GIVE A THOUGHT TO THE GLOBAL OLYMPIC SPONSORS – ARE THEY GETTING THEIR ROI?

I read an article on sponsors remaining largely silent leading up to the winter Olympics in China, and that got me thinking about the impact politics and negative publicity against rights holder has on brands. 

 

Sponsors spend enormous amounts on rights fees to partner with an event as big as the Olympic Games.  The sponsorship grants them logo use, branding and activation rights to leverage their own brand which could cost as much as the rights fees! And sponsorships are negotiated long term. Then they rely on the rights holders to decide countries, venues, fixtures and so forth.  After all, they are not specialists in running sports events, but rather in managing their own brands, and the sponsorship must work for them as they must answer to their shareholders and stakeholders as to why they are in the sponsorship in the first place!

 

The pandemic brought the planning of the 2020 Olympic games (which took place in 2021) to a grinding halt and sponsors had to pivot quickly.  They had to anticipate how the new reality would impact the live event, if it happened at all, and decide the best way forward to leverage their association and how to achieve an ROI through product sales.  Awareness is one thing but using the opportunity to create sales is another.

 

Many international Olympic sponsors chose to lie low during the 2020 summer Olympics in Japan due to public anti-Olympic sentiment.  Getting on the wrong side of the consumer is tantamount to killing the brand. 

 

Sponsors also had to contend with the new pandemic consumer insights.  Brand loyalty went out the window and trying out new brands became a norm, which smaller brands capitalised on.  But the most important consumer insight pointed to customers wanting brands to directly connect with them.  They wanted personalisation and to know that brands cared for the community – giving back to those that supported them through the years.  Therefore, Olympic sponsors had to pay even more attention to the consumer feeling and listen to the talk.

 

And now we have the Winter Olympics in a country that is well known for allegations of human rights violations, not to mention the questions being asked on their climate change policies, disregard for equality and inclusivity and general disregard of human respect.  For all these reasons many Global Olympic partners and sponsors have opted to keep a low profile, which has opened the door for local Chinese companies to grow their brand awareness.

 

The idea behind China’s hosting of the Olympics was to use the opportunity to promote the country as a tourist destination and promote and inclusive, Green Olympics, hence their slogan ‘faster, higher, stronger, together’.  But I question as to whether the opposite is happening?

 

The opening ceremony was a spectacular affair showing off China’s tech prowess.  The symbolic Olympic flame was specially designed for the first ever futuristic underwater torch relay using gaseous fuel that was smokeless and free of pollution. There can be no doubt China is in the forefront of anything technical.

 

But both Olympic Games were spectator free, so everything went online, and people consumed the Olympics via traditional TV, OTT and CTV (i.e. streaming using various different devices). 

 

Sponsors would have taken to online and TV, but so did every other brand not to mention the publics ad fatigue and the ability to skip the ads. All that sponsorship money and where is the uniqueness?

 

What about the off-the-field activations around the country staging the games, not to mention the fun activation areas at the entrance of each stadium where fans get involved in fun activities that the sponsors normally put on.  This is all part of the fun of a live event such as the Olympic Games.   And this also is where sales are generated, particularly for the FMCG brands such as Coca-Cola.

 

Whether the sponsors got their monies worth in Japan and China is questionable.  I cannot answer for them but having been intricately involved with many of the sponsors over the years at these massive sports events, and travelled the world with them, my heart goes out to their dilemma.

 

When controversy hits a sports body or event, sponsors get dragged it, which is a pity.  They sponsor events in good faith and when they must put the entire PR team onto reputations management to protect the brand, it is not fair.  Yes, brands are aware that things can happen and go wrong, and the PR team is always in the loop, but to be brought in to answer rights holders’ controversy is taking it to another level.

 

My observation over the 30 years that I have been in sponsorship is that there is a lack of foresight many rights holders have on the repercussion of their behaviour on sponsors.  After all, sponsorship is the lifeblood of any sport.  Lack of sponsorship impacts dramatically on any sporting association and the level of event they are able to produce. 

 

My final thought on the matter is that sports associations must bear in mind the impact that the pandemic has had on the bottom line of all companies (small, medium and large corporations), and when sponsorships come up for renewal, if they are not careful, the money could well dwindle somewhat.   I reiterate, sponsors are there to grow their brand and not to look after sporting associations. They have boards and shareholders to answer to!  Never forget!

 

 

THE OLYMPIC GAMES AND THE IMPACT ON PARTNERS AND SPONSORS WITH NO FAN ENGAGEMENT

It’s Olympics time again and millions around the world are enjoying watching a multitude of sports, many of which we only take an interest in every four years. We become armchair experts and hop from channel to channel to consume as much and as many sports as we possibly can. 

