Hoffman Hong Kong’s Caroline Reynon takes a look at the high stakes of sponsorship at the 2008 Summer Olympics in Beijing (Click here to see article.)
In terms of sheer size and global recognition, the Olympics is, by far, one of the biggest and most lucrative sporting events in the world. Its ability to command the focus of the media and the attention of the entire world is incomparable.
With such influence, the Olympics has become more than just a grand congregation of athletes from all over the world. It has been virtually transformed from a venue of friendly sports competition into a major marketing spectacle.
Companies have realized the brand value of the Olympics and they have been attracted by its strong marketing power. During the past three Olympic quadrennials, marketing revenue generated by the International Olympic Committee has been on a steady increase.
But never has the attraction to be associated with the Olympics been so great as when Beijing was selected as Olympic host. The motivation for sponsorship in the Beijing Olympics goes far beyond linking one’s organization with the Olympics brand and the ideals it promotes, such as excellence and victory. What drives organizations to tie up with the upcoming Olympics is the opportunity to strengthen their presence in the China market.
Sponsors are hoping to leverage the marketing exposure they have in Beijing to further establish their brands in China. Because all eyes will be on the Olympics come August, the event provides a rare but very important venue for companies to quickly get their message across the country’s vast consumer market.
At the Top of the List
Getting such a significant amount of coverage, though, comes at a very high price. Just ask Coca-Cola, McDonald’s or Samsung, to name a few of the 11 brands that each paid several million dollars to become a member of the elite TOP (The Olympic Partners) program for the Beijing Olympics.
TOP is the crème de la crème of Olympics partnership. Agreements under the TOP program are for four years, including one Olympics Winter Games and one Olympics Summer Games. Companies, in return, are granted exclusive global marketing rights, including the use of all Olympic imagery.
Just how much money do TOP program members spend? Well, for the four years ending this August, sponsors have each paid US$866 million in cash and “value-in-kind” goods and services for the right to associate their names with the Olympics.
Other Options
For those companies with smaller marketing budgets, there are other sponsorship categories to consider, including the OCOG (Organizing Committee for the Olympic Games) sponsorship, which gives the sponsor Olympic marketing rights within the host country or territory only.
Another type of sponsorship is the NOC (National Olympic Committee) program. It is managed by local Olympic Committees that support their country’s sports development and national Olympic teams. These programs grant marketing rights within the NOC country or territory only. The U.S. Olympic Team, for instance, is being sponsored by AT&T, Bank of America, General Motors, The Home Depot and Anheuser-Busch this year.
If sponsorship is not in the cards for your company, then you can apply as an Olympics supplier or look at various licensing options available.
The Indirect Route
Becoming a top partner, sponsor or supplier for the Olympics requires some licensing fees. For companies that do not want to take a direct Olympics marketing approach, there are other indirect ways of associating their campaigns with the event.
One such unique initiative is the Virtual Plus Reality Challenge, which was created by Dassault Systemes, a longtime client of The Hoffman Agency. The Virtual Plus Reality Challenge, in partnership with Sports Without Borders, is a five-month charity run covering more than 6,000 miles (10,000 kilometers). The company is sponsoring seasoned marathon runner Philippe Fuchs, who is attempting the ambitious run, that starts in Paris and ends in Beijing in time for the Summer Olympics in August.
What makes the Virtual Plus Reality Challenge a one-of-a-kind race is not only the fact that it is an unprecedented event but also that it incorporates some of Dassault Systemes’ 3-D solutions. The company has developed a dedicated Web site that allows Fuchs’ supporters to monitor his progress. Equipped with many advanced 3-D functions, the Web site lets Internet users check Philippe’s real-time position via a geolocation interface based on phone or satellite communications, monitor his biometric data and watch video commentary on his cardiac performance. Fuchs also gives multimedia updates via his 3-D avatar and Dassault Systemes’ online TVnima broadcast application.
On top of Fuchs’ Paris-Beijing run, Dassault Systemes has also introduced a virtual team relay in support of Sports Without Borders, which runs from March to August this year. The virtual marathon is open to individuals around the globe and is made possible via an innovative viral application developed by Dassault Systemes on Facebook. Internet users who want to participate in the game can upload their personal photos onto Facebook, which will generate each participant’s 3-D avatar. Virtual runners can also select a virtual running environment from a photo library of more than 100 images. They can invite Facebook friends to participate in the race as well. Each group of friends that joins gets to see a video of their virtual runs. At the end of the race, Dassault Systemes will feature the longest and funniest videos, in a Virtual Relay Hall of Fame, which will be set up on a dedicated Web site.
Another Hoffman client, Irdeto, has taken a more low-key PR strategy focused on mobile TV, which will make its debut in China during the Olympics. The company has focused its efforts on developing key marketing messages that will highlight its expertise in mobile TV protection, and in actively pitching to the media story ideas related to mobile TV.
The Finish Line
The stakes are high for any company that decides to invest in the Beijing Olympics campaign, but the payoff for those who dare can be even greater. As the world’s fastest growing economy, China is expected to be home to a large middle class with significant spending power by 2025.
While they know that the Beijing Games will not give them back their investments immediately, companies are looking at the long-term potential. The Olympic Games in Beijing set the stage for companies to influence the Chinese market, and they are hoping that once the country’s consumers get a taste of foreign brands, the appetite for those brands could be insatiable … and that’s when they’ll know their efforts have been properly rewarded.
