The Ethics of the Ambush

Ambush marketing is a feature of many events. At the 1998 World Cup over two-thirds of British consumers failed to recognise or mis-identified the Official World Cup Sponsors (source: Marketing Week July 1998). Is this savvy marketing or unethical business practice that confuses the consumer?

The strength of a war waged without monetary reserves is as fleeting as a breath. Money is the sinews of battle" Francois Rabelais 1492-1553

At the 1998 World Cup, over 250,000 people visited Nike's "People's Republic of Football", opened by the Brazilian Football Team, and featuring interactive games, merchandise and soccer skills areas. Miniature cars emblazoned with Nike logos and filled with Nike players roamed the streets, stopping and offering free clinics. Advertising hoardings were everywhere. Six competing teams wore Nike strip.

Nike generated a 32% sponsor recognition rate. Adidas, as the Official Sponsor, with rights to the official logo and perimeter boards around the pitch reaching a TV audience of an estimated 40 billion people and nearly 3 million live spectators, achieved only 3% more (source: Sport+ Market study 1998) Over two-thirds of British consumers failed to recognise or mis-identified the Official World Cup Sponsors (source: Marketing Week July 1998) Is this savvy marketing or unethical business practice that confuses the consumer?

Ambush marketing has been defined as "the practice whereby another company, often a competitor, seeks association with the sponsored activity without payment to the activity owner". This company attempts to deflect some of the audience attention away from the sponsor to itself.

Whilst regulations govern what marketers can or can't do, rules do not cover all aspects of the decision making process. Whilst a company is likely to have its own written codes of ethics and unwritten company cultures, a marketer will often have to make decisions based on additional ethical considerations beyond what is legal, or within industry guidelines. Much press debate has centred on misleading advertising and the impact of deceiving consumers, but sports sponsorship differs from advertising in that the message and the medium in which it is carried are inextricably linked.

As awareness of the positive business value of sponsorship increases, demand for attractive sponsorship rights grows, rights holder costs escalate and rights fees increase. Ambush marketing can provide a means of piggybacking on an event without paying exorbitant fees to do so. This activity can take the form of:

Sponsoring the broadcast of the event - although increasingly rights holders build broadcast rights into event sponsorship contracts in an effort to avoid this. Broadcast sponsorship by a non-competitor is of course a perfectly legitimate activity but can result in much higher awareness than for event sponsors who have, through their actions, enabled the event to happen.

Heineken Export were both event and broadcast sponsor of the 1995 Rugby World Cup and achieved an awareness rating of 74% - substantially higher than the next best-placed sponsor in South African Airways who achieved 45% and sponsored the event alone. Most suprising, though, was the achievement of 26% awareness for Sony, who had nothing to do with the event at all. Sony were the broadcast sponsor of the 1991 event, and scored so highly on awareness that they were still thought of four years later, beating a number of official event sponsors in the process. (source: TSMS Connector)

Buying ad-space during event transmission times - whilst the UEFA Champions League is a fine example of broadcast/event sponsorship integration, yet more cost prohibits most sponsors from buying commercial airtime in the broadcast, which is more often than not bought by competitors.

Using event imagery and association to run major promotions around events - for all the efforts of FIFA to trademark the World Cup name and image numerous companies promote their own un-related football rights at this time or use more general football imagery to suggest an event association.

Sponsoring teams or individual athletes - it is usually financially prohibitive and commercially unviable for a sponsor to tie up the rights to the event, the national teams taking part, the players, TV and radio broadcast and internet rights in order to block out competition entirely. Coca-Cola paid a reported $33m to be the Official Sponsor of the 1992 Olympics, only to have their efforts much reduced by Pepsi's endorsement of Magic Johnson who featured heavily in advertising at the time. This was sufficient for the IOC to threaten legal action against Pepsi.

As recognition of sports as brands grows, ambush activity can be thought of reducing the equity and value of that brand. It can be argued that ambush activity reduces the effectiveness of the official sponsors' promotions and reduces the potential revenue stream to, and the viability of the event, if that sponsor then refuses to renew. Increased ambush activity (along with rising costs and clutter) has led, in part, to a number of high-profile sponsor withdrawals, notably IBM and Mars from the Olympic TOP programme.

Equally rights holders incur increasing costs (largely due to pressure from their sponsors) for the policing of rights and protection from ambush - costs which could otherwise be channelled back into the development of the sport or the enhancement of the event.

So is it morally right? The answer to this question depends on who you are asking. Paying millions in rights fees is no security to the sponsor that they will not be ambushed by a competitor, and both rights holders and sponsors regard ambush companies as a major irritation. There is an inherent risk that as sponsors shy away from increasing rights fees and ambush on the battlefield, revenues may decline and the ability of that sport to develop and grow will be seriously impaired.

Ambushers regard their activity as a legitimate reality in a free market, and may equally argue that they have a moral duty to find the most cost-effective and innovative means of delivering value to their shareholders. Failure to aggressively promote sponsorships leaves the door wide open for ambushers to steal the thunder, and there are many sponsors who buy rights, sit back and do nothing. In the words of one former Nike marketer:

"If companies aren't aggressive in promoting their sponsorships, then they should be ambushed. Sponsors should dominate all of the public relations, advertising, promotions. Blitz the town where the event is held, buy up all the billboards. Make sure that everyone knows you are the sponsor. Do this and the ambusher looks like a bit player. If you are sloppy, then maybe an ambush will force you to become a better marketer..."

Sally Hancock
Chief Executive
Redmandarin