The pros and cons of O2’s entertainment complex

O2’s 90m investment in a brand association with the former Millennium Dome in Greenwich has revolutionised the concept of sponsorship and taken marketing onto a new level.

o2%20venueO2’s £90m investment in a brand association with the former Millennium Dome in Greenwich has revolutionised the concept of sponsorship and taken marketing onto a new level.

However, critics wonder if the mobile phone operator will suffer a backlash, as non-O2 consumers are deprived of extra incentives aimed solely at O2 users.

The mobile phone group is spending £6m a year over the next 15 years to stamp its name on the entertainment complex, which opened its doors to the public this week. O2’s support for the venue, which encompasses a 20,000-seat arena for music and sport events, an 11-screen cinema complex and a smaller venue called O2 Indigo, is unrivalled in the telecoms sector and considered by some as a risky move.

Considerable perks
Two years of preparations for the opening with the site’s owner AEG UK culminated last week in a £6.5m joint advertising drive that highlights the “considerable perks” O2 customers are being offered at the complex.

These include priority tickets available to the mobile giant’s customers 48 hours before other consumers (to date, 90,000 O2 affiliates have utilised this service for concerts by the likes of Justin Timberlake, Take That and Bon Jovi), admission to the exclusive Blueroom Bar and VIP lounge, the ability to download exclusive event-related material before the show and the facility to utilise their handsets as digital tickets for access to special areas inside the venue.

Mathew Key, head of O2 UK says: “We want everyone who comes through the door of The O2 to have a fantastic time, but we will also be sharing some extra benefits with those who have made all this possible – our customers.” Industry experts say this strategy will certainly make the mobile phone group’s customers feel special, but it also carries the risk of alienating non-O2 customers by excluding them from benefits that should be available to all customers at The O2 venue.

Ironically, O2’s head of sponsorship and interactive partnerships, Amanda Jennings, says the company decided to invest in the leisure complex in order to utilise it as a platform for music and entertainment – because music is all-encompassing and does not exclude anyone. She adds: “We wanted to turn O2 customers into music fans and move their loyalty from a functional to an emotional point of view.” 

Charlie McEwen, head of sponsorship and consulting at sports marketing agency Accelerate, thinks The O2 was designed to be a venue for all consumers in the UK regardless of their mobile phone allegiance, but admits that all sponsorship possesses some form of exclusivity.

Strategy implementation
He says: “Sponsorship can alienate people, but that is part of the benefit of being a sponsor. O2 is well within its rights to implement this strategy, but will it be effective? It has made its call to achieve certain objectives, but this promotion could have been more encompassing.” 

Jennings defends the sponsorship tactics by stressing O2’s lengthy trial of the concept on a smaller scale. She says: “We tried it out at Scrum in the Park and at the O2 Wireless festival, and we never once received any negative feedback. We would never have done this in such an overt way if it hadn’t proved successful in the past.” 

The aim of the sponsorship is to evolve O2 as an entertainment brand as well as a mobile phone provider, says Jennings.

Others fear this line of sponsorship may not work in the way O2 is expecting it to. Lucy Adams, account manager at sponsorship consultancy Generate, says: “I don’t think people will be driven to use a provider such as O2 just to get deals at The O2.” 

She concedes the mobile phone provider’s general rebranding strategy from the old BT Cellnet has been “first-class”, but it has somehow transformed The O2 venue into a brand within a brand as opposed to a sponsorship venue. She says: “As a customer at The O2, I am not associating the venue with the mobile phone company. The promotion isn’t strong enough to achieve all O2 wants in terms of brand building and increasing customers.

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