Paul Holmes 31 Aug 2004 // 11:00PM GMT
Among the athletes, the big winners included American swimmer Michael Phelps (six gold medals), British sprinter Kelly Holmes, the U.S. women’s soccer and softball teams, Moroccan middle distance runner Hicham El Guerrouj, American gymnast Carly Patterson, and the Iraqi men’s soccer team—for whom the bronze medal was an incredible achievement. But among the corporate sponsors of the 2004 Athens Olympics, who left an indelible impression, and which companies stumbled like British marathoner Paula Radcliffe fell as flat as the U.S. men’s basketball team?
The 2004 Olympics were the biggest and most expensive in history, with 11,100 athletes from 202 nations competing in 28 sports, and a price tag of at least $8.5 billion. Corporate sponsors covered about 30 percent of the organizers’ expenses, according to the Athens 2004 organizing committee.
But Olympic sponsorship poses some unique challenges. To a casual observer, the Games may seem to be over-commercialized beyond all reason, but the organizers still place restrictions not found at any other event on their corporate supporters. According to the Olympic charter, “all Olympic events must take place in an environment that is free of commercial, political, religious and ethnic influence, as well as any kind of publicity.” That means all Olympic venues are free of advertising—no billboards or banners around the stadiums, no matter how many millions of dollars sponsors have paid.
In addition, there’s tremendous competition for attention. In addition to the 11 TOP international Olympic sponsors—TOP stands for The Olympic Partners—who spent a combined $600 million to be associated with the Games, every national organizing committee has its own sponsors, as do many of the governing bodies for individual sports. And then there are those companies with no official connection to the Games who would nevertheless like to bask in their glow, to “ambush” the event.
So having paid $80 million or so for sponsorship rights, some TOP companies spend that much again to ensure they get the maximum benefit. A decade or so ago, that might have meant advertising, and probably a hospitality tent at the Games for key customers. Today, it almost certainly means a full-scale integrated marketing campaign using advertising, sales promotion, external public relations and internal communications, probably directed at multiple stakeholders, from customers to opinion leaders to suppliers and employees.
“Buying an Olympic sponsorship is only the tip of the iceberg in generating a return on the investment,” says Alan Taylor, founder of sports marketing specialist Alan Taylor Communications, which has worked with sponsors at every Games since 1984. “Sponsors will get their return if they activate the sponsorship. Activation comes in various forms ranging from sweepstakes to an in-store call to action to PR to advertising to internal communications.
“Buying an Olympic sponsorship should not be looked at as a one year or one month event. Sponsors have a four-year run to generate a return on their investment. Most companies, however, activate in the year of the Games.”
Bob Hope, principal at Atlanta-based public relations and event management firm Hope Beckham, agrees. “The Olympics is a very powerful integrator of all marketing disciplines inside a company,” he says. “It is strong enough as a property to break down the normal silos of independence that tend to wipe out normal efforts at integrated marketing on any brand. This integration is more important today than ever before because of the proliferation of media options and technologies that make traditional mainstream media less effective than it once was. Using the Olympic image and power to pull together disparate efforts into a cohesive and compelling marketing program is important.”
The companies that get the most out of an Olympic sponsorship are those that focus on the Games to the exclusion of all else.
“The Olympics must take priority over other conflicting sponsorship properties for the 60 days leading into the Games and throughout the Games,” says Hope. “There has to be a period of about 90 days when all reasonable communication of a company is integrated with a cohesive Olympic theme. Anything less that an all-out effort is like getting to the Super Bowl and deciding to play your second string. It is a chance to be bold and show off your best marketing thinking and be truly electric and charismatic as a company. A few did that this time around.”
And, of course, companies need to understand what they want to get out of a sponsorship.
“Companies first need to understand the dynamic of event sponsorship and that the decision to get involved in something like the Olympics cannot be done in a vacuum,” says Nobs. “And there must be a realization that the cost of sponsoring the Games is merely a platform on which to build an integrated marketing and communications program.
