How much bang for the Olympic buck?

Updated: 2012-07-27 12:14

By Mike Bastin (China Daily)

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How much bang for the Olympic buck?

Chinese firms should make most out of opportunities like the Games for branding

Being one of the official sponsors of the Olympic Games appears at first glance to be the perfect marketing opportunity. The Games are sponsored officially by only 11 multinational companies which pay almost $1 billion (825 million euros) for worldwide marketing rights. This agreement involves rights to sponsorship of both the summer and the winter Games, over a four-year cycle. Seems like an ideal platform to build a corporate brand image. Or is it?

Unlike most other major international sports events, sponsors are prohibited from advertising their brands around the perimeter of Olympic venues. In addition, the official sponsors are not "associated" directly with the Games either when the Games are announced on television nor within the minds of the general public. This is most definitely "The London Olympics" as it was "The Beijing Olympics" in 2008.

Corporate sponsors will argue that their Olympic association has a more subtle effect. They maintain that the Games provide a truly global showcase for their products and services. Sponsorship is also believed to build loyalty among staff who value involvement in Olympics. Not surprisingly, Coca-Cola was one of the early sponsors of the Olympics with uninterrupted sponsorship since the Amsterdam Games of 1928. Furthermore, the beverage giant has already extended its agreement to take it to 2020.

In contrast, the Chinese computing equipment firm Acer is sponsoring this summer's Games for the first time, having already sponsored the 2010 Vancouver Winter Olympics.

Acer's inclusion should now lead the way for more Asian and Chinese companies. The Chinese companies which sponsored the 2008 Beijing Olympics, such as PC maker Lenovo, should learn from Coca-Cola's long-running association.

Procter and Gamble also signed up for a five-Games deal in 2010, the first covering multiple product brands under one corporate brand sponsorship deal. P&G argues that the sheer global reach of the Olympics is an opportunity not to be missed. In particular, P&G has found that the Olympics enables it to reach more potential female consumers. P&G has even gone so far as to quantify the benefit in sales of Olympics sponsorship, claiming that sponsorship of the 2010 Vancouver Winter Olympics was worth an additional $100 million in sales.

Perhaps companies from developing nations can learn most from South Korea's Samsung which has been a sponsor for 15 years and is committed until 2016. The company argues that it is the "excitement" surrounding the Games that provides a boost to all its brands, especially its Galaxy SIII smartphone. In fact, this very passive form of promotion does not offer a possible quantum leap in brand building, for either corporate or product brands. Sponsorship does, however, contribute in the long-term to corporate brand positioning very favorably. More than anything the perception of "trust" and "credibility" results from consistent attachment to the Olympics. Many of China's emerging companies, such as Huawei, Haier and Lenovo, could well benefit from this form of brand building.

Of course, we will see plenty of advertisements at the venues of all Olympic events, placed in what are considered to be camera-catching positions. This form of promotion is far more suitable for individual product brands but will benefit brand awareness far more than brand image due to the fleeting exposure and the viewers' mindset firmly focused on the specific event.

Unlike sponsorship of the overall Games itself, this form of promotion, with repeated exposure during events, could lead to a substantial increase in brand awareness internationally. New product brands will benefit from this promotional activity. Currently China's few international companies rely far too much on corporate branding and, therefore, could consider this an ideal opportunity to introduce a new product brand and instigate an immediate boost in international awareness levels.

Advertising or commercial breaks will also continue to attract huge interest during Olympic coverage and will command far higher fees with a guaranteed audience of around 4 billion watching the Games on TV. Such will be the absorbing nature of Olympic events that many TV viewers' state of mind will not be as passive as usual when watching regular TV programs. Also, TV advertising breaks allow the advertiser to dominate the TV, if only for a minute or so, and potentially engage the viewer emotionally. As a result, this form of brand building during the Olympics offers brand awareness as well as brand image building possibilities.

Brand positioning which includes "excitement", "fun" and "friendship" should "fit" this form of brand advertising. It should be noted that association with the Olympics is not suitable for every product or corporate brand and should only be considered when there is a clear "fit" between desired brand image and the general perception of the Olympics. For example, many prestige brands aim for an image of "exclusivity" yet the Olympics does not carry any such image. Deeply entrenched in the minds of many is the view that the Olympics represent "excitement", "fun", "friendship" and maybe "success".

Finally, companies and their brands also have the choice of sponsoring individual Olympic athletes or certain Olympic teams, before, during and after the Games. Emotional brand positioning, and most brand building strategies now aim for such a position, is most suited to this promotional activity. This is because it is by far the most intimate form of brand promotion and usually requires the Olympic athlete concerned to commit to the endorsement of one brand only, or at least agree not to endorse any of the brand's competitors.

Not that this is a particularly new form of brand promotion. It was as long ago as 1934 that five-times swimming gold medalist and later Tarzan actor Johnny Weissmuller became the first Olympian to endorse Coca-Cola.

The most powerful brands form an intimate friendship with their consumers where the brand takes on an image similar to that of a human personality. Brand association with a specific Olympian is, therefore, an immensely attractive proposition.

Clearly, the trick here is to spot a potential Olympic medalist early and sign him or her up, long term. Nike signed Michael Jordan long before he became a dominant basketball superstar, for example.

China's economic emancipation has also been matched by its emergence as a leading nation in most athletics events. This will continue and, therefore, brand managers around the world should be scrutinizing the current Chinese Olympic team for possible sponsorship opportunities. Up and coming Chinese athletes should also be considered. What better way to penetrate the Asian and Chinese markets?

Sponsorships of individual Olympic athletes who have not won a medal previously are not expensive. Olympic team sponsorship choice is even more cost effective and it is amazing that more brands have not signed up teams over the years. An excellent example is the Association Argentina de Fomento Equino which will promote equestrian champions from Argentina at the London Games and the 2013 World Olympic Congress in Buenos Aires.

Acceptance as an Olympic sponsor, however, is not always easy and often requires good social skills in getting to know the athletes' parents or team business managers. Furthermore, many sophisticated, long-term athletic program sponsors such as Rolex and Omega have exclusivity agreements that require retailers which sell competing lines to get their approval first. In the true Olympic spirit, they usually say yes.

First and foremost, any Olympic brand association has to be considered carefully with clear "fit" between brand position and Olympic image. Ideally, finances permitting, Olympic association should include a variety of sponsorship and advertising activities and not rely solely on one.

The London Olympics could provide plenty of brand building bang for your buck but one swallow does not make a summer!

The author is a researcher at Nottingham University's School of Contemporary Chinese Studies. The views do not necessarily reflect those of China Daily.

(China Daily 07/27/2012 page10)