London 2012 Olympic Sponsorship: The Impact on Games and Athletes
As the clock ticks towards London 2012, brands are upping the ante to become as globally visible as possible to consumers, writes Grainne Rothery.
As the opening ceremony for London 2012 edges closer, the €4.5bn battle for the hearts and minds of consumers is set to be cranked up a few notches as the official sponsors of the Games – and no doubt a few gatecrashers to the party – jostle for position.
A recent analysis by consultancy company Onside Sponsorship reveals that Irish consumers could potentially receive Olympic-branded communications from more than 65 brands during the Games run-up. This comprises official Team Ireland sponsors, global Olympic partners, the athletes’ endorsements, and participating governing bodies’ official sponsors. Add to this official UK-only London 2012 sponsors, which Irish consumers will be exposed to through UK media, particularly television.
While the International Olympic Committee doesn’t reveal the exact cost of being one of the 11 worldwide Olympic partners, it’s understood that those top-tier sponsors – which include Coca-Cola, P&G, McDonald’s, and Visa – pay around US$100m each for a four-year deal that gives them exclusive global marketing rights within their service or product category.
On top of this comes the cost of activation. According to John Trainor, managing director of Onside Sponsorship, the industry norm is around 1.75:1 for activation to rates.
“Clearly they’ve got a really solid business case around why they engage in the Olympics,” he says, adding that brands often cite an expectation of up to US$800m return on that investment. “So from a business perspective, they’ve clearly done their homework in terms of the value this can deliver for the brand and the payback they’re going to get.
“It reflects a growing movement by brands and sponsors to increase the proportion of the total marketing pie that they’re investing in sponsorship. It’s getting to a point for many of these major global brands that anywhere from 25pc to 40pc of their total marketing budget is being invested in this.”
Trainor believes this trend is driven by organizations that see consumers as being particularly favorably disposed towards sponsorship and being very receptive to it. “So from a brand affinity and a brand equity building situation, it works. And I think increasingly they’re now able to prove that it works in terms of the evaluation tools and mechanics they can put in place to prove it works.
“Beyond the brand equity scores building that it achieves for them, I think it also helps them in many cases to prove commercial outcomes that it delivers, so they can confidently see the influence it actually has on sales. As that level of intelligence continues to grow, it gives them greater confidence to spend at these mass levels.”
In addition to the 11 worldwide partners, the London 2012 organising committee (LOCOG) and the national organising committees (NOCs) also get to sign up their own partners. For Trainor, brands that have stood out in terms of activating their sponsorship in the Irish market include Cadbury and Team Ireland.
Cadbury is a tier two partner of London 2012 and is also a Team Ireland sponsor. “Cadbury has been standout, both in terms of weight and duration,” says Trainor. “Essentially, they kicked their Games off well over 12 months ago with their Spots and Stripes campaign. They were really first out of the blocks and on that logic would be one of the key players.
“Procter & Gamble equally have definitely made their intentions very clear and have been early in their activation and their use of their rights in their mainstream marketing communications.
“In terms of brands that bought rights purely at a national level, Electric Ireland has definitely demonstrated a degree or level to the cause that does make it pretty strong and visible,” he says.
The brand that is yet to be revealed as the sponsor of RT�’s broadcast coverage of the Games will be one to watch, Trainor believes. “My understanding is that it’s one of the sponsors at the top level and if that is the reality, I think they’re the ones to beat,” he says.
“There are various stages to winning this whole event from a sponsor’s perspective. Some have already managed to get a head start in some of the work they’ve done. But ultimately, it’s going to be July when the real battle will be won. When we get to that point everybody’s going to have their full voice on. At that point, what’s going to help differentiate them from each other will be familiarity and frequency like the broadcast sponsorship will deliver.”
Recent research by Onside Sponsorship reveals that three out of four Irish adults are interested in the upcoming Games, while 36pc are ‘very interested’. The company also asked consumers to name the brands associated with the Games that they find appealing. “The number one brand that stood out was Coca-Cola,” says Trainor. “The general public is seeing what Coke is doing and liking it.
