A Utah-based energy drink manufacturer is taking a high-octane foray into the world of sports marketing this weekend at the Brickyard.
In an effort to highlight its newest energy drink, MonaVie LLC is partnering with Dale Coyne Racing and driver Tomas Scheckter to sponsor the No. 19 car at this year's Indianapolis 500 on Sunday.
While the South Jordan-based company is hoping to capitalize on a branding opportunity and the worldwide exposure of the sponsorship, there is some risk involved, particularly if the car is forced from the race early on — a fact acknowledged by one of the company's top executives.
"Regardless of how he does, it brands MonaVie," Henry Marsh, MonaVie co-founder, told the Deseret News. "If he does really well, it's just gravy."
Marsh, a four-time Olympian in track, said the sponsorship deal is a natural fit for his company that targets athletes and anyone interested in a healthy lifestyle.
The Indy sponsorship is the second major deal struck by the company. In September 2008, MonaVie announced an agreement to become an official juice of Major League Baseball's Boston Red Sox.
Due to the downturn in the national economy, his company was able to ink a deal for much less than companies would normally pay, Marsh said. Though he declined to give the exact amount of the agreement, Marsh confirmed it was a six-figure deal compared to the typical seven-figure deals sponsors have paid in previous years.
Marketing experts call the sponsorship of the race car an astute business decision.
"It gives the company a unique image," Himanshu Mishra, a University of Utah marketing professor, said in an e-mail to the Deseret News. "It helps them reach a very different market segment."
He added that these kind of sponsorships can often result "a lot of free media coverage, especially if the car wins."
"Now, if the sponsored car loses in the first lap … the main loss will be of money," he said. "It probably won't hurt the company's image. However, problems arise if the driver is accused of some wrongdoing (less likely to happen at the Indy 500). For instance, Nike suffered when Michael Vick was found guilty."
In terms of return on investment, Mishra said that it is pretty difficult to measure from such sponsorship events, especially if the company is doing it for the first time.
"In the short run, they should expect to see an increased top-of-the-mind brand recall among Indy 500 viewers," he said.
David Alcorn, professor of marketing at BYU, told the Deseret News that this kind of agreement can have an even greater impact for so-called "multi-level marketing" companies like MonaVie that are competing for a larger market share and more product distributors.
"When you are trying to recruit your consumer as a seller as well, you've got to have some message that sends out confidence in the organizational structure behind the product," he said.
"Not only will this give them an impression on the national viewer, but it will also help them with organizational development and recruitment," Alcorn said.
"They'll use this Indianapolis promotional film clip for recruiting for years."
Copyright 2015, Deseret News Publishing Company