Forget Atlanta. Nagano 1998, home of the winter Olympics, and Sydney 2000 are what matter now. An estimated three billion viewers tuned in to the two weeks of competition, but behind the scenes in downtown Atlanta another set of people were meeting, discussing, negotiating and haggling. Their minds were firmly focused on another time, another place.
To be fair, the sponsors of the greatest show on earth will not forget Atlanta so quickly. All are involved in post-mortems and calculating the success, not of the multitude of Olympians, but of their own multimillion-pound spends.
However, in the last week of the Games there was a series of meetings between the global sponsors and the International Olympic Committee members. Some were pre-arranged and others apparently called at short notice.
Apart from Sydney, the agenda included ambush marketing, greater protection for sponsors, ending the sponsorship clutter which riddled Atlanta and, according to one source, negotiations about fully “global” sponsorships. That would erase the confusion that led McDonald’s to sulk over Burger King’s sponsorship of the British Olympic team. McDonald’s recent promotion to the top ten sponsor scheme should mean that Burger King will not be involved with the British team next time round.
But implicit in the discussions in Atlanta was ownership of the Olympic Games and its trademark five rings.
The IOC, which has driven the Games down an increasingly commercial route since Los Angeles in 1984, also had things to discuss. But even the most devoted advocate of commercial exploitation believes that Atlanta went too far. It has drawn up a 30-page list of new conditions for future Olympic cities to ensure the local organising committee will not work at commercial cross-purposes with the IOC and undermine its exclusive global sponsorship deals. The global sponsors, which had anticipated ambush marketing from international rivals, could not have expected an Atlanta-inspired ambush. But that is what happened.
The new IOC conditions are linked to the enthusiasm with which the Atlanta organising committee signed up its own Olympic sponsors. Many were paying more than the $40m (26m) standard entry fee charged by the IOC for a global deal and confusion was inevitable. It meant that Budweiser, a US sponsor, ran a television campaign in the UK that could have led to people believing it was a global one.
But there are legal doubts about how far the IOC can restrict the host city from exploiting commercial opportunities.
“The City of Atlanta and the organising committee were not at one,” says IOC committee marketing director Michael Payne. “And the commercialisation has not been down to the sponsors. The contract with the host cities used to be a few pages long, but now it is a very detailed document.”
The IOC has clearly come under pressure from global sponsors who suffered from “Atlanta anonymity” and clutter. Others in the different sponsorship categories were concerned that their position in the official sponsor village was obscured by the logos of non-sponsors just outside the area.
But if the 1996 Games were a triumph of hype – and several members of the IOC think they went too far – just wait for Sydney. Atlanta was only a centennial of the (revived) Olympic movement. That’s nothing compared to 2000. Then “the Olympics will become the world’s millennial birthday party”, enthuses Payne.
“The broad categories of sponsorship have been a little confusing,” admits Payne, who says that in Sydney the number of sponsors will be reduced by “around 50 per cent”. At the same time the TOP scheme could be expanded to 12 for four years’ time.
The Sydney Games effectively began on Sunday with the Atlanta post-mortems. Sponsors, would-be sponsors and IOC marketers have plenty to mull. There will be questions about whether the sponsorship was value for money and how it could have been done better. With a variety of immediate and long-term objectives and payback time scales the answer for each sponsor is different.
Global sponsors such as Coca-Cola are seeking immediate incremental volume. But they also have more subtle objectives. “Many individuals involved with the Olympic movement are also important players in business and government in their respective countries,” notes Stu Cross, worldwide director of sports for Coca-Cola. “These contacts often prove very beneficial as we build the Coca-Cola business around the world.”
IBM, a fellow member of the IOC’s worldwide TOP sponsorship, is also looking for extra sales, but not immediately. Elizabeth Primrose-Smith, director of its worldwide Olympic operations, sees the Games as a showcase for IBM technology, and because computer buying cycles are so long the Olympics activity “might open doors in 18 months’ time”.
Other sponsors have so integrated the Olympic activity into their marketing fabric that making the distinction between Olympic and non-Olympic marketing is becoming academic. For sponsors such as Coca-Cola, which has signed up to the Games until 2008, Kodak, Visa, Time/Sports Illustrated and Matsushita/Panasonic, which have been TOP sponsors since 1988, the Olympics are no longer an extra item in one annual budget. “We’re doing it year in, year out. We’d have to drop the sponsorship to see how much we would lose,” says Visa director of event marketing Brad Hennig.
But when it comes to levering more value from Olympic sponsorship, the clear answer from Atlanta is that most companies could do better. Consumers are getting wise to sponsors who simply slap sporting logos on their ads and promotions.
To “connect” with consumers, as Coca-Cola marketers put it, sponsors need to offer experiences, not just ads. Why, for example, was a push-the-button test that rammed home the slowness of humans as timekeepers located in a Coca-Cola tent and not in that of official timekeeper, Swatch?