“Each sponsorship program needs to be tailored to achieve specific, measurable results and evaluated using several criteria: the financial value from the sale of products and services derived from the Olympics; the pre-emptive value of keeping the competition out; brand image value gained by associating with the ‘rings’; and the intangible value for the company of its ability to use the Olympics as both an internal and external rallying point.”
Even so, questions remain about whether companies get real value for their sponsorship dollars.
In the wake of Euro 2004, the European soccer tournament held earlier this year in Portugal (and a far bigger deal in Europe than the Olympics), a Marketing Week survey found that more than half U.K. adults failed to recognize any of the tournament’s eight official sponsors, and two-thirds could not recall any of their advertising.
The eight main sponsors—Canon, Carlsberg, Coca-Cola, Hyundai, JVC, MasterCard, McDonald’s and T-Mobile—spent £10 million on their sponsorship. But T-Mobile was recalled by only 3 percent of those questioned; almost as many wrongly attributed sponsorship to rival Vodafone. Similarly, Nike was identified (wrongly) as a sponsor by almost as many people who knew adidas had been a local sponsor.
“Asking a generic group of consumers about whether they can identify sponsors is probably not the most sophisticated way to measure the success of an event,” says Alun James, managing director of sports marketing and sponsorship at Hill & Knowlton. “Different sponsors have different objectives. They may be targeting different geographic regions or different audiences. Some sponsors are looking to reach a huge consumer audience around the world. But business-to-business marketers might be running a much more targeted campaign.
“And people don’t necessarily consciously register the names of sponsors, even though they make an unconscious association. For every piece of research showing sponsorship doesn’t work, there’s another showing it does.”
Other studies suggest that Olympic sponsorships in particular yield other benefits. According to market research firm Dynamic Logic, most consumers view Olympic sponsors as “industry leaders” (46 percent), an opinion that varied only slightly among North Americans and Europeans (50 percent versus 40 percent, respectively). Consumers also recognize and appreciate the support of companies who sponsor the Olympics. Nearly half (49 percent) of those surveyed believed that they would not be able to view any of the Games or events on free or public access television without the advertising sponsors, with 58 percent of North Americans holding that view, compared to 39 percent of Europeans.
“The Olympics has a prestigious image,” says Il-Hyung Chang, senior vice president at Samsung, one of the 11 international Olympic sponsors. “We want to take that kind of image from the Olympics to our company corporate image. The Olympic Games are amateurism. So even though [organizers] restrict marketing activities, the sponsorship… gives us a greater chance to elevate our image as global corporate citizens and as a very prestigious company.”
Although there is no direct advertising in the stadiums, “all the consumers and fans that go to the Olympics have the opportunity to be drinking Coca-Cola while they’re watching the Olympics. And that’s really the experience that we’re looking for,” McCune said.
“The Olympics is truly a global property, yet it has local presence in all of the countries through the national Olympic committees,” says Scott McCune, Coca-Cola’s vice president of worldwide sports, entertainment and licensing. “And Coca-Cola is certainly a global brand that is relevant in 200 plus countries around the world. So structurally, it’s a very good match. And then from a branding standpoint, both Coca-Cola and the Olympics share some very important values.”
It also helps that the Olympics, unlike other major sporting events such as the World Cup of soccer or the Super Bowl, has tremendous appeal to non-sports fans.
“The overall challenge facing the Olympics and its ability to continue to charge millions and millions of dollars is how to stay relevant to a younger audience that has a myriad of sports and entertainment options at their fingertips, including the ever-increasing popularity of extreme sports and rapidly growing video game market,” says David Nobs, general manager at entertainment marketing specialist Rogers & Cowan.
“That said, the Olympics still provide a terrific platform for companies to market their products and communicate their services and points of differentiation on a global, national and even local basis and give sponsors a great opportunity to roll everything into one package—television, onsite hospitality, advertising, media exposure—if it’s done right.”
And there were reasons to be particularly anxious about the Athens games. Before the Games, says Nobs, “everyone associated was apprehensive and challenged in how best to activate their sponsorship programs. News of construction delays, threats of terrorism and general safety concerns all served to neutralize the buzz that usually surrounds the Games and threw into question its status as a premiere branding opportunity for those involved.”
