Olympic Advertising and Sponsorship Is it Worth The Investment?

Mon, 2016-07-18

Olympic Advertising and Sponsorship Is it Worth The Investment?

By Steve Winter, 

President, Brotman|Winter|Fried, a Sage Communications Company

 

For years, the debate has raged.

Is Olympic advertising worth the investment?

Slotted in right behind the Super Bowl and akin to World Cup Soccer, the Olympic Games have perennially served as both a showcase and a coming out party for companies seeking to gain target market exposure, brand awareness and product sales.  Just as everybody waits to see what Anheuser-Busch or Go Daddy has planned for Super Sunday, so do viewers who tune in across the globe for the quadrennial meeting of the world’s greatest athletes.

But every time around the same question is asked:

“Is it worth it?”

In past years, the answer could well have been a “definite-maybe,” but early last year, new rules went into effect to ensure that only the deepest pocketed of companies – companies that can truly afford to enhance and expand upon the base value of their marketing investment – can afford to play in this arena.

No longer could a company  simply “advertise with the Olympics.”  Instead, it must become an official sponsor, shelling out an estimated $100 million for that right.   Add to that the cost of creative production, cross-promotional marketing and social media engagement, and that number inflates astronomically.  Procter & Gamble, for example, will have spent well over $1 billion for the four-year period leading up to and including the 2016 Rio Games. 

And at the end of the day, the question remains the same:  “Does this exposure effectively sell product?”

The short answer, essentially is “no;” but extrapolated to a grander scale, it’s really not about sales … rather it’s more about branding.

"Olympic sponsorship and advertising is purely equity building,”  says Ron Goodstein, Marketing Professor at Georgetown University's McDonough School of Business.  “Advertisers at this level want their customers to think ‘these are good people; these are good companies;'  but if companies think that sponsorship alone will get customers to purchase a product, they’re off the mark.  Ultimately, the real outcome is image enhancement and brand familiarity.” 

Clearly,  this is a game that can only be played by the “big boys.”  In addition to P&G, globally, 2016 Olympic sponsors include CocaCola, Samsung, McDonald’s, GE, Bridgestone, Panasonic and Visa; which, by virtue of their association, allows these companies to use participating 2016 athletes, the legendary rings and even the word Olympics in their advertising, marketing and social media outreach.  Fortunately, though, there are ways through which others can get into the game.

In late 2015, the International Olympic Committee passed what’s coloqually known as the Rule 40 Athlete Image Policy for the 2016 Games.  Under the terms of this directive,  athletes may now appear in non-official sponsors’ ads and tweets, so long as neither the ads nor social media posts use the Olympic rings or such terms as “Olympics,” “2016,” “Rio,” “Games” or “Gold.”  While the initial thinking might be that the lack of this quintessential Olympic symbolism is a potential setback, a closer look at the facts reveal that the average viewer really has only a limited understanding as to which companies are – in fact – sponsoring the Games. 

According to marketing research company Gallup & Robinson, in 2012, fewer than 10 percent of viewers could actually list the names of the Games’ corporate sponsors.  To illustrate, Nike was the singular brand most closely associated with the 2012 Olympics, even though the Oregon-based athletic shoe giant was not an official sponsor.  Similarly, when Brand Republic surveyed viewers in London about the sponsors for their hometown Games, 16 percent cited Tesco as one.  Oddly enough, it wasn’t.  Canon, Carlsbery, Sky and mobile phone company Orange were also incorrectly reported multiple times as sponsors.  

How did this happen?

In television parlance, it’s called counter-progamming.  In marketing, it’s called smart advertising,

By creating a campaign that tells an Olympic story without actually mentioning the Games, showcasing the imagery or featuring “protected” athletes, and by delivering those messages through vehicles that relate directly to viewers consumption of the Games, such companies can highly effectively communicate their message at a fraction of the cost of official sponsorship.

Clearly, the system works.  A recent article in AdWeek showcased U.S. swimmer Michael Phelps featured in six Instagram posts for Under Armour, a non-official sponsor.  These posts generated more than $278,000 in advertising value.  Companies such as Under Armour have developed creative hashtags, flag emojis to represent their athletes’ home countries and methodologies through which to communicate their messages without using the few restricted Olympic terms.  Let’s face it, who among us doesn’t know that Michael Phelps is an Olympic athlete?  The average viewer would know the ad is Olympics-related whether or not the word “Olympics” is actually used.

With the price of Olympic sponsorship ever on the rise, there is clearly a divide between the “haves” and the “have-nots.”  For the “haves,” they can use the official branding in everything they do, and as long as they throw enough supporting resources at their strategy, they will continue to receive equitable value; but for companies who want the association without the extreme cost, Rule 40 appears to provide a workable solution.

 

 

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