Commentary

Sponsoring Controversy?

The Olympic movement is the event sponsorship granddaddy of them all. With an audience totaling billions around the world, with a sponsorship entry ticket in the monetary stratosphere and licensing and merchandising among the official sponsors taking just about every form known to man, the Olympics is now more about the media and the marketing than the events themselves.

Sure, millions of us tune in to watch our favored sports and root for national teams, athletes and determined underdogs, but we are merely bystanders to the main event.; the money-fest that can make or break local economies, supercharge brands in emerging markets and drive year-on-year sales through clever and aggressive promotions. We are the currency that is sold to sponsors around the world in more or (generally) less scientific ways.

Now in a normal Olympic year, it is the event itself and the wall-to-wall coverage of it that sponsors will typically be associated with. Stand out is achieved through the sheer weight of promotional messaging, relevance to a specific audience or the inventiveness of the sponsors concerned. Some sponsors always disappear in the clutter and others have a narrow but high value audience -- either geographically based or within their own particular business sector, so the mass market is not that important to them. These are in the minority, but the Olympics can still work for them if properly exploited.

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After all, the huge sums of money paid to the IOC for the privilege of becoming an official global sponsor of the games is nothing more than the green light to spend millions more in order to generate a return on the initial investment. Un-leveraged, the basic sponsorship fee just leaves an embarrassing stain on the balance sheet.

So, if in a normal Olympic year, sponsors associate themselves with and leverage the Olympic movement, the competition and the sheer spectacle of the largest single sporting event on earth, just what are they getting in '08?

Following the IOC's questionable decision to award the event to Beijing, there is a good chance that advertisers will get rather more for their money.

While it's a pretty safe bet that sponsors of the event will be well regarded in China itself, other markets may be more ambivalent about the association. Of course, the Chinese market is so huge and important to many brands that the strategic benefits of success in China could outweigh any fallout elsewhere. It's also possible that the bulk of sponsorship leverage could take place in China and other markets where attitudes to the host country are less hostile.

However, even if such an approach was deemed to be viable for any sponsor, it certainly would not work for many. Plans for leveraging the event on a global basis have long since been put in place, creative developed, media bought and contracts signed. Even if a sponsor was starting to become concerned by the level of protest and controversy brewing around the event, it's almost certainly too late to do much about it other than review the damage-limitation strategy and any scenario planning that has been put in place to date.

All this assumes, of course, that the average consumer genuinely cares that much about whatever he or she perceives goes on in China --those perceptions of course being fed by media coverage.

Aside from the small but passionate group within the population that is informed and vocal on the various issues behind the controversy, I fear that the combination of complacency, ignorance and apathy will render the majority of populations across the world's developed markets unmoved by stories of human rights abuses, environmental disaster and so on -- certainly in any long-term sense and almost certainly in any way that will negatively impact a sponsoring brand.

Interestingly, I stumbled across a piece in AdAge China today about a study of 500 Americans (conducted by Lightspeed Research) that finds 85% don't think politics has any place in the games (nice idea, but I feel that became a fantasy many years ago) and 82% feel Olympic sponsors ought not to be boycotted. Interestingly, only 7% expected Olympic sponsors to be positively impacted by the association and 48% expected a negative impact.

The Chinese, on the other hand, are already demonstrating a somewhat different view, with calls already emanating for consumer boycotts of French goods following from the protests around the Olympic torch relay in Paris. Watch this space.

But in Western markets, if any sponsors are at risk, then perhaps it's the broadcast sponsors that should feel most vulnerable. Here in the U.S., it's a pretty safe bet that NBC won't be running too many documentaries about human rights abuses and the like in China, though even on the U.S. host network, public protests will undoubtedly make it onto the news one way or the other.

It may be a different story on other networks however. Why wouldn't CNN, CBS, ABC or Fox run topical stories on these subjects? BBC America has already been running some extended news pieces that are pretty compelling on life in China (by no means all negative, just informative). And can't you just see Anderson Cooper giving the 360 treatment to "Behind the Olympics: The Other Side of China" (and at least trying to "keep them honest" - perhaps a tall order in China)? With newspapers, magazines and the Web also in the mix, who knows what overall impression is going to be left in the collective consciousness even without any particularly striking form of protest or unrest (and with Tibet continuing to simmer along with no prospect of resolution in sight, it's a pretty safe bet that there will be something happening). The simple -- and highly publicized -- question of how many world leaders will feel bound to be elsewhere at the opening ceremonies will in itself cause a ripple across the media. Although an apparently minor statement in Western terms, to the Chinese this represents a major affront and as a result pressure is brought to bear on trade deals. Not something many of the Western sponsors will be comfortable with.

The average consumer with an interest in the Olympics will almost certainly therefore have a different array of Olympic-related stimulus to absorb and assimilate. Instead of the contextual stories being merely about the athletes and the enormity of the event, it's a pretty safe bet that there will be plenty more that the Chinese government (and the IOC for that matter) would really prefer we didn't talk about.

Only time will tell just how big an issues this turns out to be for the 2008 Olympic sponsors -- but it is unlikely to end with the Olympic torch relay. I hope that someone is doing some independent tracking studies that will see the light of day so we can find out whether or not the fallout is meaningful. For my part, I doubt that it will be.

In the meantime, I can't help detect a certain irony in the fact that some of the world's largest advertisers have now become incredibly sensitive to being seen to align themselves with content or media defined as "prurient" by moralist pressure groups and have pulled back from advertising in media targeting the gay and lesbian community on the same basis. I guess for now at least, questionable human rights practices are regarded as safer territory than T&A and gay marriage. Regrettably (and from a commercial perspective, at least), that just may prove to be the case.

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