EVENT ANALYSIS: OLYMPIC SPONSORSHIP

tagged: advertising  branding  broadcast  event analysis  ioc  marketing  olympics  rule 40  sponsorship  strategy  usoc 

posted on March 15, 2018

Successful Olympic sponsorship is for brands who listen, engage and spend. And spend they do: IOC deals have averaged around $100 million for one cycle (four years), and $200 million for two cycles (eight years). These sponsors are minutely critiqued on advertising, onsite activation and Olympic legacy. Many brands have been long-term partners, indicating the importance brands place on the IOC and Olympics as a partner. 

 

TOP Sponsors & Programme

The Olympic Partner (TOP) Programme currently encompasses thirteen brands, each with its own exclusive category. Participation in the program is expensive. Two of the most recent deals have estimated values between $400 million and $835 million. Both deals included rights at two Summer and two Winter Games. Therefore, it is likely the level of exposure and activation varied significantly.

Current TOP participants (and categories) are listed below. Also noted is the first year of sponsorship, and the final Olympic Games under each brand's current contract.

  • Coca-Cola (Non-Alcoholic Beverages); 1928, 2020
  • Alibaba Group (Cloud Services and E-Commerce Platform Services); 2018, 2028
  • Atos (Information Technology); 1989, 2020
  • Bridgestone (Tyres, Certain Tyre and Automotive Vehicle Services, Self-Propelled Bicycles, Seismic Isolation Bearings and a variety of diversified products that include Marine Fenders, Certain Roofing and Building Materials, Rubber Tracks and Metal Wall Panels); 2014, 2024
  • Dow (Chemistry Company and Carbon Partner); 2010, 2020
  • GE (Energy Generation Systems, Energy Distribution Systems, Healthcare: Diagnostic Imaging, Monitoring and Electronic Medical Records Technology, Lighting Fixtures & Systems, Aircraft Engines, Rail Transportation, Water Treatment Facilities & Services, Equipment & Transportation Management); 2005, 2020
  • Intel (Technology Developments); 2017, 2024
  • Omega (Time Pieces (For example, Watches, Clocks and Official Countdown Clocks), Timing Systems/Services, and Electronic Timing, Scoring and Scoreboard Systems and Services); 2004, 2032
  • Panasonic (Audio/TV/Video Equipment); 1987; 2024
  • P&G (Personal Care and Household Products); 2010, 2020
  • Samsung (Wireless Communications Equipment and Computing Equipment Category); 1998, 2020
  • Toyota (Mobility); 2015, 2024
  • Visa (Payment Services); 1986, 2020

 

Future Outlook

Seven sponsors have contracts expiring in 2020; those brands may find the price tags increased significantly because of Toyota's blockbuster deal. Also important to realize is the two high-profile (and markedly expensive) upcoming host cities: Paris 2024 and Los Angeles 2028. Los Angeles sponsorship deals debut on the market next year. Paris is already selling.

Of the sponsors on the line for 2020 renewals, not all are guaranteed to return. SportsBusiness Journal reports Coca-Cola, Visa and P&G as most likely to return. With the deep pockets and success each of those brands have shown through their associations with the Olympics, it is hardly unsurprising. Whether the IOC experiences a high level of sponsor attrition in 2020 or not, it will be an interesting situation to follow. Will new categories open up? Which brands will be in line to sign deals? We saw McDonald’s exit in 2017, clearing the way for intel’s deal several weeks later. The IOC no longer has any food-related sponsor under contract. Additionally, it could also target other major categories like airlines or apparel. Those deals, like the one with Toyota, could completely change the market for national governing bodies as well.

 

"TOP" Broadcast Placement

At the most recent PyeongChang Olympic Games, several sponsors were broadcast advertisement heavy - and successful. Others were successful in more subtle marketing, aligning their brand with the Games during the broadcast with careful and non-obtrusive logo placement. We’ll discuss these brands next.

 

Alibaba

Alibaba went into its first Games with a small (for a TOP sponsor) but very meaningful footprint. The IOC's "Cloud Services" partner launched its Games-time campaign with the theme “To the greatness of small.” In line with that slogan, the brand brought an amateur Kenyan hockey team to PyeongChang for the Games.Typically a Summer Games contender, Kenya’s hockey market is small. The team brought to South Korea by Alibaba showed it is thriving nonetheless.

 

Procter & Gamble

P&G continued the very successful “Thank You Moms” series with an updated take on a few different social issues. The brand promoted the following social engagement hashtags during its broadcast and digital advertisements: #LoveOverBias and #LikeAGirl. Both highlighted different social issues.

P&G used different brands and social channels to promote each campaign. #ThankYouMom went with IOC nobility, featuring President Thomas Bach (and was posted on the @iocmedia account).

