The Olympics Who’ll win sponsors’ gold?

Twenty years ago, the Olympics was plagued by politics and boycotts. Now, as Stephen Armstrong writes, it is one of the global marketing extravaganzas

Twenty years ago, the Olympics was plagued by politics and boycotts.

Now, as Stephen Armstrong writes, it is one of the global marketing

extravaganzas



The Olympic Games is the world’s largest sporting event, bar none. Some

197 countries are taking part this year, and 200 countries will televise

it. A massive 85 per cent of the world’s TV-owning population will watch

some of it. The event has come a long way since the village sports day

at Chipping Camden in Gloucestershire, known as the Olympick Games,

which inspired the games’ creator, the Baron Pierre de Coubertin.



The good Baron was so moved by both the Gloucestershire event and

historical accounts of the original games in Greece - where muscular

young men wrestled naked in a stadium from which women were barred -

that he founded Olympism and organised the first modern games in Athens

in 1896.



It was a humble affair. A total of 211 competitors from 14 countries

took part. The event was held in a stadium sponsored by an Alexandrian

businessman, ticket touts profited from the block purchase of seats,

competitors were banned for not achieving amateur status and the

Americans displayed rowdy nationalism when the winners’ flags were

raised. Boycotts, walk-outs and the like are so much a part of the

games’ history that this year is the first time every National Olympic

Committee has agreed to attend.



Now, with the boycotts a thing of the past, the games just drip with

superlatives and make the World Cup seem like the Hackney Marshes Sunday

Pub League.



The International Olympic Committee’s host broadcaster, NBC, is

producing 3,000 hours of coverage, to be shipped out to TV stations

around the world. By comparison, the 1994 World Cup generated only 100

hours of coverage.



Some 15,000 athletes are expected to gather in Atlanta, while the World

Cup musters fewer than 800 players from the 32 squads. The global

television rights for the 1996 Olympics changed hands for dollars 900

million and marketing programmes have raised dollars 800 million. It is

its sheer size and global reach that have made the Olympics a target for

a group of well-funded companies out to make a name for themselves -

multinational advertisers.



Sponsors will supply 32 per cent of this year’s revenue, which is put at

dollars 1.7 billion. But the lion’s share of the games’ funding actually

comes from the television rights, which makes up 34 per cent of the

total. The TV rights only achieve this value, however, because of the

vast spend sponsors and other advertisers put behind their Olympic TV

ads to support the original deal.



In 1972, the US broadcaster, ABC, paid dollars 7.5 million for the TV

rights. In 1976 the price shot up to dollars 25 million because

advertisers crowded into the surrounding airtime in 1972, making the

event incredibly valuable. This was, in part, due to a ghastly irony.

The 1972 Olympics were bombed by the Arab Black September gang, killing

11 members of the Israeli team. Suddenly, the games was headline news,

on the hour, every hour, across the US - massively increasing its

profile.



Sponsors reacted accordingly. In the 70s, hundreds of companies jostled

for position. By 1986, the IOC had decided enough was enough and put the

TOP Sponsors programme into place.



Michael Payne, marketing director of the IOC, says it was to preserve

the games’ reputation and secure its financial future: ‘In the early

80s, the Olympics had financial problems which it needed to sort out.

Marketing was not new to the games, but it had not been organised or

structured. By creating a proper structure, we were able to secure long-

term global alliances, rather than the mishmash of local companies who

were all reinventing the wheel.’



TOP is effectively ten companies that support the Olympics on a global

basis: Coca-Cola, Kodak, Visa International, Bausch and Lomb, Rank

Xerox, Sports Illustrated, Panasonic, IBM, John Hancock Life Insurance

and UPS. They pay dollars 40 to dollars 50 million per games, and supply

equipment and services. Many of them have been involved with the event

since way before the TOP programme was introduced. Coca-Cola has been

involved since 1928, Rank Xerox since 1960, while Kodak was at the first

games in Athens in 1896 - so it looks as though it gets value for

money.



There are also local partners in the host country and team sponsors in

most participating nations. In some cases, local sponsors pay more than

the TOP sponsors, according to Payne. Some one-off sponsors of the

Atlanta games are paying up to dollars 100 million. This is, in part,

because of the long-term association TOP sponsors have, but also because

TOP sponsors can pay in kind through offering their services. UPS, for

example, is helping the IOC with its global deliveries.



