15 Oct The challenges facing Partners of Tokyo 2020
Organising Committees famously misrepresent the value of Games Partnership. ‘The country needs you to step up.’ ‘It’s a once in a lifetime opportunity.’ ‘The Prime Minister needs your help on this one.’ And the favourite: ‘It will be so good for your business.’
In London, LOCOG employed McKinsey to develop an elegantly simple model to show how modest uplift (not forgetting ‘halo effect’ and ‘legacy uplift’), applied across sales, employee productivity, absenteeism, and even reductions in resignation could easily recoup the Partnership investment. Beautifully seductive, but far from reality.
The truth is that these dials can indeed be moved – and dramatically, but, like shares, the value of Partnership can go up or down. Between 2008 and 2012 we analysed over 30 Partnership campaigns from the Sydney, Beijing and London Games. We interviewed key stakeholders, we reviewed online descriptions, we looked at the numbers. Generally, the passing of time meant that interviewees spoke more candidly about their actual experiences. What was most striking was how some businesses – such as GE, Samsung, Visa, AMP, VW China, EDF (to some extent) – were able to drive real strategic value out of their Partnership, whilst many others – including Cadbury’s, BMW and BT for example in London, struggled to generate sustainable uplift.
The challenge for Partners is that they’re starting from scratch on a journey without parallel or precedent. The power relationship with the Organising Committee is a shock. The landscape of sport is alien. Procurement departments – if they’re even allowed close to the Partnership Agreement – cannot begin to rationalise a rights fee which delivers just one hard asset – a logo. It’s a sponsorship – but it feels more like a merger. The intrinsic challenge of sponsoring the Olympic Games is one of the greatest facing any marketeer – because the impacts of Partnership far exceed the domain and influence of marketing. So every Games Partnership represents an unprecedented organisational challenge, especially for first time Partners.
In the words of Erica Kerner, formerly Global Olympics Games Director for Adidas ‘A lot of first-time Partners spend the first years of Partnership just figuring out the sponsorship. And of course, the Organising Committee has never done it either’. She meant it, of course, literally.
This situation is perennial. But Tokyo 2020 has its own unique set of challenges.
Famously, there’s little distinction between the rights of Tier 1 and Tier 2 Partners: both traditionally secure the full right to run consumer-facing promotions. And with a total of 42 Tier 1 and Tier 2 Partners to date, Tokyo has precisely three times the number of London. In effect, that means three times as many brands competing for attention – not just in consumer-facing activity, but also in more targeted business communications. This is a very real issue because brand equity gains (in particular) require a solid foundation of Partnership awareness. Not only will the presence of so many Partners aggravate that particular challenge, it’s almost certain to increase misattribution.
The answer is clearly not just advertising. BP was the largest spender on media, spending £14.2m to communicate their Partnership to consumers: by 2012, it had achieved just 25% awareness (Hall & Partners, 2012).
The presence of so many Partners presents another dilution of practical value: with three times as many Partners, ticket allocations for Partners of Tokyo 2020 will be proportionally smaller. Ticket numbers sound a mundane issue, but a Partner’s ability to guarantee a ticket to Tokyo 2020 to their oldest, or closest, or most profitable, or largest, or prospective clients is one of the largest direct benefits they receive. Tier 1 Partners at London were on average taking over 10,000 guests to both Games. Tokyo Partners will face some very tough decisions about their invite lists.
Category sharing is another issue which directly affects ten Partners in banking, aviation, security (and, to a lesser extent power supply and toilets). Now category exclusivity is customary in sponsorship for very good reason: it guarantees sponsors competition-free access to a target audience. But for the Olympics, lack of exclusivity is far worse, because a large part of the communications value is based on the notion that the Partner makes a unique and practical contribution to the delivery of the Games. This feeds into showcasing, into credentials, into client conversations, into employee engagement. This facet of Partnership is almost unique to the Games (shared only with ‘Expo’) – and completely impossible to maintain when your competitor is providing exactly the same contribution.
For a Partner, choice of Category is highly significant for two reasons. Firstly, because it creates a supply right: Partnership Agreements commit the OCOG and incentivise Partners to purchase the Category products and services from within the Partner network. Aggreko reputedly paid £5m for a Tier 3 position at London 2012: and billed LOCOG £15m. Secondly, because it broadly determines the product communications platform for the Partner. Ideally, the Category carries the flag for the entire business. Hence Atos use their role as IT Integrator to promote their ability to deliver the most challenging systems and Deloitte used their role at London 2012 to communicate their ability to handle complex programme management.