 

#LoveOverBias

#LoveOverBias took on two very visible social biasses: socioeconomic class and sexuality. Michelle Kwan, on the P&G flagship Twitter, discussed how her parents worked extraordinarily hard to support her dream. She never felt less than any other competitor, even with competition costumes created at home. Gus Kenworthy, a now-openly gay competitor, came out following the Sochi Olympics. His #LoveOverBias short film was showcased on the P&G everyday channel, and discussed both his difficult qualifying period for the Olympics, his work ethic and determination, and his very public coming out statements on Instagram and ESPN.

 

#LikeAGirl

P&G’s Always brand is the primary mover for the #LikeAGirl campaign. #LikeAGirl is not an Olympics-based campaign, but P&G athletes were great touchpoints for promotion. During the Games, Always featured Dara Howell. The brand usually tweeted its #LikeAGirl GIF during and after major female milestones during the Games (like the US women’s hockey gold) as well. Since the Games, Always has also used the hashtag to promote events like International Women’s Day and Women’s History Month.

 

Toyota

Toyota came into its first Olympics ready to impress. (Though the brand’s deal with the IOC was signed in 2015, activation rights were not immediate). As the official mobility partner of the IOC, rather than automobile partner, Toyota highlighted options outside the typical car advertisements. The brand’s broadcast commercials and social media posts with Team Toyota athletes highlighted the power of movement. One of Toyota’s more frequent advertisements featured Paralympic medallist Lauren Woolstencroft. Woolstencroft was born missing an arm and both legs below the knee. Toyota’s ad, part of the its #StartYourImpossible series, showed how these challenges did not stop Woolstencroft (to the tune of eight Paralympic medals).

Other #StartYourImpossible advertisements depicted athletes at PyeongChang who qualified despite other challenges in life. Two shown below portray Belle Brockhoff and Antonio Pardo, who overcame childhood bullying and job loss. Each commercial close includes a mixture of athletes and both traditional and non-traditional methods of transport.

 

SUCCESSFUL OLYMPIC SPONSORSHIP

At the past two Olympics, two UK publications have rated the most (and least) successful Games marketing at Sochi and Rio. Both The Drum and Marketing Week rated Samsung as one of the more (if not most) successful sponsor at each Games. Following the Rio Games in 2016, Samsung emerged as the most mentioned sponsor on digital media in the UK with an index ranking of 103. On the other hand, McDonald’s (which ended its IOC contract early during 2017) was near the bottom with an index ranking of 68, above only Omega. Samsung ended those Summer Games with over three times as many mentions as McDonald’s. The rankings done by Marketing Week took several factors into account including campaign scalability, social media response time, engagement and personalization (among others).

 

Winners:

  • Coca-Cola, Rio 2016, That’s Gold campaign
  • Nissan, Rio 2016, athlete briefing videos and Nissan Kicks Hotel
  • Samsung, Rio 2016, Samsung School of Rio campaign
  • Samsung, Sochi 2014, Samsung Galaxy Studio and Galaxy Team

 

Losers:

Some successful sponsorships are not as overt. Even when discussing in the office, following Omega's great PyeongChang recap video post on Twitter, one of our team members had not been aware Omega was a sponsor. Upon further discussion, we discovered that Omega had so fully integrated into the Games, always associated with an actual task, our team member hadn't differentiated. It's not ideal Omega wasn't immediately recognized as a sponsor, as the brand would likely prefer; however, it is wonderful to see the brand so fully associated with the Olympics rather than Olympic sponsorship.

 

LOC Sponsors

Domestic partners for each Games vary widely by geographic location. Depending on the the prestige of the city, TOP sponsors may sign additional deals with Local Organizing Committees (LOCs) for rights not guaranteed under their IOC deals.

Next, we'll look at a few past Games and the LOC sponsors. The Games were held in fairly diverse locations during the past four Olympics. In this case, we should be able to compare the different sponsors attracted to each.

Sources: London 2012, Rio 2016, Sochi 2014, PyeongChang 2018

The London 2012 Summer Games and the PyeongChang 2018 Winter Games were the most successful by quantity of LOC sponsors. All four Games were able to capitalize in the automotive category (BMW, Volkswagen, Nissan, and Hyundai/Kia, respectively). The Hyundai/Kia deal dramatically altered in importance because of the IOC’s own deal with Toyota as a TOP sponsor. Three (sans Rio) signed airline sponsors in British Airways (London), Aeroflot (Sochi), and Korean Air (PyeongChang). This category in particular is one that should be lucrative for any LOC. The IOC does not have an official airline; in the event that changes, it could severely limit LOC deal making capability. Similarly, we expect to see changes in the automotive category with the Toyota/IOC deal following the PyeongChang Games.