At the same time that the IOC set up the TOP programme, it began to take

its marketing function in-house. The IOC used to employ ISL to carry out

all of its marketing and it played an important role in building the TOP

programme. However, seven years ago the IOC took its TV dealing in-house

and saved billions of dollars in the process. As the dialogue between

TOP sponsors and the IOC became closer, ISL’s function was reduced,

until eventually the IOC co-ordinated all of its marketing internally.



‘‘ISL supplies research through its subsidiaries,’ Payne says. ‘We are

setting up an in-house agency that will employ 22 people, and they will

be responsible for almost everything, from dealing with sponsors to co

ordinating our global ad campaign, which features all members of the TOP

programme.’



All members are expected to sign up for the Sydney games in 2000, and

most have already done so.



The Olympic rings are the world’s best-known symbol, according to

research by the ISL subsidiary, Sponsorship Research International. So

the chance to use that symbol is clearly worth paying through the nose

for. Indeed, James Robinson, retired president of American Express, said

his biggest business mistake was ditching the Amex card’s sponsorship

deal with the Oly-mpics in 1984.



But, having secured the right to use the Olympic symbol, what should

sponsors do with it? For those advertisers that do get involved with the

games, things are a little more complicated than with smaller sporting

events. For one thing, there is no advertising in the Olympic stadium.

Also, athletes are not allowed to bear the logo of any sponsor. Further

complications include the lack of commercial broadcasters carrying the

event across much of Europe because the rights are owned by the largely

public service European Broadcasters Union. The Olympics offers sponsors

the greatest potential reach, coupled, it seems, with the biggest

logistical nightmare.



According to Adrian New, senior vice-president of marketing services at

one sponsor, Visa International, this is less of a problem than it at

first appears. ‘We have sponsored a number of events which allow

banners, including the Rugby World Cup and the World Athletics

Championships,’ he says. ‘We have conducted research after these and

found that few people remember the banners themselves. With a

sponsorship like that, it is the rest of the work that you do around the

sponsorship that gives the real recall. You have to spend about as much

as the sponsorship originally costs again with most of these deals. In

fact, the Olympics is probably more powerful than other events because

it lacks the commercial clutter most sports have these days.’



The federal nature of Visa removes much of the marketing responsibility

from the likes of people such as New. Essentially a club for banks, Visa

itself will not be doing any marketing in Europe. Those member banks

that plan to use the Olympics for advertising or promotions do so at

their own cost.



In the UK, Barclaycard has expanded the Visa/Olympic tie-up by

sponsoring both the British Olympic Association and the British

Paralympic Association teams. Barclaycard is running a pounds 400,000

poster campaign around this sponsorship and raising pounds 500,000

through donations when cardholders use the service in the 100 days

leading up to the games.



The posters feature athletes such as Steve Redgrave, Colin Jackson and

Tanni Grey and run in two bursts. The first burst began at the start of

the 100-day build-up, the other in the two weeks leading up to the

opening of the games. The company would have liked to have run some

extra ads in June but had trouble booking poster sites during the Euro

96 tournament.



Barclaycard’s sponsorship manager, Nic Gault, isn’t worried about sports

fatigue among the British public: ‘We have run a series of promotions

with the Daily Mail and Virgin 1215 and we have received record

responses,’ Gault explains. ‘The Daily Mail pulled in 35,000 replies,

while our direct mail promotion to cardholders took 150,000. We have

also run Euro 96 promotions and received a huge response from them, so I

would say that the British public can’t get enough sport this summer.’



However, the sports glut has affected Coca-Cola. Its advertising and

marketing budget for this year is thought to be dollars 3.8 billion, of

which one quarter is being spent on the Olympics. The games will be seen

in 200 countries - Coke is sold in 197 nations and is running Olympic-

based marketing programmes in 135 of these. As Sergio Zyman, senior

vice-president and chief marketing officer of Coca-Cola, explains that

the company launched its Euro 96 sponsorship because just getting

involved with the Olympics would not have been enough in Europe. The

unfortunate timing of the two events and the lack of commercial

broadcasting for the games meant that Coca-Cola’s message would have

been lost in Europe compared with the huge presence it will have in the

US.



