great partner looking forward and how we need to market and brand.”

NASCAR may not have been directly involved in what Monster and Pocono formalized, but the sanctioning body certainly benefited from the marketing campaign that saw significant exposure in stores across Pennsylvania and into New Jersey and Upstate New York. “Several thousand” cans were collected on a day that otherwise would’ve been sparsely attended, Igdalsky said.

“There were fans here that otherwise might not have come,” Igdalsky said. “Watching people come in, you had normal race fans but a lot of people who were at their first race and a much younger crowd coming in.”

Coinciding with its foray as Cup Series entitlement sponsor, Monster had a first-quarter net sales increase of 9.1 percent, improving from $680.2 million to $742.1 million, compared to the same period last year: strong indication its contract with NASCAR valued at $20 to $25 million annually isn’t negatively impacting its bottom line.

“With the deal not coming together until the waning moments of 2016, so we’re still ramping up and learning about this very large and complex property,” Covington said. “We’re definitely getting the exposure, but it’s too early to tell about a return investment.”

Despite the positivity, there have been challenges.

With NASCAR having Coca-Cola as its “official soft drink,” Monster is restricted from advertising its Mutant citrus brand drink under the terms of its entitlement sponsorship of the Cup Series, as the product is considered a soda.

And with some teams — most notably PepsiCo-backed Hendrick Motorsports featuring popular drivers Chase Elliott, Dale Earnhardt Jr., Jimmie Johnson, and Kasey Kahne — having contracts in place with companies that compete against Monster in the marketplace, there’s been some rebuffing to display Monster logos on its cars outside the track. NASCAR only requires teams to display series sponsorship logos at the track during race weekends.

“When you see our cars at the track, they'll have the Monster logo on the windshield, on the side of the car, guys will have it on their uniform,” team owner Rick Hendrick said two days before the Daytona 500.

There is also the matter of Monster only signing on for two years (with options), creating the impression it may not be the longstanding partner NASCAR needs as it attempts to rejuvenate itself in the face of declining television ratings and subpar attendance. Monster’s reluctance to embrace traditional forms of marketing like media buys adds to the consternation that the company may not be committed beyond 2018.

These issues aren’t all entirely new, however. Nextel (which was later purchased by Sprint) experienced similar conflicts with competitors, especially in the early years after it took over from R.J. Reynolds’ Winston cigarette brand when many teams already had existing contracts with telecommunication companies. And Covington says Monster is considering airing national television commercials, something the energy drink maker normally shies away from.

Industry sources don’t deem any of this as potential deal breakers. The expectation is Monster and NASCAR will eventually broker an extension when the time comes to open re-negotiations.

“I think this will live past this existing contract and go to a future contract,” Phelps said. “The numbers thus far in terms of acceptance, awareness, the way fans are embracing [Monster’s] product in terms of consumption and the retail success Monster has achieved, it would make sense for both NASCAR the sport and Monster Energy the company to continue well into the future.”

The story was updated at 9:30 p.m. ET