Close-Up: Live issue - Counting the commercial value of the games

As the countdown to the London Olympic Games looms, Lucy Aitken looks at how the commercial partnerships will work.

As soon as this year's Olympics in Beijing comes to a close on 24 August, the world's eyes will swivel from the East to the West, as London takes the baton for the 2012 Games.

An official handover ceremony will see Beijing's mayor pass the Olympic flag to London's newly elected mayor. This will be mirrored on the same day in London with a ceremony in the capital.

This will be followed by a Cultural Olympiad, which incorporates schools programmes and 2012's involvement with the arts.

The London Organising Committee of the Olympic and Paralympic Games (LOCOG) sees this as the official kick-off for its four-year campaign to usher in the games, and has hired Chime Communications on a one-year contract to promote these first two events.

However, in 2009 it will hold another pitch to find a different partner to help it maximise further commercial opportunities as the event draws nearer.

The LOCOG commercial director, Chris Townsend, is refusing to shed any light on the commercial ideas. However, some direction on commercial strategies are starting to come to the fore.

VCCP, Chime's lead agency, will be prioritising youth and digital in its promotional campaign - a strategy that LOCOG believes will move beyond the agency's year-long grip on the account.

Amelia Torode, the head of digital strategy at VCCP, says: "It has to be a digital-led communications strategy because if you target 14- to 18-year-olds, you automatically get their friends involved. That then ripples to parents and even to grandparents."

Local media will be important because LOCOG doesn't want the regions to be overlooked. Last week, Lord Coe, the LOCOG chairman, addressed advertisers, agencies and publishers at The Newspaper Society's Local Matters conference, saying: "A genuinely local focus is crucial. While London will be the principal venue, it is the entire UK which will play host to the Games."

Commercial partners will also have a role to play with LOCOG eschewing the traditional sponsorship model of chucking a badge in a sign, which some critics suggest represents little value. Instead, they will work with partner companies to ensure that the games touch every part of their business.

Townsend says: "A tier one partner doesn't just badge the Olympics; they integrate it into all elements of their operation and measure their ROI across their entire business." This can encompass anything from using the Olympics to help staff motivation and retention to improving on carbon-reduction targets.

Sustainability is going to play a key role. Sponsors need to meet sustainability criteria before they can officially sponsor the games and two of the top tier official partners - EDF and BT - have already signed up to the "Sustainability Club", a pledge to put environmental concerns at the core of their marketing programmes.

EDF is investigating how it can help the carbon reduction of the flame of the Olympic torch. This will result in a less orange flame and more green flame, but one which nonetheless burns brightly.

TWO COMMERCIAL PARTNERS OUTLINE THEIR HOPES AND PLANS FOR THE RUN-UP TO 2012

- Sally Hancock, director, London 2012 Partnership and Group Sponsorship, Lloyds TSB

"We are helping LOCOG to pursue its aim of making 2012 everyone's games, so our strategy is predicated around what we can do in communities throughout the country.

"We want to support young people, businesses and communities on their journeys to 2012 and beyond. This can mean anything from young people wanting to continue with sport after leaving school, to how to support clubs and associations in providing a better infrastructure for people who want to get more active.

"We are using our branches, financial mentoring and coaching to help clubs, societies and athletes.

"We will be one of the partners for the Live Sites, which are currently managed by the BBC, but will come under LOCOG's remit from August. There will be 40 big screen areas where you can watch the games.

"The 2012 games are also a single unifying opportunity for the bank's staff and help us to meet the aims of our corporate social responsibility agenda."

- Gareth Wynn, group director, Olympic and Paralympic Programme, EDF Energy

"The 2012 partnership is a platform for us to connect with customers in a way that would have otherwise been difficult to do. The sustainability partnership is important, and we will provide all the electricity and gas for the games from renewable energy sources.

"Our 2012 carbon pledge is about encouraging people to reduce their carbon footprint. This is a mechanism for us to develop more of an individual relationship with our customers, which is historically difficult for utility companies. With LOCOG, we will also help develop content for the sustainability element of the London 2012 educational programme.

"We're using the partnership with 2012 to open doors to relationships with other companies, such as Lloyds TSB. Our expectation is that we'll find commercial opportunities and joint marketing activities that have mutual value.

"With the greener flame, which is such an iconic part of the Olympics, we will hope to send a message about sustainability to the world."