Coca-Cola is therefore sponsoring Euro 96, Wimbledon and the Newquay

Surf Festival for Coke, Diet Coke and Cherry Coke, respectively, in

addition to its Olympic commitment. Given that Coca-Cola’s previous

record summer marketing spend was pounds 10 million in 1995 and the

company’s Euro 96 support marketing cost pounds 14 million, the company

is making a stupendous investment this summer.



Coca-Cola will be supporting the Olympics with TV, press, poster and

radio work, all of which will follow the ‘for the fans’ theme of its

summer sports commercials. There will also be on-bottle promotions and a

deal with Capital Radio where Coca-Cola will fly reporters out to cover

the Olympics in a tie-up with Radio City, based in Atlanta.



In the UK, one problem for Coca-Cola, like most advertisers, is the

absence of ads on the official Olympics TV station - the BBC. The IOC

insists on selling the games to broadcasters that plan to show every

hour of the event to as much of the population as possible. It has

turned down multi-million dollar bids from cable and satellite

broadcasters because they can only reach a limited section of the

population. In the UK, ever increasing competition and a drive for

larger audiences forced the ITV Network to pull out of a deal to

televise the games with the BBC. The last commercial broadcast of the

Olympics in the UK was in 1988 when Channel 4 and ITV shared the

programming.



‘The problem for ITV was that the IOC insists that broadcasters show the

nitty-gritty stuff like synchronised swimming and small-bore shooting,

as well as the big-name events,’ Ian Lewis, head of programme evaluation

at Zenith Media, comments. ‘UK audiences only really switch on for the

track and field events, a bit of the gymnastics and some swimming. Most

of the rest passes us by.’



There may be as many as 45 different advertisers considering an

Olympics-related campaign, although ITV doesn’t expect to be

overwhelmed. ‘I don’t think event-related ads work so well when the

event in question is on the BBC,’ Steve Platt, sales director of Carlton

UK Sales, points out. ‘We don’t think too many advertisers will be

running special Olympics work, with the exception of the sponsors and a

few tactical pieces if a British contestant does well.’



Those advertisers that are planning campaigns during the games are

awaiting the schedule of events so that they can plan spots. The BBC is

yet to receive this, and the IOC and the British Olympic Association are

not making it available. Even without this crucial information, few

buyers believe the games will seriously upset the summer advertising

schedule.



‘The audience really depends on the schedule and the host country,’

Lewis says. ‘In the case of the Barcelona Olympics, the events went out

mainly in the afternoon or early peak, which hit ITV’s daytime audience.

In Atlanta, most of the events will be going out after 6pm, which could

pose a problem for ITV. Having said that, the majority of the track and

field events will be scheduled for peak-time in the US because NBC will

have quite a say in the timetable. That’ll be between 2am and 4am in the

morning over here and that could play into commercial broadcasters’

hands. If the BBC is putting out the pentathlon in peak, ITV and Channel

4 can expect a marginal increase in audience.’



Most buyers expect total TV viewing to increase during the Olympics, and

that ITV and Channel 4 will do reasonably well during what the public

regards as dull events. A good performance by a British athlete in any

event, or a UK peak-time scheduling for a track, field or gymnastics

event, could hit commercial TV hard.



To get around this, many advertisers are buying a good weight of their

TV spend before the start. IBM is spending dollars 3.5 million in the UK

on Olympics-related advertising across posters, press and TV. The bulk

of its media spend is on TV and most of that will run on ITV and Channel

4 in the two weeks before the Olympics begin. The global creative work

originates from New York and features the spoof rock band, Spinal Tap,

which is shown to appear impressed with IBM’s ability to organise

events.



Very little IBM advertising will be visible during the games itself. ‘We

needed to get around the fact that the BBC has the games,’ Steve Barton,

group business director of Ogilvy and Mather, which handles the IBM

account, says.



‘Our poster work comes down in the first week of the games and we will

run the odd spot during the event, but most of our money will be spent

by then. We will be buying press - using our standard ABC1 target

audience - throughout the games, but on a global basis it is the

activity at the games itself that will impress our customers. IBM is

supplying four mainframes, 7,000 PCs, 80 AS400 servers and 250 LANs. As

a sponsor, we will be taking 3,000 people out to Atlanta to see how well

our systems can work.’



