A plethora of networks, platforms, channels and media have thrown into disarray traditional notions of what constitutes a market. Few truly global means of communicating on such a scale remain. But the Olympics is one of them.
The question lingers, however, as to what that means in this highly attenuated age. Waiting to read about results in tomorrow's newspaper seems almost unimaginable. Even television, with time delays and fragmentary coverage seems incomplete. So how, then, to calculate the value of an Olympic sponsorship?
It turns out that corporate sponsorships have continued to steadily increase despite these concerns. Marketing research suggests that cementing a relationship with customers across time zones and cultures is worth the expense and effort - for some. In part because the 'market' is not just measured in terms of end users, but also in terms of one's supply and value chain, one's global staff of employees and one's ability to cut through the clutter to establish a positive reputation in relationship to an event that maintains strong ratings. It is not, however, clear that this works for everyone. Ambush marketers and those attempting to grab a bit of Olympic glory without the budget or wherewithal to push the message through may be generating less than optimal impact. But for those with the ability to capitalize on the investment, the rarity of truly global associations that need no translation remain invaluable. JL
The Financial Times reports:
It trumped the crisis in the eurozone and volatility in commodity prices: when a senior executive at one of the UK’s largest companies was asked recently to identify the biggest risk facing his organisation in the coming months, he said simply “the fact that one of our rivals is sponsoring the Olympics”.
Rohit Deshpande, professor of marketing at Harvard Business School, believes large multinationals are right to sense danger. “There are only a limited number of global eyeball opportunities in a year, and the Olympics is the mother and father of them,” he says. “Global companies cannot afford to miss these opportunities; if you lose out in the bidding, it’s the worst possible scenario." For many multinationals the draw of the Olympics lies in its global reach.
Dow Chemical says the emerging market locations of future games – Sochi’s winter games and Nanjing’s youth games in 2014, and the Rio de Janeiro Olympics in 2016 – was one of the main reasons it signed up as a sponsor for 10 years from 2010.
Long-term sponsor Coca-Cola says the breadth of the Olympic movement continues to make the partnership a worthwhile investment. It said the 2008 Beijing games enabled the company to “connect” with half a billion Chinese consumers.
The sponsorship bidding can go high. The London 2012 organising committee has raised £700m from 44 domestic sponsors. Separately, the International Olympic Committee has 11 international sponsors, each of whom pay $80m-$100m for an Olympic four-year cycle which covers one winter and one summer games.
But Nirmalya Kumar, professor of marketing at London Business School, says the best option for rivals is simply to let the sponsor get on with it. “What they should do is keep quiet. Even if your response is very ingenious, you still have to ask yourself whether it is worth the time and effort. It’s a two-week event, it will soon be over, and it doesn’t define anyone forever. But managers won’t do that, they tend to be very competitive.”
One option is to be very visible around the games. In the professional services sector, Deloitte is the London sponsor, but KPMG will not be entirely eclipsed. Thanks to a three-year sponsorship deal struck last year, its logo adorns the Thames Clippers ferry service, giving the brand visibility in the heart of the city (without getting caught in Olympic traffic jams).
Similarly, while Lloyds Banking Group is an Olympic sponsor through its Lloyds TSB brand, the network of “Barclays bikes” – bright blue branded bicycles available for hire all over the capital, including near the Olympic park in east London – ensure a high-profile presence for the rival bank.
Sponsoring other events is an alternative. Adecco is sponsoring the London Olympics, but Mark Bull, chief executive of UK and Middle East operations at rival Randstad says his organisation’s sponsorship of the Williams F1 team since 2006 works well for a recruitment business because of the emphasis on teamwork and expertise. “Formula One is the most-watched TV sport in the world,” he says.
Equally, Royal Bank of Scotland is sponsoring non-Olympic sporting highlights this summer, including two international cricket series through its NatWest brand.
Tata Steel Europe has taken a different direction, sponsoring a big chess tournament in the Netherlands each year.
Mr Kumar at LBS says another idea is to link with a national team. “For example, if one of your key markets is Australia, then you might sponsor the swimming team,” he says. “You may not be anywhere in London, but in your chosen market you will be associated with the Olympics.”
Companies across various sectors – from confectionery to energy – seem to have heeded similar advice: Tata, for example, also sponsors Britain’s triathletes.
But not all companies have to address this issue head-on. EasyJet, for example, sounds relaxed about British Airways’ role as an Official Olympic Partner. “The flag carriers tend to feel obliged to do it,” it says, arguing that the Olympic logo can seem just like a badging exercise. Not that that has stopped EasyJet from turning to 1982 gold-medal hurdler Sally Gunnell to promote its operations at Southend airport, including through a press trip to Barcelona, the scene of her victory.
Polycom, the video conferencing group, is another company that does not feel the need to respond directly. Its view is that while the Olympics represents a big brand push for Cisco, sponsorship says little about what it actually does. Polycom itself is using the prospect of disruption from the London games to talk to customers about home-working and video conferencing.
Tui Travel, whose rival Thomas Cook is a sponsor, insists that the question of sponsorship scarcely registers. Given Thomas Cook’s financial travails and the negative associations that may come from public anger over access to tickets, “it’s simply not an issue”, says one Tui insider.
While Harvard’s Mr Deshpande is clear that international exposure really matters to global companies, he warns that smaller businesses can easily waste their money.
“Sometimes marketing people will try to convince a chief financial officer that it is worth paying up because, ‘This is our time to shine – if we advertise in the Olympics, people will think we’re in the same category as the big boys and that will really boost us’,” he says.
“But there’s a wealth of research that suggests no one remembers the little companies at such big events.”
0 comments:
Post a Comment