The Olympics and Sponsorship

The enhancement of brand values is often cited as a major attribute of sponsorship. But what happens when the once glossy image of a rights holder loses it's shine? We look at the Olympics as a prime example of recent times...

It's reassuring to know, that in an industry that occasionally nudges towards an overdose of self-importance a handful of sports marketing professionals exist who approach the day job with a healthy dose of cynicism. For a dose of irony must surely have played a part when the decision was taken by the organisers of the Salt Lake City Olympics to select an appropriate, relevant partner to manage its recruitment and staffing needs. For a Games trying desperately to reposition itself from a corruption-ridden nightmare to an attractive celebration of the best of humanity, you would think that the last brand name the Games would want aligned to its own would be Monster. Dot com, that is.

But whilst on the surface there's a certain ironic tinge to this partnership, it's the first time the Olympics has had a dot com sponsor, and is testament to a company whose competitors' marketers have gone from spending millions on Super Bowl advertising breaks to having ample time to watch daytime television in less than a year. The company is working with the full range of Olympic participants, from the thousands of volunteers that are the backbone of the Games to top-flight athletes whose sporting career will one day come to an end, and who all need career advice and management.

But why would a first-time sponsor align itself with a major sports event whose image, crucial to its commercial success, was arguably tarnished? After all, at a major conference held at the University of Sydney during the 2000 games the Australian Judge Patricia O'Shane noted, in a debate on the moral health of the Olympic movement, that: "The IOC is not living up to the ideals it expects the athletes to embrace. It certainly doesn't hold moral and ethical values at the core of its business." And it would appear that consumers think the same way - a nation-wide poll undertaken by Performance Research shortly after the Salt Lake City scandal broke indicated that 40% believed "Their overall impression of the Olympics has been damaged".

But it seems that in the minds of most consumers there's a distinction between the IOC and the Games and the companies who sponsor them. In the same poll 85% indicated that they "welcome corporate sponsorship if it keeps the Olympics going", and, even more encouraging for sponsors, 30% said that "a company's involvement in the Olympics has a positive impact on my everyday purchasing decisions". Evidence from the Sydney Olympics would suggest the trend continuing since, thanks to a deliberate strategy by the organising committee of not repeating the commercial circus that Atlanta had been, awareness of Olympic sponsors involved in both Games was much higher in Sydney than Atlanta - a leap of 9% to 35% in the case of McDonald's. Less is clearly more - over 200 companies had some form of commercial partnership with Atlanta whilst in Sydney only 100 could lay claim to an official Olympic involvement.

Perhaps, for the first time in Sydney, the right balance was found between the commercial needs of the Games and the aesthetics of the event. Consumer-oriented Olympic sponsors finally woke up to the fact that buying the rights to the rings would not, alone, achieve anything and only by adding value to the occasion in an appropriate and strategic way would they stand the remotest chance of achieving something resembling a payback on their investment.

But what of the future? Whilst those same sports marketing cynics fully expect some of the Olympic facilities to still resemble the Parthenon by the time of the Opening Ceremony, the Athens 2004 Organising Committee has already achieved its national sponsorship target of £145m from 7 categories with a further 33 as yet untendered. One might suspect that to potentially achieve a sponsorship income close to $500m from a nation on the bottom rung of the economic ladder within the European Union, and with a population nudging only 10m, ATHOC has called upon an act of divine intervention on the part of the Greek Orthodox Church. Alpha Bank has, for example, somehow determined that £43m is an acceptable price to pay to become the Official Bank of the Games, the largest amount ever paid by a single national sponsor, three times the minimum amount required by the tender and twice the amount paid for the same category sponsorship in Sydney.

Sponsors have not been slow in coming forwards to support Beijing 2008 either. Not surprising, given the potential scale of the Chinese market, one might say. But what is more surprising is that those sponsors who openly criticised the IOC for its slack ethics in relation to Salt Lake City and who feared for the potential damage such association might have on their brands, clearly think that the opportunity for business in China vastly outweighs the potential downside of an affiliation with an event in a country with an appalling human rights record. Both Amnesty International and Human Rights Watch have criticised Olympic sponsors for their apparent hypocrisy on this matter, and sponsors will have to be very aware of the risk to their brand image should it be proven that China is guilty of further human rights abuses directly linked to the Games.

Perhaps, and at the risk of being over-optimistic, Beijing 2008 can finally provide an opportunity for Olympic sponsors to not only benefit from the commercial exploitation of their involvement with the Games but to also make a tangible and visible difference to the lives of the Chinese population. For example, instead of following the expected path of avoiding any interference in the organisation and running of the event, the time might be right for media, telecoms and communications sponsors to press hard for restrictions on freedom of expression to be lifted before the Games, and for clothing and footwear sponsors to ensure, finally, that fundamental labour rights are adhered to.

Successful sponsors recognise the extraordinary synergy that can result when two major brands come together - in this instance an association with the world's largest sporting event. But this benefit can quickly be usurped when the image of the Olympics is becomes tarnished. With the turnover of the largest corporations exceeding that of the GDP of some countries, perhaps sponsors can become a force for change to leave a lasting, positive legacy for the markets in which the Games are taking place, and for the population who will ultimately, it is hoped, become consumers of their products.

Sally Hancock
Chief Executive
Redmandarin