Why Olympics might be a bad deal for sponsors; Lessons for World Cup?

Via the Twitter community, I came across a recent article by Kim Skildum Reid published in the blogs section of Harvard Business Publishing.  The article was titled “Why Olympic Sponsorships Aren’t Effective.”  Kim is a Sydney-based corporate sponsorship strategist, co-author of industry bestsellers, The Sponsorship Seeker’s Toolkit and The Sponsor’s Toolkit, and author of The Ambush Marketing Toolkit.

Headshot_for_book_biggerWhile the author focuses on the Olympics, I believe that the points she makes also apply to the FIFA World Cup, and not only because both events share some of the same mega sponsors (e.g. McDonald’s, Coca-Cola, etc.).  Ms. Reid focuses on the topic of ambush marketing, loosely defined as a company/organization conducting marketing activities to benefit from the spotlight of an event of which they are not the official sponsor.  She writes about sponsors, protecting their “rights” as official sponsors, due to the hefty fees they have shelled out, to fight off the efforts of ambush marketers.  As the author points out, a group of 9 official sponsors are expected to pay more than $1 billion dollars for the rights to sponsor the Rio games.  That’s no small sum.

FIFA and the official World Cup sponsors have been equally effusive about their distaste for ambush marketing.  I agree that sponsors should reserve the right to protect their intellectual property (logos, name, etc.) and if their sponsorship extends to keeping competitor brands/products away from the event, then they have the right to do that as well.  But while sponsors/brands spend their legal might and time to fight off potential ambush marketers and small scale entrepreneurs, they might be taking their eyes off the ball.  When consumers and fans hear more stories of FIFA or one of the huge-multinational corporations like this one where FIFA sued a small entrepreneur or forced a tavern owner to shut their doors, they will be outraged and may likely vote with their dollars and feet to NOT support a company.  And we know now, via tweets, texts, e-mails, etc. word travels fast.

I think the author makes a great point at the end of her article.  It’s not about defending or NOT defending a sponsor’s right to protect their “purchase” but about how a sponsor should engage with the audience they are hoping to influence via their sponsorship.  In this age of interactivity and the expectation of consumers to be courted by brands, it’s no longer enough to have the company name plastered alongside the pitch.  Sponsors/brands need to develop relationships with their consumers.

As the author writes:

“Sponsors need to be able to jump into the crowds, nurture fan-generated content, and engage outside the bounds of the Olympics themselves, where so much of the real action is. And like it or not, to do that, the Olympics needs to be prepared to provide sponsor benefits, including IP, that they will lose control of out there in the wild ether of the Olympic experience.”

So sponsors, I hope you’re listening.  A relationship/bond will not be formed with a consumer just by ensuring they see your company’s name more than a competitors.

While traditional tactics will certainly guarantee a great # of impressions (# of eyeballs that see your name/logo) they don’t guarantee conversions or changes in consumer behavior.  Taking the effort to “jump into the crowds” will show consumers that you care, and consumers will be more likely to take the “jump” with you.

With this in mind, CSR initiatives could be a good way for a brand/company to “jump into the crowd” and really show consumers that you care about them and their community.  Do some good in the community/country that aligns with your brand purpose, and your ROI may be better than the huge dollars spent on traditional sponsorship activities (name/logos on billboards, programs, etc.).

Something to think about.

A link to the original post can be found here: http://blogs.harvardbusiness.org/cs/2009/10/olympic_sponsorships.html

And you can follow Kim Skildum-Reid on Twitter @KimSkildumReid

And the Harvard Business Review at @HarvardBiz

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2 Responses

  1. John,

    The press in South Africa has alreaady carried stories of small companies that have been taken to court in the lead up to WC2010.

    Recently a confectioner was foced to withdraw a loppy pop that had a football design on its wrapper.

    In another case informal venders that offer food to constructioon workers at the Soccer City stadium site were removed.

    Its not just football. I heard that a certain soft drink producer offered their product to the ICC Champions Trophy event that there were sponsoring. The problem was that the price at which they sold the product was greater than the shop price locally for the same product! Is there sense in that?

  2. John,

    I couldn’t agree more with your point as well as Kim’s. Having worked for an IOC and FIFA top sponsor, I can confirm that the IOC and FIFA are extremely difficult to work with, lack any sense of creativity, and are too heavy handed in its dealings with both sponsors and non-sponsors. They have more lawyers than marketers: a bad sign for any organization other than a law firm.

    Instead of helping their sponsors maximize their sponsorship with creative and engaging ways to deliver messages and customer experience, they handcuff the sponsors and go after the ambushers with a sledgehammer. Yet, they are completely powerless in preventing a smart ambusher from delivering their message.

    With the ease of consumer generated contents to spread around the world, it is time for FIFA and IOC to wake up to the fact that they need to partner more closely with the sponsors so that the brands can get a better return on their spending.

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