While Toyota was noticeably absent from the Korean Games, Reuters attributes that to simple common sense. Though the domestic deal mentioned above was announced several months after the TOP introduction,

“Toyota realized before signing with the International Olympic Committee (IOC) almost three years ago that these Games, like the South Korean car market, would always belong to Toyota’s local rivals, Hyundai and Kia.”

Expect to see a lot more Toyota beginning in Tokyo 2020 (and not just because Toyota is a Japanese brand).

 

Selling Period

LOCs also had significantly different experiences during the sponsorship sales cycle. London stocked up, signing “Partners” to $63 million deals and “Supporters” to $31 million deals. The LOC ended up generating 700 million GBP+ in revenue from 33 domestic sponsors. Not included above are London’s supplier partners (taken into account for both the total revenue and number of sponsors).

PyeongChang, much like other Winter Games, had a tougher road. It did exceed the LOC’s goal of 940 million won, with over one trillion won in sponsorship revenue (roughly $926 million). PyeongChang had 66 domestic partners, surpassing London, Sochi and Rio totals. The upcoming Tokyo Games in 2020 is set to be enormously successful in the sponsorship sphere. Reuters reported the LOC already has nearly $3 billion with deals already signed and more sponsors expected. Tokyo is expanding its domestic categories to sign multiple sponsors due to increased interest. Potential categories for expansion include airline, banking, and electronics. 

Sochi had a difficult sales cycle largely due to internal competition. In addition to the 2014 Games, a 2014 Formula 1 Russian race and 2018 FIFA World Cup had active selling cycles at the same time. These three events competed for domestic sponsorship, and Sochi did not always end up the winner. Sochi sold Tier One sponsorships for the equivalent of $100 million USD. Most noteworthy, the LOC lost Alrosa to the World Cup, and Gazprom to the Russian Olympic Team. In short, the LOC clearly had a difficult time communicating why it was the superior option.

 

Olympic Sponsorship with NOCs and NGBs

Partnerships with National Olympic Committees (NOCs) and National Governing Bodies (NGBs) can be as lucrative as LOC sponsorship agreements. There are a couple of major differences between the two; LOC sponsorships receive a higher billing from and at the event itself, whereas NOC/NGB sponsorships can have a longer shelf-life. Cons, of course, exist: NOCs and NGBs are barred by Rule 40 from notable advertisement during the Games promotional period.

 

National Olympic Committees

Deals with NOCs are still lucrative and successful for both rights holders and brands. Team USA has deals with Nabisco, Hershey’s, Milklife, United and more, all of whom received exposure on channels controlled by Team USA. These brands also utilized their own channels to post about their #TeamUSA affiliations, running contests and doing general shout-outs to successful American athletes. Nabisco, Hershey’s and United also all received plentiful airtime during the American broadcasts on NBC and its affiliates. 

Nabisco and United even utilized one of the tips posted in last week’s blog - no relation to our advice, but it’s always nice to see the big brands trendsetting with relative success.

Source: Twitter.com Screenshot on 1/18/2018

 

Though Nabisco itself doesn’t appear to have a brand presence on Twitter, its subsidiaries do. Chips Ahoy, Oreo and others were promoting Nabisco’s #BiteToWinSweepstakes. United used its boosted trend to promote #TeamUnited, which highlighted United’s Official Airline status with the USOC. It also allowed fans to collect e-trading cards of their favorite athletes.

Other notable NOC partnerships include a couple called out by Hubspot. Panasonic UK has a long-term contract with the British Olympic Association. In the first Summer Olympics following London 2012, Team GB and Panasonic used their partnership to keep the Olympic spirit alive and well in the UK. One goal of the campaign was to avoid a lull in excitement, awareness and engagement as the Games moved offshore. Another brand included was Chobani, with its partnership with Team USA highlighted by the #NoBadStuff campaign. This campaign, like Panasonic UK’s, featured athletes on their journey to the Games. It had broadcast, packaging and social components. Chobani renewed the partnership with the USOC in late 2014, and this successful campaign probably justified that decision.

 

National Governing Bodies

Putnam Investments is a brand that has chosen to associate itself with one NGB. Putnam has a small sponsorship portfolio. It includes three professional teams (all New England based), one NGB and four athletes (3 golfers, 1 skiier). The financial management firm aligned itself with US Ski and Snowboard in September 2010. That original deal went through the end of the Sochi Olympics in 2014; as Putnam is still listed as a sponsor on the USSA website, it is clear an extension was signed. 

US Ski and Snowboard delivers the market Putnam is aiming for, and the brand associates with the ideals espoused by the NGB. Putnam put in the effort required to succeed; the team researched successful Olympic sponsors and their advertisements and campaigns. The brand has visible branding on US Ski team uniforms. It is clear the small niche market that includes US Ski and Snowboard is the right one for Putnam. Consequently, the brand has been able to associate itself with the Olympics in a successful way.

