The Olympic Baby

We were a little surprised when we saw the IOC was planning on reforming its Rule 40.

Rule 40 currently imposes commercial purdah on Olympians for nearly a month around the Games, preventing any use of name or likeness in association with non-Games partners. Penalties for contravention include disqualification and stripping of medals (although the reality is closer to a rapped knuckle for the superstar breaches that are the legends of ambush: Johnson, Christie, Phelps)

There’s a popular case for change. Dozens of athletes launched a Twitter campaign – #WeDemandChange2012 – during the London Games, to urge an end to the rule. Rule 40 limits the commercial potential of athletes at the greatest moments in their season or even their careers. Only the very top athletes, sponsored by official Games partners, would make real money in Olympic years.

But a change is still surprising. Not only because the IOC is a conservative beast…but because this reform is potentially … radical.

The premise is to allow pre-existing marketing campaigns based on Olympians to continue, providing they are ‘generic’ ie non Olympic. But as we saw clearly in the controversies about Scotiabank’s 2010 and Honda’s 2012 campaigns, it can be extremely difficult to differentiate between ‘generic’ and Olympic marketing. The strict IP of the IOC and Games are well-protected: the marques and designations. But … mood, colours, words even.: Champion, heroic, pride… The Olympic brand is way too big to be reduced to a few protected terms.

So it’s difficult to see how ambush marketing would not be encouraged by this move. And while simple cease and desist letters are effective in blocking flagrant breaches of Olympic legislation, rights protection teams would struggle to cope with multiple negotiations of the protracted sort required by the more subtle approach of a Honda or Scotiabank.

Although LOCOG successfully restricted the ability of non Partners to use outdoor or field marketing in ambush, Games-time clutter across multiple channels is also a real risk, with the threat of Atlanta-style backlash against excessive commercialism.

But it will be the NOCs around the world who are most likely to suffer, with the dilution of their main asset. Brands will have the option to steer clear of bulky rights packages and head, instead, straight to the athletes.

And the potential is for so many brands to develop ‘non-Olympic’ campaigns that official sponsors will have to reassess the value of official Olympic turf. Or for undesirable or controversial brands to tarnish the halo of the Rings. How much did Bodog offer Tiger? Any ISFs who already accept gambling partners will be hard-pushed to take a stand when the same brands turn to athletes…

The change surely has the potential to shift the entire Olympic sponsorship landscape. Sponsors in the Olympic family will be faced with the need to develop stronger, more differentiated sponsorship propositions. The marketing landscape would be shaken up, there’s no question about that.

An apocalyptic picture. Life rarely pans out exactly as predicted, but here at Redmandarin, we’re left asking ourselves: which is the baby and which is the bathwater?

Red Thread

The Paralympics come of age

The IOC’s signature on the landmark agreement with the IPC in Sydney 2001, linking the hosting of the Paralympic Games and the Olympics, was both hugely generous and characteristically far-sighted.

In exchange for abnegating their sponsorship rights and accepting a flat capped contribution from each Games, the IPC gained the guarantee of association with the world’s most powerful sports brand. Back in 2000, the agreement looked particularly generous. From the perspective of 2012, it looks particularly far-sighted.

In the mind of Xavier Gonzalez, CEO of the IPC, Beijing marked the coming of age of the Paralympian: ‘It was really in Beijing, to my mind, that Paralympians started to be proud to be Paralympians, and didn’t need to say ‘I’m an Olympian’’. And Sochi perhaps marks the coming of age of the IPC as a force for social change: ‘The changes in legislation to make Sochi as accessible as possible will create a template for the rest of Russia. Not that this is unique to Sochi. The Paralympic Games aren’t an end in themselves – they’re the beginning of the opportunity.’

But could London 2012 mark its coming of age commercially?  London 2012, with the obvious good graces of LOCOG, has seen a number of interesting developments.

The separation of broadcasting rights between BBC and C4 gave the Paralympics a broadcast partner who would be determined to keen to tell their story as powerfully as possible. More importantly, it created a commercial platform for the Paralympic Games which was not open to the Olympics in the UK, supporting the recruitment of Paralympic partners.

From a partnership perspective, the London Paralympic Games also offers powerful precedents for successor OCOGs. While Coke’s continued success in blocking the supermarket category cost LOCOG nearly £40 million, it opened a loophole of happiness which other OCOGs will be keen to copy. As Igor Stolyarov, himself an ex-Coker comments ‘London did brilliantly by acquiring Sainsbury’s as a Paralympic sponsor, a very smart move. The Sainsbury’s deal creates a real precedent.’

The agreement between the IOC and the IPC, extended this May until 2020 effectively incentivises the OCOG to be as commercially creative as possible around the Paralympics – as any funds raised for the Paralympics go directly to the OCOG, not the IPC. On this basis, we would expect future OCOGs to be attentive to the nimble contractual footwork of London 2012 – and use the Paralympic Games as a route to dodge Coke’s TOP firepower.