But many Partners of Tokyo 2020, in their desire to become a Partner and to support Tokyo 2020, and Japan, have bought Categories which have relatively little value, commercially or communication..ally. A quick look at the list of 2020 Categories reveals a number of Partners who will struggle to tell a story which helps their broader business. The narrow segmentation of IT across six Partners hurts all six.
The impact of all of this is aggravated by Japan’s corporate communications model.
Japanese businesses take a very integrated approach to brand – by which I mean that its primary drivers are seen as business reputation and product quality. (From my culturally bigoted position, reminiscent of the dominant B2B approach of 30 years ago.) There are intrinsic conservatism and formality about Japanese corporate communications. If the general direction in the west is for business communication to move toward the norms of peer to peer, Japan remains, by contrast, very ‘corporate’, with a marked resistance to stepping outside of the established protocols of business behaviour. The concept of brand in the west is generally closer to that of individual identity, with a clearly defined personality and attributes; and a recognition that corporate behaviour and communication needs to be a reflection of that identity.
The upshot is that many Japanese Partners of Tokyo 2020 will find the need to transcend the limitations of their Category culturally challenging. The best way for Partners to improve their corporate reputation is the thing they are most nervous about doing – standing out.
Looking back to 2012, each Partner looked for a unique way to express its identity or its message – for Lloyds Bank, it was taking the spirit of the Games around the UK, for BT, it was bringing the public together in celebration, for McDonald’s, it was supporting and celebrating the unsung heroes who make the Games such a success. Western brand methodology was applied to each distinct positioning to generate and shape each individual campaign – all in the service of achieving cut-through and superior levels of recognition and appreciation of the role played by the Partner.
It’s almost a platitude of Olympic marketing that the value of Partnership doesn’t derive from the six weeks of the Games (Olympic and Paralympic) but from the years before. What that means in practice is that Partners need to develop a campaign which leverages the Games association to increase relevance, and generates repeated touchpoints with key business audiences. But Tokyo 2020 Partners will find this particularly hard without unique, ownable stories. Their default cultural preference will be to adopt the position of ‘proud supporter’ of Tokyo 2020. This generic sponsor positioning no longer works outside of Japan. There is little to suggest it will work within Japan either.
It truly will be an exceptional Games and Partners are applying themselves wholeheartedly to the delivery challenge. I’m confident that Japan will demonstrate levels of innovation during Tokyo 2020 that surpass any Games, anywhere. The challenge I would like to see Partners embrace would be the challenge of communicating effectively outside of Japan.
The challenges facing Partners
SEDUCTIVE ROI MODELLING SUGGESTS SUCCESS IS GUARANTEED
- Modelling suggests that incremental improvements across sales, brand, employee engagement can easily pay the cost of Partnership investment.
- This is misleading because even marginal incremental gains do not happen easily. There is no simple positive correlation between Olympic Partnership and commercial value.
THEY HAVE LESS TIME THAN THEY BELIEVE
- It is a common mistake of first-time Partners to waste two to three years of Partnership because, fundamentally, they believe there is no hurry.
- The value of Olympic Partnership cannot be generated during the Games but requires four or five years of planned activity before the Games. Without timely planning, many will fail to recoup their investment.
- Helen Nugent, Westpac Senior Exec, and later Macquarie Group Board member described Sydney 2000 as ‘the hardest challenge of her career’. Games Partnership cannot be ‘managed’ by a lower executive team.
- Partnership cuts across every aspect of corporate life and requires active leadership with Senior Exec authority.
THEY HAVE TO CREATE A FIVE-YEAR PROGRAMME OUT OF NOTHING
- The marketing assets of Tokyo 2020 Partnership are largely limited to a logo, a designation and tickets. From that, Partners need to create an integrated, five-year campaign which touches every part of their business. Many Games Partners have unrealistic expectations of Organising Committee support and fail to take early responsibility for the success of their investment.
IT IS DIFFICULT TO STAND OUT
- Tokyo 2020 has more Gold and Official Partners than any other Olympic Games, ever, many, with non-exclusive or very narrow Categories.
- This means that achieving salience and cut-through for Tokyo 2020 Partners will be extremely hard; and harder with time.
Image credit: Night View with Tokyo Tower Special Lightup by t-mizo (CC BY 2.0)