Aug 27, 2008

Mktg - Brands preparing for marketing strategies for Olympics 2012

In a few short weeks, the Beijing Olympic Games will be history. As the last spectator files out of the Chinese capital’s Bird’s Nest stadium on 24 August, the eyes of the world will turn to London, and 2012.

For marketers, the planning has already begun in earnest. Brands that have already signed up as sponsors for London 2012 include BP, BT, British Airways and Lloyds TSB. As they prepare over the next four years, the question arises as to what they can learn from Beijing.

Perhaps the trend that has really set this summer’s Olympics apart is the battle between sponsors and marketers keen to capitalize on the Games without paying for official endorsements. For all the obvious differences between the UK and China, this will be an equally significant issue affecting the marketing strategies surrounding London 2012. At Beijing, the rights of sponsors have been policed in a way never witnessed before .

This has been particularly evident in the outdoor sector, with brands employing classic ambush marketing strategies by buying up billboards around the Games. To counter this, the Beijing Organizing Committee for the Olympic Games (BOCOG) introduced the priority allocation of prominent surrounding sites to official sponsors between July and September. In an attempt to gain greater control over the fragmented outdoor scene, it also removed hundreds of billboards and invalidated advertising contracts signed last year, insisting that brands buy bundled packages at capped rates. In the lead-up to the Games, rumours circulated that ads from non-sponsors would be taken down.

Moreover, in an unprecedented move, the China Advertising Association recently banned non-sponsors of the Games from running ads featuring Olympic athletes. The International Olympic Committee (IOC), eager to protect the value of its lucrative sponsorships, has been behind much of this clampdown activity. However, it has not prevented some blatant attempts at ambush marketing. Local sportswear brand Li-Ning - whose slogan ‘Anything is possible’ is strikingly similar to Adidas’ ‘Impossible is nothing’ — even tried to have broadcasters on Chinese state TV wear its branded clothing while on air, before BOCOG intervened.

“Guerrilla marketing has been huge this year, more than in past Olympics,” says Shaun Rein, chief executive of China Market Research (CMR) Group. “Even companies in unrelated industries are using sports imagery in their ads. As a result, it is harder and harder for official sponsors to stand out above the din.”

That view is shared by Alexandra Oikonomidou, director of Ogilvy PR Worldwide and previously a member of the Athens 2004 organising committee. “During this Games, guerrilla activity has taken a whole new role and is more aggressive than anything I have seen at previous Games. Nevertheless, BOCOG has also become more sophisticated at handling this.”

London should be a less chaotic market — outdoor operators have already begun offering billboards on long-term contracts — but marketers should expect similarly strict enforcement of sponsors’ rights. “The protection of the Olympic intellectual property rights has become a serious responsibility for the organising committee; non-Olympic sponsors are very limited in what they can do during the Games,” says Oikonomidou.The increased vigilance over sponsors’ rights dovetails with another notable feature of 2008 Olympic marketing: the use of digital . The internet has been a key battleground between sponsors and non-sponsors at Beijing , and the brands that have made best use of the medium have achieved the greatest standout amid the Olympic clutter.

It should be remembered that this is the first Olympics since the term ‘web 2.0’ emerged into the marketing vernacular. In the four years following the Athens Games in 2004, sites such as YouTube, MySpace and Facebook have become global household names.

As a result, social media platforms have been making their Olympic debut at Beijing.
“TV as a means of delivering the Olympics has peaked,” says marketing consultant David Wolf, chief executive of Wolf Group Asia, who is based in Beijing. “The future of the Olympic movement will depend on online and mobile audiences, and how well organisers and sponsors learn to use those media .” One advantage for sponsors is that online channels have opened up innovative methods of engaging consumers and leveraging expensive Olympic rights. McDonald’s has been one of the most successful in this.

Its ‘Cheer for China’ campaign encouraged consumers to upload videos of themselves cheering on Olympians to win tickets to the opening ceremony. From the 1.2m videos submitted, five ‘cheerers’ were chosen to take part in an online reality TV show.

The significance of the campaign is that it used the web to piggyback on the Chinese patriotic fervour stirred by the hosting of the Olympics, and turn it to the brand’s advantage. “From research, we found that Chinese consumers were behind the Olympics, yet they did not know how they could contribute or participate,” says Dirk Eschenbacher , executive creative director of Tribal DDB in Shanghai, which created the McDonald’s work. “The campaign focused on the basic premise that everyone wants to be involved, and it gave the audience a platform and opportunity to achieve that.”

While UK citizens have very different priorities from those in China, London 2012 is also being billed as an event for the whole nation . Similar tactics will be used to engage Britons as the event approaches. However, the relatively unregulated online environment has also opened up opportunities for nonsponsors . As BOCOG’s power over the web has been limited, it has become a platform for ambush marketing.

Pepsi has taken advantage of this with its ‘Everyone can be on the can for China’ campaign , which involved a user-generated content competition. It made no mention of the Olympics, but clearly sought to ride on the attendant wave of nationalism and optimism . According to research by CMR Group conducted in 10 Chinese cities, 60% of respondents thought that Pepsi was the official drink of the Olympics, with only 40% naming the actual sponsor, Coca-Cola . The reason , CMR’s Rein suggests, is that Pepsi was seen as having better marketing campaigns.

The key lesson for marketers targeting the 2012 Olympics is that competition to stand out will be fierce, and sponsors will have to develop intelligent strategies if they are to make the most of their huge investment in the Games.

The IOC is becoming more stringent in its focus on sponsors’ rights to protect the value of its deals, but non-sponsors are becoming more sophisticated in the methods — particularly the online strategies — they use to cash in on the domestic euphoria surrounding the Olympics. As Wolf concludes, “guerrilla marketers are already learning from the BOCOG/IOC effort here [in China] to begin designing campaigns for London 2012”.
Sponsor brands such as BA and BT should take note and formulate their strategies now, or find themselves out-manoeuvred in 2012.Facts And Figures

The Beijing Olympics is on course to be the most marketed to date. The sponsorship roster comprises 12 global partners (including Coca-Cola and Visa) and 21 local sponsors (including Western players such as Johnson & Johnson and Adidas), compared with Athens 2004’s 11 global and 13 local sponsors.

While the spends of individual brands have not been disclosed, the total value of sponsor-ship and athlete endorsement investment for the event is estimated to be more than $2 billion.

One of the key draws for brands is China’s burgeoning middle class, now accounting for 250m people . Needless to say, the UK is a far smaller and more mature market. The London Organising Committee for the Olympic Games’ (LOCOG’s ) tier-one sponsors to date include classic British brands BP, BT, BA and Lloyds TSB, although German sportswear brand Adidas and French energy company EDF add an international element to the line-up .

LOCOG needs to raise £2 billion, and has set a target of £650 million from sponsorship. According to a progress report in June this year, it has raised £317 million to date. The value of these deals is estimated at between £50 million and £80 million each.

As a national event, the Olympics will be important , but it is unlikely to have the same cultural significance in the UK as it does in China, where the Games has been portrayed as a marker of the nation’s arrival as a major world power.

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