What a Logo Spot Is Really Worth

The quarter panel is still the first thing most racers try to sell. It's also the asset most likely to be overpriced. A logo spot does have value, but rarely the value racers put on it, and most of that value comes from things other than the decal itself.

A decal alone is worth about what it costs to print

Eric Kunz, a Canadian sports car champion who runs Eric Kunz Racing and has more sponsors than most drivers I know, put it bluntly on the sports car panel at my Motorsports Sponsorship Summit. "A logo on the car is about as much as it costs to print it. There's really not a lot of value in the logo," he said. "And it really depends. I have some very local sponsors that don't want the logo on the car at all, because there's no reason when I go to Quebec or Ottawa, there's no value there for them. So you have to find ways to bring value to that sponsor."

One of those sponsors is a collision repair shop. "They didn't give me any money," Kunz said, but when he damages the car, the shop repairs it. His side of the deal had nothing to do with the decal. "I took the car to their shop for a blues and jazz festival... We had our car right outside their shop, people were walking up and down the street, and everybody wants to stop and look at the race car. So that's how I provided that sponsor value." ▶ Watch Eric Kunz on the sports car panel

Notice what that sponsor actually got: people stopping at its shop during a busy street festival. The logo on the car was a small part of that.

What gives a logo value: size, clarity, position and crowding

When a logo does carry value, the companies that measure it can say exactly why. Fran Richards of Hookit showed the Off-Road Sponsorship Summit how the platform scores a logo when it shows up in a photo or video. Computer vision finds the logo, and then each appearance gets graded. "We really are looking at size, clarity and position of a logo, the amount of competition, the amount of crowding, and then the actual viewership that takes place," Richards said. "The more singular the promotion is for one brand, the more valuable it is for a brand."

She showed examples. A post with small, fuzzy logos scored poorly on its visuals. A typical motorsports post scored only 34 percent promotion quality, because "there's just too many brands in it." ▶ Watch Fran Richards explain the scoring

TV and video work the same way. The old method of valuing screen time against a network's rate card only holds up when the logo can actually be seen. "If you have similar amount of time on screen and it's a clear logo, it's clearly on the screen... then it has value to them, and you can probably use the rate card value very accurately," I told one Summit audience. The temptation is to work backward from the price you want, and you shouldn't: "What you don't want to do is guess or estimate a value based upon what you need or what you think the sponsor has the ability to pay. They know better than that." ▶ See the full valuations session

One brand at a time is worth more than seven at once

Rich Houseman, who manages commerce at Hookit, used billboards to explain why crowding hurts. "If you go down the freeway or you go across the track and you look over at K&N's banner, he for sure doesn't put Monster Energy on there, it's just K&N. And down a billboard on the freeway, McDonald's does not put Chipotle next to it," he said. "If you can conceptualize social media just like a magazine ad or a freeway, I do think your value goes way up."

He summed up Hookit's data in one line: "One post for one brand is worth 10 of yours that have seven on them." ▶ Watch Rich Houseman make the point

This changes how you should think about selling space on the car. A car covered in fifteen logos makes every one of them worth less, in photos, on TV and in every post you make. A clean livery with a clear primary sponsor is worth more to that sponsor and to every associate on the car.

A good primary spot shows up in other sponsors' marketing

The best-placed logo on your car keeps working after the race. Megan Meyer, the two-time NHRA world champion who co-hosts my Summits, learned this with her title sponsor. "NGK was the big title sponsor on the side of my car. They had the biggest logo placement in the best spot on my car, so it was easily seen in all the pictures, whether on social media or in print," she said. "Whenever, let's say, Lucas Oil uses one of my pictures in one of their magazine ads, it's promoting Lucas Oil, but then NGK is still getting a little bit of that exposure from that advertisement."

Every time another partner uses a photo of your car, the primary sponsor gets placement it didn't pay for. "The sponsors that do have those logo placements and those decals on your car, they can still get value from it without having to directly pay for it," Meyer said. ▶ Watch Megan Meyer explain this

That's a real reason to charge more for the primary position. Show the sponsor the photos, ads and posts where its logo appeared because someone else used your images.

Sponsors check how their logo looks

Brands that pay for a logo spot also check whether you look after it. Matt Burroughs of Monster Energy, who races UTVs himself, described what he watches for at off-road races. "You don't need to have a lot of money, and that's not where I'm going, but what is your presence like? What does your chase truck look like? Is your chase truck wrapped? If you are a Monster sponsor, where does the Monster logo, is it placed right? Is it clean?" he said. "Do you have an easy-up? If we've given you easy-ups, are they there?... All those little things are extremely important to Monster." ▶ Watch Matt Burroughs on presence

A logo that's peeling, hidden behind a number panel, or missing from the pit setup tells the sponsor how you'll handle everything else in the deal.

Sell the spot for what it leads to

Some of the most valuable logo placements in racing aren't about the crowd at all. Years ago, the man running Hewlett-Packard's IndyCar program told me at the Long Beach Grand Prix that the whole program paid for itself if a single big buyer placed one large order. At a PRI Show seminar I explained what that means for racers: "So it's not about selling to everybody who sees the logo on the car. It's about putting that one buyer of a major company into the hospitality or into the pits or letting them sit on the box or letting them come back and meet the team." ▶ Watch the seminar

None of this means the logo doesn't matter. Megan Meyer said so directly: "We're not saying that you shouldn't be trying to put logos on the car anymore. We're just saying it's so much more vast now." ▶ Watch the clip The decal tells people who you race with. What sponsors pay for is everything around it: the appearances, the photos, the introductions and the buyers who get to stand next to the car.

The takeaway

• Price a logo spot by how clearly and how often it's actually seen, not by how big it is on the car.
• Keep the livery clean. Fewer, larger logos make every placement worth more, including the primary's.
• Charge a premium for the primary position, and document every time it shows up in another partner's marketing.
• Look after the logo everywhere it appears: wrap, chase truck, pit canopy, helmet, crew shirts.
• Bundle the spot with what it leads to, such as appearances at the sponsor's locations, hospitality for its buyers, and content it can use.