2012 Olympics - Opportunity for All?

Nigel Currie

Director
brandRapport

The 2012 Olympics represents a golden opportunity for the sponsorship industry. Nigel Currie considers the benefits and pitfalls of Olympic association.


Sponsorship as a marketing discipline offers many benefits - from the obvious awareness and exposure opportunities, to hospitality, PR, sales promotion, direct mail and advertising opportunities. However, without question, it is the levels of media exposure and awareness that has been the most attractive feature and the one that entices most companies or brands to become sponsors of major sporting events.

This is why Olympic sponsorship should almost be put into a different marketing category, treated as an entirely separate type of marketing activity and perhaps even renamed. This is because the one thing that Olympic sponsorship programmes do not deliver is widespread media exposure. Indeed, everything that the Olympics offers to its sponsors is slightly different, less obvious and less mainstream.

Contract Confusion

There have been arguments within the industry for some time now that the word ‘sponsorship’ should be replaced. It has philanthropic connotations, it means different things in different countries and it doesn’t totally describe the nature of the business. Now, as the profile of the Olympics starts to rise in the run-up to Beijing, and inevitably London 2012, more questions are being asked (as LOCOG signs agreements with various companies) about how their rights and benefits compare with other sponsors of major sporting events, teams or individuals. Indeed, there are comparisons of Olympic sponsorship agreements that have been signed with different bodies with different remits from a variety of different countries.

Of course, there are any number of varied reasons why sponsors get involved with a particular sponsorship property and those sponsors choosing to associate themselves with the Olympics have very different reasons and objectives for wanting to align themselves with the biggest and most far-reaching sporting extravaganza in the world.

Unique Sponsorship Model

The Olympics certainly does not provide the standard sponsorship model. An analysis of its attributes don’t immediately make it stand out as a dream option for leading brands:

· The event lasts three weeks and only takes place every four years (albeit the winter Olympics provides additional opportunities in between the Summer Games)
· Unlike other major global sporting events such as the World Cup or Formula One, there is no branding visible to the massive global audiences
· There are a range of very different sponsorship packages being sold by the IOC and the individual host countries all with different rights and levels of involvement
· The benefits available to the local sponsors requires a completely different marketing approach to traditional sponsorship agreements.

The cost of Olympic sponsorship agreements does, however, warrant serious analysis by those undertaking them and probably the most important thing is to have complete understanding of what the opportunity offers and exactly how it can be used to deliver the maximum returns. Without total understanding of the product and its offering, sponsors taking on Olympic sponsorship programmes will end up being disappointed.

Companies, and all the key personnel within the company, need to know exactly what they will get in terms of benefits and what they will have to do to make it work for them. That may seem obvious, but because of the use of the word ‘sponsorship,’ the preconceptions people have about what a sponsorship agreement is and what it should offer, total clarification is required to manage expectations.

There are so many unusual aspects to an involvement with the Olympics. The Olympics is not just about sport – It involves every aspect of sport from the very top internationally renowned athletes to the very best amateurs from less well known sports to the physically handicapped athletes. It is also an opportunity for athletes and supporters from almost every country in the world to come together and share the experiences of competing against each other on the world stage.

No other event in any walk of life does this. The Olympics is so big and all-embracing – culture, religion, politics, business, history, geography – that almost every aspect of life is encapsulated in the Games and what they stand for. An understanding of this is vital in enabling a company and its personnel to realise exactly what an association with the Olympics can do for them.

Budget Impact or New Money?

Of course there are many who are critical of Olympic sponsorship programmes. Too many sponsors and too much clutter, not enough rights and extremely expensive. There are also many in the UK who fear the impact that the London Olympics will have on the overall sponsorship market. With LOCOG aiming to secure £750 million over the next four years that is going to remove a sizable percentage of the overall sponsorship budget in the UK.

Or will it? I believe that the money earmarked for the London Games by major companies will be “new money.” It will come from different budgets – more corporate than marketing. In many cases, it will see initiatives and decisions reverting back to the very top of businesses where Chairmen and Chief Executives become directly involved rather than the Marketing Director and his team.

Olympic Fallout

Where an impact may be felt is within the smaller, non-Olympic sports in the UK. The Olympic sports are all enjoying a boom as we begin the run-up to London 2012. Government money is available to help with facilities, preparation and athlete training and many companies and brands are choosing to align themselves with individual sports rather than directly with Olympic bodies. For those sports that don’t have Olympic status, the next few years may be quite tough. It is hard enough for sports, such as squash and netball, to attract sponsors but it certainly going to get tougher as brands look to secure links in whichever way they can to the London Games.

The one thing that is guaranteed is that the next four and a half years will be the most active yet for the sponsorship industry in this country. The Olympics coming to the UK is a once-in-a-lifetime opportunity and there will be a lot of companies who feel they must get involved and become part of the event.

As long as each sponsor focuses on their own objectives and reasons for being involved, they will get the results they are looking for. The London Olympics has already attracted huge levels of media coverage and this will grow throughout the run-up to Beijing. After Beijing, the spotlight will fall on London as the next hosts and every single aspect of the London Games will be scrutinised by the media. Even if this does not result in direct exposure, it will certainly deliver considerable comfort to the sponsors to know that they are part of the carnival.