An Intense Olympic Flame at Beijing

5 Sep 2008
Competition at the Bird's Nest was not confined to sport. Brands raced for a piece of the Olympic pie, and stakes were high. Eager to capitalise on the universal goodwill and popularity of global events epitomised by the Olympics, companies outlaid up to $150 million to secure official Olympic sponsorship status. Moreover, sponsors invested up to four times this to leverage their sponsorship through campaigns designed to communicate their Olympic association. The demand for sponsorship in Beijing has been intensified by the potential growth opportunity offered by the largely untapped lucrative Chinese market. The Chinese government has been astute in channeling this demand by negotiating the largest number of sponsors ever secured in Olympic history. With exclusivity being a key sponsorship success factor, the resulting sponsorship clutter has made for very interesting, even entertaining viewing from a marketing and policy perspective. The Beijing Olympics represents a unique forum through which to observe this brand warfare being played out among sponsors and non-sponsors keen to free ride on the global appeal and reach of the Games. The Olympics marketing platform is understandably a crowded one. The 45 sponsors, with varying degrees of official sponsorship status, were regularly challenged by ambushing brands, equally keen to affiliate with the biggest show in town. "Ambush marketing" is a practice whereby a non-sponsor creates a link to a sponsored event without securing formal sponsorship rights and effectively parlays official sponsors in doing so. It commonly involves creative and often amusing advertising, and specific attempts have sparked the introduction of anti-ambushing legislation in host nations, including China. The multi-layered complexity of sponsorship and the diversity of event stakeholders mean that the distinction between legitimate sponsors and ambushers is a subtle one. This renders it difficult for legitimate sponsors and event organizers to seek legal remedy, or pre-empt ambushing tactics. China's clean venue policy has served to intensify the brand warfare in television and internet media. Even with official sponsors' first option to advertising around the event (a common clause in sponsorship contracts), it is not feasible to secure all advertising slots, leaving opportunity for potential ambushers to take them up. Inability to own the generic value of sport also limits the legal ambit of sponsorship protection. The Olympic flame burns fiercely in the perennially competitive sports shoe category. While Adidas secured official Olympic Partner status, Nike, equally keen to strengthen its presence in the Chinese market, secured sponsorship deals with several Chinese individual athletes and teams favoured to win gold medals. Ironically, Nike-sponsored athletes competed in Nike sports clothing but changed into Adidas tracksuits on the podium. Meanwhile, Chinese sportswear manufacturer, Li Ning, sponsored the Chinese mainland commentators, who were completely attired in Li Ning branded clothing on air. Even more subtly, it was the company's namesake and chairman, Li Ning himself, who unforgettably lit the Olympic flame at the opening ceremony. With an estimated audience of 4 billion, this was possibly one of the most successful ambushing strategies in history. My research examines sponsorship linked advertising and its inevitable counterpart, ambushing. I have developed a three point test to objectively distinguish ambushers from sponsors in a context where both adopt similarly themed campaigns around the event. The test identifies blatant ambushing as those brands which place advertising coincidental to the event (timing), place ads tied to the event in the same media as legitimate sponsors (context) and receive publicity for their, or the industry's competitive behaviour (press). Findings suggesting that the risk of ambushing for legitimate sponsors is high, point to a need to explicitly articulate a sponsorship link by a statement or event logo embedded within the advertising. Traditional definitions of ambushing are extended by the research to include lower level sponsors which may effectively parlay official sponsorship status, particularly when they engage in a high relative proportion of leveraging (i.e. marginal ambushers). This is an important finding in light of the multilayered complexity of sponsorship. The Beijing Olympics secured a record number of sponsors at a plethora of levels, including worldwide sponsors, China sponsors, official suppliers, team sponsors, broadcasters, and internet sponsors. I am now conducting a review of the content of the entire Olympic television coverage in Australia and the United States to gain insight into the prevalence and nature of sponsorship linked advertising and ambushing. The study follows my experimental findings which show that ambushing potentially causes confusion in the marketplace and is therefore a real threat to sponsorship awareness objectives, and the development of brand equity. This finding is consistent with recent survey evidence from China highlighting consumers' inability to remember official Olympic sponsors. With sponsorship expenditure expected to top $50 billion in 2008, and associated sponsorship leveraging to average 2-5 times that, the Beijing Olympics represent a useful case study for marketers and public policy makers alike. Tips for practitioners: For sponsorship to work, you must be prepared to spend at least the same amount again on leveraging the sponsorship, for example through advertising. Adopt an execution which explicitly communicates the sponsorship tie. For example, "proud to be an official partner" and display the event logo. Avoid a purely themed campaign (i.e., no explicit reference to sponsorship status). This leveraging strategy is vulnerable to ambushing. Assume that sponsorship of large events will attract ambushers and plan appropriate counter strategy to protect sponsorship investments. Understand that while some legal protection exists for blatant infringement, "marginal ambushing" will continue to exist legally.