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An alternative for advertisers looking to leverage the Olympic Games over the next five years could be to side-step the five rings and associate themselves with Olympic values and the spirit of celebration, Arvind Hickman writes.
Whether it's Cathy Freeman dragging the hopes of a nation for 400 metres around a running track, Ian Thorpe smashing American hopes in the pool or Steven Bradbury watching all of his competitors fall by the wayside as he glides to gold – there's little doubt the Olympic Games holds a special place in the Australian psyche.
As FIFA mires from one controversy to another, the Olympic movement continues to inspire magical moments on the sporting field, and plenty of commercial success off it.
For many brands, being associated with the Olympic values and movement is perceived as marketing gold. But in reality Olympic sponsorship is fraught with risk and needs to be carefully planned and managed to ensure brands get any sort of return on a significant multi-million dollar investment.
There is little doubt that the Olympics is hot property, but experts AdNews spoke with believe advertising during the Olympics’ broadcast, rather than being a fully-fledged partner, can often be a better solution for companies looking to get the best bang for their buck.
“From our research, the Australian Olympic Team is probably the most powerful team in Australia in terms of consumer equity – its awareness, likeability and the image that goes around it makes it a very strong proposition. It's also very galvanising,” Gemba director and CEO Rob Mills said. Adding to that, the Australian cricket team and Socceroos are next on his list.
This broad appeal translates into record sponsorship revenue for the Australian Olympic Committee, which controls the Olympic rights in Australia and also funds the Australian team.
“We're seeing an ever-increasing trend for sponsorship and support for using an association with the Australian Olympic Team and the Olympic movement, not just here in Australia but globally,” Damien Moston, VP of brand partnerships at Lagardère Sports and Entertainment, which handles all of the AOC's sponsorship activity, said.
“The program for Rio 2016 is the most successful we've ever had. We've seen significant growth, in fact we are running at around 36 brand partnerships for the Australian Olympic Team. In total commitments we've seen greater than a 25% growth quad-on-quad.”
It's a marathon, not a sprint
It's not just this year's Olympics that are in sight. More than half of the sponsor brands are investing for the long haul, taking out sponsorship packages with the Australian Olympic Team to the PyeongChang 2018 Winter Olympic Games in South Korea and Japan’s Tokyo 2020 Olympic Games.
Buying the rights to use the rings in Australia is estimated to cost anywhere from $250,000 for a lower tier sponsorship package to upwards of $5 million.
The value of the International Olympic Committee's TOP global sponsorship program is more than $1 billion between 11 sponsors, which averages to more than $80 million. Companies take out sponsorship for various reasons, but often it is to align with Olympic values and what the Australian Olympic team represents.
“The AOC would argue the real value is to use the IP and the rings that go with the Olympic Games,” Tony McKay, head of strategy at Team Epic, said.
“It's the most valuable property in sport globally, so you are buying the rights to use those rings to help your brand tell a story about your association with the Olympics.”
Much as all sporting sponsorships are evolving beyond a badging exercise, brands that are seen to have an authentic connection tend to have stronger outcomes over time than ones that are there to just be part of a big event.
McKay said brands can also successfully leverage the Olympics with messages around striving to be the best. For other brands, the focus is on the spirit of celebration and feelgood moments.
“It's always harder for categories like fast food, confectionery and alcohol to build a really compelling Olympics Games story than it is for financial services, automotive and IT,” he said, adding that an exception is Cadbury’s sponsorship of the 2012 London Olympic Games.
“I think we are moving as an industry to a bit more of a regard for authenticity and relevance.”
There are still some gaps around sponsorship that offer potential opportunities for Australian advertisers.
“What surprises us is that as we stand now we haven't got support from the banking sector and the insurance sector. That's the first time since Sydney 2000 at this stage,” Moston revealed.
“Perhaps there's been a lot of change in the industry and a consolidation of the partnerships they are doing. A lot of them are already invested heavily in assets and programs, but we are hopeful we can receive support in that regard.”
Leverage
But securing rights to the rings is only half the equation. The Olympics, unlike any other sports event, has many restrictions in place as it is largely a brand-free event.
Aside from timekeeping and team apparel, there is virtually no branding allowed at the games and sponsor access to athletes is notoriously difficult once they’ve settled into the athletes village.
“The big issue with the Olympics from a sponsor point of view is once the games start you lose the ability to express your brand at the event,” McKay said.
This “lock-out” period means that brands need a carefully planned marketing strategy in the weeks and months leading into the event.
“You’re trying to find a really clear proposition and a bit of white space for a brand to go after – that’s the real key strategic challenge,” Mills said, adding that a lot of people engage with the Olympics late. “Although it’s a four-year cycle and you buy four years’ worth of rights, the reality for most Australians is it’s a 3–4 week proposition – a couple of weeks beforehand and the two weeks of the games.”
The best executions start early and focus on how the brand is contributing to the games, but without sounding boastful. McKay described it as like walking a tightrope.
“Then there’s the other half of the equation, which is the broadcast itself, and another multimillion dollar investment to be able to run ads and in-program branding during Seven’s coverage. There you have the direct connection with the event itself,” he added.
For most sponsors, the theory goes that a brand needs to spend the same again on media around a sports property as on the rights in the first place.
AOC sponsorship and buying a Seven package do not necessarily connect, but all experts agree a TV ad campaign is key to success.
Gemba has researched why brands at the Commonwealth Games connected to an audience compared to those that didn’t and one correlation stood out.
“There was almost a direct correlation with how much you spend leveraging it. It’s just advertising around it, you’ve got to spend big bucks in that four-week window,” Mills said.
The cost of securing an AOC sponsorship and running an Olympic TV advertising campaign, featuring an Olympian or two, can run into the tens of millions. For many brands, a good old fashioned TV campaign can be more cost– effective.
“Do you need to have the rings? For some brands like Coke, it makes sense as its part of their global proposition. For other ones you think you’d just be better off buying the media,” Mills said.
Despite the many challenges, there’s little doubt Olympic sponsorship will continue to be important for brands, the AOC and Australia’s Olympic team.
And while Rio 2016 may break current sponsorship records, Tokyo 2020 is being tipped to be the biggest games for Australia since Sydney 2000. Expect plenty of investment on and off the field between now and then.
Aussie girl power
Australia’s top five most marketable Olympians leading into the Rio Olympic Games are all women, according to Gemba’s Asset Power Ranking list.The ranking tracks the appeal of athletes amongst an Australian audience and is used by brands to assess an althetes fit. The higher an athlete is ranked, the more valuable an athlete’s brand is to an Australian audience.
The list is topped by champion cyclist Anna Meares, who recently became an Optus Olympic ambassador and will star in a series of TV ads. Meares has won two gold medals and is widely regarded as one of the most successful female track cyclists in the history of the sport, famously defeating Britain’s Victoria Pendleton at the London Olympics to claim gold.
Following Meares is Australia’s hurdling queen Sally Pearson, golfer Karrie Webb and Australian Dolphins Swim Team’s Bronte Campbell and Emily Seebohm.
Although Meares tops our Olympians, she is the eighth ranked athlete overall on a list that pits her against global tennis stars such as Roger Federer who is number one.
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