The addition of Adidas to the growing group of “founder partners” of The O2, underlines the revival of the structure once known as London’s Millennium Dome – one of the nation’s worst public relations disasters.
Since it opened in July last year, following a £350m refit, critics have been confounded by the success of the O2, which earlier this month recorded its 10 millionth visitor and has been widely dubbed the most popular music venue in the world.
It’s owner, AEG – a US entertainment and sports group, which owns similar venues in the US and Europe, including the Staples Center in Los Angeles – also owns several sports teams including LA Galaxy, where David Beckham now plays.
The company apparently saw the potential of the site, where others could only see its past failure, and applied its “little entertainment city” formula, that it has developed in other locations. Since opening, the O2 has hosted the likes of Prince, The Spice Girls and Led Zeppelin, as well as a Tutankhamun exhibition and NBA basketball.
Aside from AEG itself, the biggest winner is O2, the mobile phone brand, and the company can hardly believe its luck. O2 head of brand and marketing communications Shardi Halliwell says/ “It has exceeded all our expectations.”
Indeed, among the things no one could have predicted was that the name O2 would be immediately adopted, going a long way to shaking off the unhappy legacy. Halliwell says O2 is now making the development of “experiences” central to its brand strategy when reviewing its broader sponsorship portfolio. The company has already taken on a similar venue in Berlin, known as O2 World.
AEG director of sponsorship Paul Samuels, who was working at O2 as its head of sponsorship at the time of the deal, reveals that when AEG first approached the company, O2 was not interested. But when the creation of specific benefits for O2 customers was suggested, O2 realised it might have found the solution to its customer retention problems, a key consideration for the brand at the time.
The deal, worth £6m a year for a further 14 years, is doing just that, according to Halliwell. “It has really driven brand love,” she says and adds: “It allows us to offer exclusive benefits, such as preferential ticketing, exclusive areas and showcase different mobile technologies.”
The US-style “entertainment destination” positioning of the O2 has been criticised by some as “bland”. The restaurants in a faux street setting and the layers of corporate hospitality privileges will not appeal to fans of grimy, urban rock concerts, despite the addition of a smaller gig space, called IndigO2. But Samuels is unashamed of its mass-market targeting. “You can’t please 100% of people,” he says.
Other companies, quick to spot the growing success, and attracted by the site being named as a venue for the London 2012 Olympics, are signing up as “founder partners” in deals worth between £1m and £2m per year.
Adidas will join Credit Suisse, ADT, InBev, NEC, BMW, Nestlé, Pepsi, Visa and RBS in this tier. All deals offer exclusive benefits of some kind, for example preferential parking for BMW owners. AEG hopes to find more partners in other categories.
M&C Saatchi head of entertainment Dave Roberts says: “The best of those deals will not be dependent on brand exposure at the venue. They’ll hinge on the additional rights and how they are activated. It is also important that AEG offers access to its promoter roster and perhaps that hasn’t yet been exploited in terms of unique content access to partners.”
Although O2 takes the lion’s share of kudos associated with the venue – and crucially – implicit links with everything that goes on inside it, experts say it could still be a good deal for prospective partners, if brands are clever.