Things can't be too bad in the mortgage industry when companies are getting back into NASCAR sponsorships, right?
LendingTree announced Thursday it would sponsor the rookie driver Parker Kligerman in Sunday's Daytona 500. LendingTree joins Quicken Loans among the first mortgage brands to re-emerge as NASCAR sponsors after the housing crisis.
Given the number of now-defunct former racing sponsors from the mortgage industry FirstPlus, Argent and Ameriquest come to mind it may be surprising to see companies re-enter the sport. But the reasons that drove those subprime lenders' sponsorship strategies are still relevant in today's industry.
"NASCAR's fans are fiercely loyal. They understand that sponsorships make their sport possible and they embrace those companies in the sport," says Aaron Emerson, a spokesman for Quicken Loans.
LendingTree's last-minute, one-race deal came a day after Kligerman was
"This is a short-term deal and we are looking to see what sort of performance and reaction we get to it," says Fred Saunders, LendingTree's senior vice president of marketing. "Part-in-parcel with that is also determining how we can leverage this sort of promotion as a bona fide business driver and to build awareness and business at the same time."
No longer a lender after selling its
"'When banks compete, you win' has been our tagline forever, and we've come back into the marketplace with a refreshed platform to help support our mortgage, auto and home services verticals," Saunders says. "We wanted a platform that was broad enough to support the new expanding profile of LendingTree."
Mortgage brands were a common sight on the hoods of racecars during the housing boom. FirstPlus Financial appears to be the first, sponsoring Jeff Ward and Eddie Cheever in the 1997 Indianapolis 500. A year later, FirstPlus moved from the open-wheel Indy Racing League to stock cars, sponsoring a NASCAR team co-owned by the NFL's Dan Marino and driver Bill Elliott.
But the sponsorship — which featured the FirstPlus name on the turquoise and orange No. 13 car resembling Marino's Miami Dolphins uniform — was short-lived. The race team struggled on the track, with rookie driver Jerry Nadeau getting replaced midseason after failing to qualify for 4 of 18 races. Meanwhile, FirstPlus had its own struggles off the track. The lender, which specialized in high loan-to-value home equity and subprime lending,
GMAC's subprime consumer-direct brand may best be remembered for its
This was of course, during the throes of the financial crisis. GMAC was spun off from General Motors in 2006 and later received a $17.2 billion bailout from the Troubled Asset Relief Fund in 2008. The Treasury Department announced plans last month to reduce its ownership stake in the finance company, now known as Ally Financial, to 37%.
The Ditech brand lives on, after being acquired by Walter Investment's Green Tree Originations business. Selling the name was part of Ally's efforts to reorganize its mortgage business into an entity called Residential Capital, which was put into bankruptcy.
For a time, it seemed like a mortgage tradeshow exhibit hall just wasn't complete without at least one racecar on display. Before Danica Patrick was GoDaddy's spokeswoman, she was Argent's, and a
Subprime lending's obsession with motorsports marketing seemed to know no limits,
Argent made Patrick the face of its campaign to
Meanwhile, Ameriquest was staying busy in NASCAR. It arranged a unique promotional package with Roush Racing to sponsor four drivers in what was then called the Busch (now Nationwide) Series, the NASCAR equivalent of baseball's triple-A minor league.
While a typical sponsor will have its logo on a single car, the four Roush drivers split up the driving duties on two Ameriquest-sponsored cars throughout the 2006 season. In two events that year, all four drivers took to the track. Dubbed the "Ameriquest Dream Team," the drivers combined to win five races in 2006, including a race in California where Carl Edwards started from the pole and finished third, and teammate Greg Biffle started third and won the race — with the Ameriquest logo on both cars' hoods.
Argent and Ameriquest's motorsports sponsorships were part of a wide range of professional sports marketing efforts. Ameriquest was heavily
As the 2006 season came to a close, Ameriquest announced plans to move its sponsorship to Biffle's team in the Cup Series the following year. But the Ameriquest dream came crashing down just four months later. Amid growing troubles at the lender, it asked to be released from its multiyear sponsorship with the Roush organization.
In addition to being the "Official Mortgage Company of NASCAR" from 2005-2006, New Century Financial Corp.'s subprime lending subsidiary
As a drag racer, Ashley set a funny car world record by reaching 334.32 mph in 4.725 seconds. As chief strategy officer of Lend America, Ashley allegedly told loan officers "loans should not be closed in two weeks or a month, but in eight hours," which the Justice Department claims fostered a culture that encouraged fraudulent lending practices.
Others mortgage brands that have sponsored race teams over the years include American Liberty Mortgage, Arbor Mortgage, Benchmark Mortgage, Champion Mortgage, Henderson Mortgage, and M&M Mortgage Corp. There's even one example of an individual loan officer getting in on the action:
Before it began sponsoring NASCAR driver Ryan Newman in 2012, Quicken Loans got its first taste of racing sponsorship when its logo appeared on open-wheel cars driven by Helio Castroneves and Gil De Ferran in the
Quicken Loans founder Dan Gilbert also
It
For the past two years, Quicken has been the title sponsor of a race at the Michigan International Speedway, which is located in the suburbs of its
"As a Detroit-based company, the spring race at Michigan International Speedway made a lot of sense to sponsor. We are able to invite nearly 1,000 team members and their families to the event. It is a very prized ticket to receive around the office," Emerson says.
Quicken runs TV commercials during races and has the naming rights for the "ESPN Quicken Loans Pit Studio" where the network's analysts shoot programming throughout the race weekend. It also has a
"Our involvement in the sport centers on integration," says Emerson. "While each piece could stand on its own, from a visibility and authenticity standpoint, we feel the entire package is the best way to be part of motorsports."
One thing that's evolved since the heyday of the mortgage industry's motorsports marketing is the rise of social media. NASCAR fans engage with the sport's stars on Twitter, and during races, there's a vibrant discussion among fans, NASCAR and team officials, sponsor brands and media covering the event — all of which can be tracked, measured and valued.
"The teams and NASCAR are getting savvier about how to measure the value of what they sell beyond just TV rating points and PR pickup," says LendingTree's Saunders. "There's a lot more out there in terms of the share-ability and viral nature of the drivers, teams and what the fans are saying, which gives us a lot we can measure."
Numerous financial institutions have also participated in NASCAR sponsorships over the years. Bank of America and the credit card issuer it later acquired, MBNA, each issued NASCAR-themed credit and debit cards and served as the title sponsor of races. GreenDot currently issues a NASCAR-themed general purpose reloadable debit card. Banks like BB&T, One Main Financial and Fifth Third have sponsored teams, but the sluggish economic recovery has kept activity low, at least for now.
So with the economy getting back on track, are more lenders ready to start their marketing engines?
"NASCAR represents a pretty interesting opportunity for a variety of brands, so I wouldn't be surprised to see more financial institutions get involved in NASCAR, or any sport for that matter, as we as a country, and the industry, get healthier," says Saunders. "But the difference this time around is there is a much sharper eye on the return on investment.
"We're not on the car just to be on the car. We're there as a door to a more robust bottom-line return. That will be the new dynamic behind these types of promotions."