As a result, Olympic marketing activity was lower than in some previous years. In the U.K., for example, only 3 percent of all marketing activity taking place in the run-up to and during the Olympics related to the event—perhaps because so many potential advertisers had burned much of their ad budgets during Euro 2004.
That compares to Australia, where 80 percent of all advertising and marketing activity was related to the Games or Italy, where 60 percent of advertising was Olympics-related. In the U.S., there was considerable variation from market to market, with interest levels high in Hawaii and Portland, Ore., but considerably lower in Minneapolis and Atlanta. (The data is based on a survey by ICOM, a network of independent communications firms with its headquarters in Colorado. Member agencies were asked to rate the level of interest in their respective communities.)
“Clearly, the world situation made it sensitive and difficult for any global sponsor to figure out just how to approach the Olympics as a marketing property,” says Hope. “As it turned out, they all should have approached it as if it was business as usual, which is what it turned out to be. We are all guilty of over-thinking and my guess is that a lot of anxiety was generated over what to do and what not to do in using the Olympics.”
That’s because, at the end of the day, the Athens games were adjudged a success. They began with a scandal—two Greek medal favorites failed to show up for their drug tests and eventually withdrew from the Games—and generated their share of controversy: from judging errors that wrongly awarded a gymnastics gold medal to an American competitor to a religious fanatic pushing a leading marathon runner off course.
But after 17 of thrilling competition, after the closing ceremonies were held and as athletes made their way home, “I think everyone would agree in hindsight that the Athens Olympics were one of the more successful in recent memory,” says Nobs.
According to Advertising Age, the U.S. Olympic TV audience was up more than 10 percent from the 2000 Sydney Olympics. Many of these additional viewers were women (ages 25 to 54) who were watching U.S. gold medal performances in women’s beach volleyball, basketball, and soccer. The male audience for basketball, track and field and boxing, however, appears to have declined.
So not surprisingly, there were some big winners among the sponsors.
Coca-Cola was the first company to establish its association with the Olympics in the minds of consumers, says Nobs, thanks to its participation in the global torch relay, lasting 78 days and involving almost 4,000 torchbearers
But Hope, for one, feels the torch relay “seems to have lost some of its novelty. I was in Atlanta and London when the torch arrived, and not only did Coke not get attention, the torch got very little. My guess is that torch relay doesn’t have the marketing legs it once did. Samsung, like Coke, seemingly put a lot into the Olympics torch relay, but the event lacked charisma and excitement.”
Moreover, Hope says “it was clear that Coke made a decision to tone down, and did. Having so many spots on the Olympics and not making them relevant to the Olympics seemed a poor decision. Also, it seemed that Coke decided not to use the Olympics as an image in its promotions prior to the Olympics. Clearly, this was a strategic decision, based on a fear that things could go badly at the Olympics. They didn’t and Coke lost an opportunity.”
One of the undisputed winners was Speedo—not a TOP sponsor, but a sponsor of several national swimming and beach volleyball teams—which scored a hit because of its affiliation with Phelps and the U.S. swim team, and a campaign that spotlighted new technical innovations and swimsuit designs. In fact, Speedo placed the value of global PR at $50 million, according to recent published reports.
“How much Speedo did you see during the swimming competitions?” Taylor asks. “Here is a relatively small company that makes the best competitive swimwear using the swimming competitions as its major marketing tool.”
For similar reasons, adidas got plenty of visibility. The company provided uniforms for 17 Olympic federations. “They were very visible all over Athens,” says James.
Taylor says Swatch, the official timekeeper of the Olympics, was another big winner. As official timekeeper, Swatch was able to use its logo on timing devices at Games venues and on results broadcast on television, giving it more unpaid airtime during the Games than any other sponsor. Says Taylor, “The company logo was every where that a timing event was held.”
Swatch also created a special collection of watches celebrating Greek history, culture and the first modern Olympic Games, held in Athens in 1896. Many of the watches are inscribed with Greek letters and words, and some of the bands are formed by a series of symbolic rings. The company even installed Sony PlayStation pods in some stores, encouraging customers to play Athens 2004, the official computer game of the Olympics.