Coca-Cola, meanwhile, will be running ads throughout the games.



Louise Terry, Coca-Cola’s Olympics spokeswoman, comments: ‘I know the

arguments about sport fatigue, which says we are involved in too much

sport. At the moment, however, there is so much interest, and it is

steadily increasing. England’s Euro 96 performance and strong

performances by Britons at Wimbledon can only build interest in the

Olympics. We think it’s going to be a great summer.’



What sports sponsors get for their money



Coca-Cola, McDonald’s, General Motors/Vauxhall



The 11 Euro 96 event sponsors paid pounds 3.5 million each and were

allowed perimeter ads, tickets for promotional use, exclusive use of the

trademark logo, the right to place ads in matchday programmes, a

presence in the pounds 2.5 million TV campaign through Collett Dickenson

Pearce and exclusivity in their product category. Coca-Cola is a TOP

sponsor of the Olympics and gets thousands of sites, machines in all

local Olympic associations, machines at the games, the right to use the

Olympic rings, a presence in the global cam-paign by the International

Olympic Committee and coverage by its ambush protection programme.

McDonald’s is a centennial partner, with a reduced commitment at the

local rather than global level. General Motors is a local sponsor, which

gives it far fewer rights.



Services from sponsors



Bausch and Lomb (since 1989)



Supplies optical products and dental care. There is an eye-testing

centre in the Olympic Village



Visa International (since 1988)



Member banks have issued 10 million Olympics-themed cards



IBM (since 1993)



IBM will supply huge numbers of state- of-the-art computers, which will

be on show to business customers



Panasonic (since 1987)



Supplies closed-circuit TVs, big screens and video walls



Coca-Cola (since 1928)



Supplies vending machines and pays for the ‘torch relay’ across

thousands of towns in the US



Kodak (since 1896)



Supplies a photographic laboratory and free film for both private and

press photographers



Rank Xerox (since 1985)



Supplies 2,000 copying machines and pays for a pre-games federation

of athletes



UPS (first time)



To deliver tickets, documents etc. Signed a deal with Coca-Cola as a

result of joint sponsorship



Sports Illustrated (since 1924)



Gets near to the athletes and manages a lot of exclusives, which help to

promote the games



Ambush protection programme for sponsors



The International Olympic Committee has had to become sensitive to

ambush marketing. It has set up a sponsors protection unit, staffed by

30 legal and marketing executives. If an ambush is launched, it will

assess - within 48 hours - what damage has been done in terms of money

lost and the effect on consumers and confront the offending company.

Its attack will be three-pronged: first a polite request to stop, then a

campaign publicising the offence, then legal action. At the last games,

American Express showed a stadium in its ads that was similar to the one

at the games, while some burger chains referred to an ‘Olympic-sized

appetite’ to ambush McDonald’s. But the sponsors haven’t always been

well behaved. After the marathon in 1992, Mars sent people dressed as

M&Ms and Mars bars on to the track in breach of the sponsor’s agreement.



Tie-ins



Centennial Olympic Games partners



All companies have exclusive marketing rights in their product category

and provide services.



AT&T, Budweiser, Champion (Sara Lee), Delta Air Lines, Home Depot, IBM,

McDonald’s, Motorola, Nations Bank and Swatch



Sponsors of the British Olympic team



Adidas, AT&T, Barclaycard, Bausch and Lomb, British Sugar, Burger King,

Cadbury, Coca-Cola, Delta Air Lines, Golden Wonder, IBM, Kellogg’s,

Kodak, Midland Bank, Motorola, Panasonic, Rank Xerox, Royal Mail,

Sanatogen, Sportsworld Travel, Stylo Matchmakers Inter-national, Swatch,

Time International, Uncle Ben’s, Visa International



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Worldwide TV viewing since 1988

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                 TV audience      TV audience share    No. countries

                 (worldwide)      (UK BBC1and BBC2)       viewing

1988 Seoul        10.4 bn           43.5 per cent           160

1992 Barcelona    16.6 bn           45.3 per cent           193

1996 Atlanta      20.0 bn (est.)    45.0 per cent (est.)    220-plus

Source: International Olympic Committee/Zenith Media

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