As with consumers, so with rights holders. Come the millennial games in Sydney, the IOC will be expecting much more from its main sponsors. Payne says: “We have clarified the IOC’s corporate objectives from sponsorship deals. It’s not just to maximise revenues in the short term, but to sell and market the Olympics and the Olympic idea generally.”
Which is what companies like Coca-Cola did by distributing tickets to the remotest corners of the US and organising an estimated 40 million people to watch the Atlanta torch relay thread its way across the US.
The IOC, in its turn, has a list of things to sort out post-Atlanta. Its TOP sponsorship is based on exclusivity. There are just ten global sponsors. But their status is confused by the many layers of sponsorship underneath. Atlanta also boasted Centennial Games partners, Olympic Games sponsors, team sponsors, and official suppliers to teams.
The clutter reached Olympian proportions. An eve-of-games CIA MediaLab survey found that public awareness of British Olympic team sponsors was abysmally low. Only two out of 22 – Coca-Cola and Kodak – reached awareness levels of ten per cent or more. Some, like Bausch & Lomb scored zero. A similar survey by BMRB International found that 27 per cent of US adults thought Nike was a sponsor. It isn’t.
That raises the hoary question of ambush marketing. Atlanta was the showcase for the IOC’s new, improved double-whammy approach to would-be Olympic trademark infringers. Before they have the chance to say “on your marks, get set …” they’ve got a posse of lawyers crawling all over them.
But Atlanta has also shown that protecting trademarks is the easy part. Where the IOC was on more uncertain ground was in its bid to enforce exclusivity. Its actions come close to anti-competitive behaviour.
Who says, for example, that host cities should ban non-sponsor advertisers from putting up posters, or bar them from erecting hospitality tents (which is what Nike did to good effect)? And how is the IOC going to police the Internet as initiatives like Nike’s @tlanta Web site proliferate? If it tries, at what point does a campaign against ambush marketing infringe other companies’ commercial freedom? Yet that is what the new IOC conditions will seek to do.
You then have intra-Olympic ambush marketing. When Triumph International issued a poster featuring a female athlete jutting her bosom out to reach the finishing line first, some thought it was just a clever piece of creative work. But no. Triumph is the “official supplier of sporting bras to the British Olympic team”. Yet surely a local supplier of bras shouldn’t have the same rights to the precious five rings as a global backer such as Panasonic – even in its home market? The IOC clearly agrees and has condemned the Triumph ad for “trivialising” the Games.
This confusion between different tiers of sponsorship was rife at Atlanta. US-only sponsors such as Budweiser, AT&T and Swatch made a much bigger splash than global sponsors like Xerox and IBM. Yet it’s difficult for the IOC to seek restrictions when, as the IOC’s Payne admits, some of these local US sponsors paid more to tout their Olympic connection in just one country than Coke did for global rights estimated to be worth $40m (26m). “Market dynamics dictate it,” he says.
It is the type of confusion that the IOC is seeking to erase with its new 30-page document for the city elders of Nagano 1998 and Sydney 2000.
As the sponsors and the IOC begin thrashing out these issues, most remain satisfied with their Olympic link. One that isn’t is Bausch & Lomb. Its public leverage of the Olympic association has been minimal – a reflection of internal corporate turmoil following the ousting of long-time chief executive Daniel Gill late last year. The company is the only TOP sponsor to opt out of the programme although it says other forms of Olympic involvement will continue.
But all the other TOP sponsors are coming back for more. The little known (outside the US) insurance company John Hancock Life Assurance claims local Olympic events triggered 11,000 new business enquiries.
A Visa promotion which passes a donation to local Olympic teams each time a Visa card is used encouraged “significant” sales increases, says Hennig. Even IBM, with its much publicised computing glitches, is crowing.
After all, says Payne, the Olympics are still “the ultimate image transfer device”. And sponsors know they are on to a good thing. “We have had competitors of TOP sponsors coming to us with blank cheques and saying ‘name your price’,” says Payne. “But our strategy of continuity is more important than a Dutch auction.”
Even so, like ambush marketing and effectiveness measurement, the debate over commercial “exploitation” of sport looks likely to run and run. Payne is ready for it. “It’s become popular to say that commercialism has corrupted the Games’ brand values,” he says. “You tell me how? Every time I ask I get a deafening silence. Who else would fund the Games if we did not develop marketing programmes for them?”
And there lies the rub. Several of the key global sponsors are now such a fundamental part of the Olympics that even more than the athletes, weightlifters, swimmers and gymnasts, the Olympic rings now belong to the sponsors.
That is why the IOC is hastily redrawing its sponsor protection plans and why the sponsors are in such a powerful position. If they pull the plug, the greatest show on earth would come to an abrupt end.