Nobs, meanwhile, was impressed by Visa. “In my view, Visa did the best job of mounting and sustaining an integrated marketing and communications campaign consisting of PR, advertising, events and promotions, and online marketing that began two years out,” he says. The credit card company scored high marks with its ads featuring gold medal winner Michael Phelps swimming across the ocean and volleyball players Misty May and Kerri Walsh playing beach volleyball in the snow before the Olympics began and built on that momentum during the Games as Phelps piled up swimming medals and the two women ruled the beach.
A company that drew applause for taking its sponsorship beyond the conventional advertising and promotion is retail giant Home Depot, which is a major participant in the U.S. Olympic Committee’s Olympic Job Opportunities Program, which pays qualifying athletes full time and benefits for 20 hours of work a week. Home Depot had 71 employees competing in Athens this summer—49 Olympians and 22 Paralympians.
Nobs says Home Depot’s program is “a good example of ‘owning’ a particular aspect of Games,” an approach that allows sponsors to “humanize the sheer enormity of the Olympics, make it more personal, and take it down to a local, grassroots level.”
Bob Hope agrees. “I thought Home Depot did the best job. The positioning that so many Olympians are employees of Home Depot reaches deep within their system and makes them look like good guys, a great company and a company with high quality achievers working in their stores. Also, it seemed they used the imagery well inside their stores. [Chief marketing officer] John Costello is a great marketer and he knows how to use his properties.”
McDonald’s earned some applause for its efforts to link its Olympic sponsorship with its efforts to promote healthy eating and exercise, creating an advertising campaign that featured British sprinter Darren Campbell and former Olympic swimmer Sharron Davies. The campaign’s tagline, “Every step counts,” reinforced the company’s emphasis on simple forms as exercise—walking and climbing stairs—as an antidote to obesity, while the ads featured a new healthy meal option called Go Active! But others saw the company’s efforts as incongruous.
“I think McDonald’s should steer clear of sports,” says one sponsorship expert. “The media are going to raise the obesity issue, and it’s hard to imagine any successful athlete who got where he is because of a diet of Big Macs.”
Another company that gets mixed reviews is Kodak. Says Nobs, “It seemed that Kodak did less than usual to activate its involvement despite its long-term association with the Olympics and the natural ‘capture the moment’ tendency that the Games provide. Other sponsors such as John Hancock, Xerox, and United Airlines, to name a few, didn’t seem to get the bump out of the Games they were probably looking for, despite well-intentioned efforts.”
Meanwhile, Taylor says Panasonic was “least visible among the major sponsors.”
One thing almost everyone agrees on is that ambush marketing—the attempt by non-sponsors to capture some of the luster of the Games—was at an all-time low in 2004.
“Sports sponsorship is big business,” said Richard Hawkins, a lawyer in Bird & Bird’s international sports group. “Companies will pay millions to obtain the benefits of being associated with sports events such as the Olympics. Other companies will try and obtain these benefits for free.”
During the 1998 Soccer World Cup in France, Nike set up a theme park in Paris and persuaded the Brazilian team—considered the best in the world—to launch it, attracting a quarter of a million visitors and providing the Oregon-based company with almost as much brand recognition during the tournament as its main rival adidas, an official sponsor. At the Atlanta Olympics in 1996, meanwhile, Nike handed out banners bearing the sportswear giant’s “Just Do It” slogan outside venues. (Nike spends far more money on individual athletes or teams than it does on event sponsorship.)
But this year, organizers clamped down on anything that might allow TV audiences a glimpse of a non-sponsor’s logo. In addition to buying up every billboard for miles around Athens, tough new guidelines made it difficult to sneak any non-approved product into a venue. People carrying bottles of Pepsi (or any bottled water not made by Coca-Cola) had them confiscated at the gate, and people with a Nike logo on their T-shirt were asked to turn the shirt inside out.
“Anti-ambushing is necessary, but a reality is that this effort may be most valuable just in reducing clutter,” says Hope. “It is so hard for any marketer to cut through clutter and get a clear message across that any value derived from a good ambushing effort is probably minimal. It would be better to spend thought and money in other areas.”