Sainsbury’s clever procurement clearly saved them roughly the same amount, enabling them to invest seriously in their Active Kids programme. Active Kids has been phenomenally successful, gives Sainsbury’s the right to claim to be the dominant brand playing in school sport – having channelled the equivalent of £115 million of sports equipment into schools since 2005. But like any 7 year old affinity programme, it needs constant reinvention to regain front of mind with consumers, and this was one of the strongest drivers for a 2012 partnership back in 2007, when Sainsbury’s was a Redmandarin client.

Sainsbury’s of course aren’t disclosing their activation budget, but with a platform which includes an ambition to introduce one million schoolchildren to Paralympic sport, David Beckham on film, a respectable C4 partnership – and a £10 million commitment to the UK School Games for the next four years, they’re not saving the change – and demonstrating a commitment to community which is both broader and deeper than any other London 2012 partner.

Weighting sponsorship investment towards activation, not rights is a sensible but still unusual position. In this case, Sainsbury’s judged – correctly in our opinion – that most people wouldn’t differentiate between association with the Olympic and Paralympic Games; and if they did, the differentiation would be positive. Sainsbury’s partnership campaign, which surely deserves any sponsorship award it’s entered for, will be a case study for the textbooks.

Curiously, Wolff Olins must also take some credit. The differences between the logos for the Olympic and Paralympic Games are minimal. The colourways obviously diverge, but no more than many Tier 1 Partners who pay for that very privilege. For anyone not versed in Olympic iconography and the ranking implications of a full colour Partner logo – Sainsbury’s is just another sponsor.

Anecdotally, the Paralympics isn’t working so well in London so far as client hospitality is concerned. Although spectators at the Beijing Games were effusive and enthusiastic, there is clearly a lingering perception that the Paralympic Games lack Olympic magic for business clients. Conversely, with respect to employee engagement, engagement with the Paralympics appears to be hugely powerful. In this instance, employee engagement is probably a more reliable indicator of consumer opinion: Sainsbury’s clearly think so.

The IPC’s active role echoes that of the IOC: to oversee the organisation of the Paralympic Games (as well as serving as the International Federation for nine sports). Its symbolic role however is arguably broader than that of the IOC – to represent the rights of athletes with disabilities, and by extension, all people with disabilities. The enormous relevance of the Paralympic metaphor lies of course in the struggle we each share to overcome our limitations. For Allianz, the power of this metaphor, and their ability to integrate it into messaging, more than compensates for having to take a back seat at the Games. In the words of Joseph Gross: ‘I am 100% convinced the IPC has a very positive future. I don’t expect it to be a fast-burner, but each Games, Beijing, London, Sochi, Rio, is going to advance the profile and the impact of the IPC. Managed well, I believe its relevance extends far beyond the disability community. It connects hugely with social values.’

In ‘Working the Olympics’, Xavier likened the IPC to the IOC’s younger brother: ‘You have one son who is already established, and you have the little one who is growing and wants to do things’. We’re led to understand that, with the encouragement of LOCOG, TOP partners will for the first time (unbelievably) maintain their presence throughout the Paralympics. Redmandarin believes the Paralympics are coming of age.

NB We’re assuming Coca-Cola will do some buddying up to the IPC and consider its relationship with the Paralympic Games going forward.

Red Thread

sponsorship zen

It tickles us at Redmandarin that the IOC now has 11 TOP partners.

Brands and rights-holders often perpetuate a false correlation between sponsor numbers and clutter, and talk about sponsor clutter as though it’s an issue – and yet the IOC’s elegant solution is simply zen: de-clutter. Certainly, there is a limit to the number of partners that any property will sustain, but the limit itself depends on a number of factors, of which sponsor numbers is but one. What’s ironic is that a principled decision by the IOC to eschew easy commercialisation now looks like the more effective commercial strategy in the long run. Continue reading

the right rights: The hidden value of Dow’s Olympic partnership

In July, Dow Chemical Co., the world’s second-largest chemical maker, agreed to become a worldwide sponsor of the Olympics through 2020 to gain construction sales in host cities and boost brand awareness in emerging markets.

The deal requires Olympic hosts to give Dow products preference as long as they meet a project’s technical requirements and are price competitive in the region

CEO Andrew Liveris said at an IOC event in New York that Dow’s board approved the sponsorship after Heinz Haller, an executive vice president, pitched it as a $1 billion sales opportunity through to 2020. Earnings before interest, taxes, depreciation and amortization may reach $180 million which makes the average $72-90m rights fee a good investment without even considering the value the sponsorship brings Dow outside of the Host Cities market.

When it comes to Olympic sponsorship, supply rights are often overlooked by the wider world. For b2b sponsors, the Dow/IOC partnership may just prove a well-thumbed case-study.