 

The exceptional skills displayed by the athletes is mindboggling. Looking at gymnastics, it is hard to believe that bodies can be manipulated to such an extent!

 

But it is a very different Olympic Games this year. There are no crowds and no fan parks. We never realised how important these elements are to the overall excitement of the entire Olympic package until they were not there. The usual full month of sport has also been condensed into a mere two weeks this time.

 

The statistics point to a decline in interest in the Olympics this year, although the Millenials and GenZs have shown more interest as the games have progressed. 

 

One must spare a thought for the sponsors who have invested millions of dollars to partner with the Olympics. There are no crowds to help them achieve that all important return on investment (ROI) via sales. Not to mention that there are no sales of the replica clothing that is synonymous with large international sporting events.  The full impact of Covid-19 on the Games will only be known in the months to come.   

 

But it is the sports rights holders that this blog is going to focus on.

 

Creating fan engagement is critical for rights holders, no matter what the platform, be it linear TV, CTV or on the different digital platforms available. Fan engagement leads to brand awareness, brand love and it ultimately create sales. How to effectively grab the attention of the fans is no easy task at the best of times, especially with new forms of entertainment joining the clutter every day. And which media or social media platform to use and how to use these also need a carefully crafted strategy to reach the desired target audience.

 

It’s in situations like this, regarded as a crisis, when creativity becomes critical and PR agencies are needed to provide the creative story-telling ability to help position brands.  PR is needed in the marketing mix more now than even ever before.

 

Guidelines on how sponsors can utilise the Olympic logo and how they can associate with the games is strictly regulated. Purchasing the rights is one thing, being able to leverage the rights is quite another matter, which pushes up the costs exponentially. Olympic brands have been tested to the hilt and must expand budgets even further to be heard and create that much needed awareness.

 

The pandemic hasn’t been kind to brands as many have taken massive knocks in sales creating a vacuum, and now they must spend more to leverage their sporting associations in a time when most brands have changed strategies linking sponsorships to sales as opposed to brand identity and awareness.

 

One way to possibly have helped sponsors achieve a higher ROI in this unique situation could have been, allowing some form of in-stadium branding. After all, live exposure is how the games are primarily consumed and incidental branding for sponsors might have been a good compromise.  Once the excitement has died down highlights and short inserts will be shared for years to come on all platforms, whether on YouTube, TikTok, Facebook, Instagram and all others.  The newest data from the Maru Group pointed to fans between the ages of 18 and 34 prefer to watch highlights as opposed to hours of watching live.  Could brands benefitted from this?

 

With the rising popularity of the new digital viewing experience, brands can hopefully make use of Olympic footage and put their own visuals together with a direct link to brand messaging. There have been many brands that have taken ideas from the sports that they sponsor and put an omnichannel catchy and creative video together driving product.

 

The need to belong has emerged out of the pandemic and brands need to show they care.  In fact consumers actively seek out products that they perceive as caring for the community.  Utilising the Olympics in a visual and fund post Olympics campaign would go down well amongst the consumers.

 

And what about replica clothing and other goods?  I have attended international events and even a hardcore PR lady like myself with years of travel behind me have frequented many shops that stock replica goods and have spent a fortune purchasing for myself and my entire vast extended family. Companies have to pay a fee to be able to produce replica goods and it will be interesting to see the statistics come from the 2020 Tokyo Olympics.

 

It is up to the Olympic sponsors to find that element and then creatively package it into a valuable original content driver to tell their own unique story in a way only their brand can.  It could even be a look behind the scenes, taking a closer look at athletes, training or even asking fans to show how they are consuming the Olympics in their own special way.

 

Sponsors can capitalise on the Olympics by allowing it to live far beyond its live 2 weeks.  However, the feeling of many brand managers is to cut off immediately after the event

 

Looking at recent stats put out by Deloitte show that fans are very interested to be kept up to date during ‘off-seasons” (albeit this is not based on the Olympics)

 

● 65 percent of fans say they want some form of content or information at least monthly during the off-season.

● More than 60 percent of fans say a great “year-round experience” would make them more likely to be more engaged with the team in the coming season.

● 55 percent say it would make them more likely to purchase a ticket in the future.

 

Time will tell how sponsors will utilise their Olympic association.  We have seen some great ads coming out in the UK, let’s keep tracking.

 

 

Neil Tovey Talks about South Africa's chances at the Olympics

 

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