“As a practitioner and as a consumer myself, I think their London 2012 campaign is standout. It will undoubtedly be held up for the next 12 months by the marketing industry as a best practice example of a brand taking a sponsorship at that level and completely optimising its potential, and using it in a fresh and unique way that is incredibly grounded in understanding the consumer, the event and its brand and linking those three together to create something that will be standout once the Games are done.
“With great clarity and simplicity, Coca-Cola has identified what it is uniquely about London and the Olympics that is relevant to its target consumers. It’s managed to marry music and London and the Olympics and the triangle between the three of those to create a campaign that ultimately taps into the sounds of the Olympics this summer and. to a certain extent, allows the brand to uniquely associate itself with that sensory dimension to the Olympics which will be the sound.
“The sound of London 2012 will be inextricably linked with Coca-Cola. It’s pretty innovative and it’s the quality to which they’ve executed that idea and understood how to do it that I think is revolutionary.”
The No 2 brand in Onside’s research was McDonald’s, followed in equal third place by Nike and Adidas. It’s notable that Nike has no official association with the Games.
“It’s the same battle that we’ll find when the soccer World Cup kicks into town in two years’ time,” says Trainor. “The consumer generally associates sectors or categories with certain sporting events before they’ll necessarily associate it with a specific brand. I’m not sure what would be required by one to have such an incredible piece of standout activity that they would dramatically alter that reality.
“When we asked the general public in Ireland to name a sponsor of the London Olympics, 30pc of people named one. Interestingly, 75pc of those correctly named one of the official partners, which is pretty high. Twenty-five percent were naming team sponsors or other brands that were incorrect, such as Nike. To me that reflects well on the effectiveness of the event to protect the partners that are officially sponsors. We often get up to 50pc of people associating wrong brands with events.
“So, London 2012, while it will have a lot of brands associated with it, will still potentially outperform other sporting events in terms of the connections it’s managing to create for its 0fficial sponsors.”
There are currently 11 worldwide Olympic sponsors, known as TOP (The Olympic Partners) companies: Coca-Cola, Acer, Atos, Dow, GE, McDonald’s, Omega, Panasonic, Procter and Gamble, Samsung and Visa.
The TOP programme, which is managed by the International Olympic Committee, operates on a four-year term, with the current period running from 2009 to 2012 and covering the Vancouver 2010 and London 2012 Games. According to the IOC, the partners in the current quadrennium (the seventh since the programme began) will between them contribute US$957m to the Games and the Olympic Movement in the form of money, products, services, technology, expertise, and personnel deployment.
Each partner is given exclusive global marketing rights and opportunities within their own product or service category.
In addition to the worldwide partners, the organising committees of the Games have their own partners. London 2012 has pulled in �700m through deals with 44 domestic sponsors.
It has seven domestic tier-one partners – Adidas, BMW, BP, British Airways, BT, EDF and Lloyds TSB. In addition, there are seven domestic tier two supporters – Adecco, ArcelorMittal, Cadbury, Cisco, Deloitte, Thomas Cook, and UPS.
Finally, it has 28 domestic tier-three suppliers and providers – Aggreko, Airwave, Atkins, Boston Consulting Group, CBS Outdoor, Crystal CG, Eurostar, Freshfields Bruckhaus Deringer LLP, G4S, GSK, Gymnova, Heathrow Airport, Heineken UK, Holiday Inn, John Lewis, McCann Worldgroup, Mondo, Nature Valley, Next, Nielsen, Populous, Rapiscan Systems, Rio Tinto, Technogym, Thames Water, Ticketmaster, Trebor, and Westfield.
Sainsbury’s is the sole tier one Paralympic Games-only partner, while Otto Bock is the only tier three Paralympic Games-only supplier.
Meanwhile, Team Ireland’s sponsors are Aer Lingus, Electric Ireland, Kia, Mater Private, The Irish Sports Council, Cadbury, Irishjobs.ie, Larry Benedict, Newbridge Silverware, and Asics.