Oct 22, 2009 at 04:04 PM
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Poll: Give Away the Tix, Sell the Sponsors?

The web 2.0 model says grow as fast as possible by providing free content, and then once you've scaled your audience, monetize it through advertising. Today, CNBC's Darren Rovell profiles the American Drag Racing League, which has taken that model offline by offering free tickets and in the process has doubled overall revenue (85% of which from sponsorship).

Here's how ADRL pulls off the new strategy:

  • Six weeks before every event, ADRL starts handing out tickets in each local market
  • Anyone who takes a free ticket must opt-in to having communication with the league’s sponsors, as a stipulation of the ticket
  • The league has doubled revenue breaking down by 85% sponsorship, 10% merchandise and 5% parking
  • Attendance has grown by 31% year over year.
  • The National Guard is title on the league and Hardee’s, Ford and Safety-Kleen have title sponsorships on races.
  • Most interestingly, ADRL CEO Kenny Knowling says that they target demographics based on sponsor objectives. "We target who are sponsors want us to target," he told Rovell. "If they want a stronger Hispanic demographic in the stands, we can hand out more tickets in Hispanic neighborhoods.”

    In an article earlier this week, Mike profiled a property called Playmaker that is pursuing the exact opposite strategy. It's sacrificing some growth, in exchange for focusing on a niche and perhaps more loyal audience than it would have had under a "free" model. The theory here is that by focusing on a more niche audience, you'll probably be able to find advertisers that are more targeted to the collective interest, thereby making it more lucrative to both sponsor and property.

    They are not alone as the pendulum for content continues to swing back and forth on paywalls, among media and entertainment's elite and niches, alike.

    But ADRL's new model, and their apparent success, suggests that by giving away free you can dictate who your demographics are. Rather than a company sponsoring the existing content/sport/media, it's really the sponsor deciding who should be watching that content/sport/media. The flexibility may entice sponsors initially, but for the long run viability of the sport this could be a risky strategy. Nevertheless, doubling revenue through sponsorship in a down economy is a pretty impressive feat so we throw it out to you:

    Until we get this resolved, please visit a few of our sponsors!... eventbrite.com, PR Web and branders.com.