 

Athlete Relationships

A (comparatively) less expensive sponsorship option associated with the Olympic Games includes deals done with specific athletes. This can also be one of the most individually trackable and rewarding partnerships; athletes require specialized training and equipment and sponsorship can help them achieve their goals.

Several TOP sponsors have “teams” of athletes they support, as do a few non-TOP brands. We’ve compiled a (decidedly incomplete) list of a few of the more prominent teams and brands at PyeongChang 2018 below.

Sources: Visa, Toyota (1) (2), Bridgestone, P&G, Deloitte

Olympic sponsorship of athletes is also a way for brands to gain authenticity and increased usage at the same time. Naturally, not all fans will jump on a product or service just because an Olympian has done so, but some will. Additionally, assuming that fan follows that sponsored athlete on social media, the fan will continually see branding and products in sponsored messaging. Posting responsibility often changes between brand and athlete, but athletes will commonly retweet, share or comment on brand posts.

Posts will also take different form, depending on what the sponsor is trying to achieve. Included below are a few options to compare:

 

a. Congratulatory posts for sponsored athletes after medalling or other achievement:

 

b. Event and sport preparation (these usually have a tie in with sponsor messaging or values):

 

c. Getting to know the person behind the athlete (these are more fun and often feel more intimate):

 

Guerrilla Marketing, Rule 40 & Advertisers

Rule 40 in the Olympic Charter is a guideline to govern general participation in the Olympic Games for competitors, personnel and officials. As sponsorship has become a lucrative portion of the IOC's revenues, especially considering broadcast and advertising rights, the body has aimed to further define what is, and is not, allowed at the Olympic Games. The TOP Programme launched in 1986, and since that time, there has been significant changes seen within the world of Olympic sponsorship. There was, however, one very visible instance prompting the restriction of unofficial Olympic advertisers.

It’s 1996. The modern Olympic Games is celebrating its 100th anniversary in Atlanta. Reebok was the official sponsor in the apparel category, having paid the $50 million rights fee. Nike didn’t let that stop the brand from involvement in the first American Games since ‘84; it opened a “Nike Centre” beside the athlete’s village, it distributed “swoosh” flags to fans, and most importantly, sprinter Michael Johnson used and displayed his $30,000 gold Nikes. Beyond diluting the power of Reebok’s sponsorship, it was also a blatant display indicating the IOC and LOC couldn’t protect the brands paying to be onsite. Olympic officials didn’t react favorably to this situation, culminating in the following by-law addition:

 

Source: International Olympic Committee, Olympic Charter

 

A modification to the original Rule 40 by-law addition went into effect for the 2016 Games in Rio. That modification allowed non-Olympic sponsors (IOC, LOC) to use athletes in their advertising pre-, post- and during the Games. Forbes describes the amendment to include:

“A relaxation of an aspect of Rule 40 now allows for companies who have an ongoing contract with an Olympic athlete who are not official sponsors to get a waiver to use the athlete in their advertising, provided that a campaign featuring the athlete starts at least four months before the Olympics and runs continuously.”

As a result of this amendment, brands will not be able to use Olympic-related logos, images/film or verbiage, but can feature sponsored athletes in their ads during the Games. Brands from all sectors rushed to take advantage, including General Mills, Gatorade, Adidas, Red Bull, Asics, Speedo, Johnson and Johnson, Mondelez International and Skechers applying for Rule 40 waivers for the 2016 Olympics. 

Even with this relaxation, Rule 40 faces harsh criticism. In Germany, the Federal Cartel Office has filed suit against the German Olympic Sports Federation (DOSB) for a potential violation of open competition law. NOCs are charged with overseeing the waiver application for usage within their respective countries from the IOC. Since that is the case, this lawsuit also indirectly challenge’s the IOC’s authority over the advertising surrounding the Olympic Games. If DOSB followed a similar timeline to the USOC for PyeongChang waiver filing, the organization likely required submission last summer. The campaigns, according to both USOC and IOC guidance, were required to be live between October 1, 2107 and February 25, 2018.

Prior to the Games, Adweek published a helpful tool for marketers, outlining the types of advertising they could expect to see during the Games. Check out the restrictions on athletes, official sponsors (IOC and LOC) and “other” sponsors (athlete relationshps) here.

 

Olympic sponsorship is a many pronged opportunity, with the key being brands finding the right spot for involvement. Sponsorship in this sphere is an expensive proposition, and before entering, brands should have a very defined idea of what they are looking to gain. Sponsors should also be very much prepared to spend beyond the sponsorship contract to promote success.

Photo credit: Vytautas Dranginis

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