How relevant are the Olympic Games to UK consumers? This is the question facing the marketing teams at the UK offices of each of the sponsors of the International Olympic Committee's (IOC) The Olympic Programme (TOP), but only a few will be allowed significant freedom to discover the answer.
The decision to pay between £20m and £40m to sponsor a global sporting event such as the Olympics, Euro 2004 or the World Cup, very quickly becomes a test of the relationship between global strategy and local implementation.
The price of a ticket to sports marketing's top table comes with a promise of vast media audiences at a set time and place. As brands search for their audience against a backdrop of media fragmentation, multi-channel television and advertisement avoidance via personal video recorders, this is something other forms of advertising struggle to match.
This ability to generate mass audiences has meant the price of becoming a global player has maintained its value, bucking the general trend of sports sponsorship. Major event rights holders, such as the IOC and UEFA, are striving to generate greater revenue from a growing list of sponsors.
This has been achieved through increasing the size of the global footprint of events by opening up new territories to the sport in question and thus adding value to commercial partners' investment.
UEFA puts the number of countries taking TV coverage of Euro 2004 at about 200, which is evidence of the emergence of the tournament as a genuinely global showcase. It also puts emphasis on sponsors to ensure the property has a resonance in each of its core markets, thus avoiding waste.
So for multinationals, global sport sponsorship can appear a snip, offering the chance to hit each territory with a consistent message, associate the brand with the excitement of sport and spread the cost of the rights fee across local markets. What, then, can go wrong? Plenty, according to Cameron Day of sponsorship consultancy The Works. 'This summer more money has been spent on marketing through sport than ever,' he says. 'The majority is wasted because sponsors fail to make relevant sales connections with consumers. Those who buy an association with the biggest property of all, the Olympics, are most likely to fail. Such a global event is, by its nature, remote and sponsors rarely make provision for marketing teams at national level, who understand their customers best.'
Nick Walford, managing director of WPP's Performance Sport Entertainment agency, explains that creating a sense of ownership at a local level is the way to achieve return on investment. 'Problems arise when head office decides on the sponsorship of a major property without the buy-in of key markets,' he says. 'This means local teams feel obliged to support a property for which they do not see a brand or business benefit.'
Vodafone's outgoing head of global marketing, David Haines, has used sport as a global branding tool throughout the company's period of international growth. In the past two years, Vodafone has substantially reduced its expenditure on local partnerships in favour of big deals with Ferrari F1, Manchester United and David Beckham. 'When they are amortised globally, they become better value for everyone,' he says.
'We'd rather have a strategic review with all our companies in various markets focused on what our business needs are and what we want to become involved with', he adds. Haines is also clear about the role of marketing departments on the ground. 'We have a strategic framework laying out general themes, but how it is organised locally is up to them,' he says.
The issue of how to make sponsorship fit with local needs is met head-on by the UK marketing team of Visa, a TOP partner since 1986. Visa has a complex audience, based on regional boards representing the 21,000 member banks that collectively own it. Gaining their consensus is key, says Antonella Socci, head of sponsorship at Visa Europe. 'We cannot talk directly to card holders, so our network of member banks is critical to success of a sponsorship. We don't launch activities where we don't get buy-in because if they are not going to use it we will not get sufficient return on our investment,' she says. 'By the time we signed with the IOC we had sought the agreement of the regional boards. This meant they had acknowledged it was something they wanted to be associated with on a commercial level.'
Xerox has sponsored every Olympics since 1964, a relationship that will come to an end in Athens. In the UK, the company's advertising has been limited to two press ads, handled by Harrison Troughton Wunderman, with much of its PR focused on the technical press. David Millican, head of corporate communications, says the company is using its relationship with the Games as a basis for staff incentives within Xerox UK. To ensure a local flavour, the company has employed Olympic gold medal winner and BBC pundit Sally Gunnell as a keynote speaker at sales conferences. She has also contributed to recent product launches. 'It's easy to get a link from Sally to our sponsorship of the Olympics,' says Millican. 'Customers and our internal audience can see how our equipment supports the running of the event and the teams.'
Xerox's use of personal endorsement mirrors the approach of other TOP sponsors in the UK. A brand's association with British Olympians can act as a shorthand for communicating the relevance of the Olympics to consumers.
Samsung is using sprinter Darren Campbell to spearhead its UK involvement.
Visa has created Team Visa, featuring five-time gold medallist Sir Steve Redgrave as its UK brand ambassador.
A lack of star quality in the current British Olympic Team is a problem for marketers striving to find a successful and contemporary public face for the brand. Compare their options with those of football sponsors and the host of easily identifiable stars, such as David Beckham or Wayne Rooney.
This points to a wider issue about the Olympics as a commercial vehicle.
'Sports such as athletics and shooting pale into insignificance compared with the interest in the England football team,' says Day at The Works.
'That, coupled with a lack of recognisable UK Olympic personalities, will prove a great challenge to capturing the hearts and minds of the UK public.' He believes this translates into a need for hard graft and creativity for marketing teams. 'Cutting and pasting logos and straplines into sporting arenas and onto merchandise does not make a compulsive connection for consumers,' he says.
Day's accusation that there is a lack of passion for the Games is disputed by Visa's Socci. 'There are 28 sports providing something for everyone,' she says. 'The passion for the Olympics, when the event is on, is stronger than for football.'
This point is underlined by Peter Walshe, global account director of research agency Millward Brown, whose findings show the Olympics still has a hold over the general public. 'Along with the London Marathon, it is perceived to be the most socially responsible event,' he says. 'It has enormous potential for the right brands, but the fit is important. Just putting a brand alongside the Olympics will not ensure the personality or image sticks.' He adds that a poor fit will only highlight how the brand falls short of the Olympic values.
On a more practical level, Socci points out that Visa's investment does not rest on anything as fickle as Beckham's form or Rooney's ankle. 'If we are knocked out of an event, there are still 27 opportunities to be had - remember the deflation of Euro 2004.' If she's right, Socci has identified the value limit of national sporting passion: they only spend when they're winning.
UK consumers' image of key sporting events
True to spirit Exciting to Can unite
of sport (%) watch (%) nation (%)
The Olympic Games 58 57 67
Six Nations Rugby 52 54 59
London Marathon 49 16 16
British Grand Prix 21 44 16
Euro Football Championship 15 41 44
CASE STUDY - THINK LOCAL, ACT LOCAL
Coca-Cola's UK marketing team has taken local control of global strategy by supporting its investment in major worldwide football events with substantial commitment to the game in Britain.
Coke is active at all levels of the sponsorship market, from being an official partner at the World Cup and Euro 2004, to buying into the game's heartland by sponsoring the Football League from August and supporting a range of grass-roots initiatives.
Coke GB is using personal endorsement deals with Wayne Rooney and Thierry Henry to flag up its support of grass-roots activity, a shrewd move in heading off criticism of the role of soft-drinks sponsors in the debate on obesity. These initiatives include sponsoring under-13 leagues and offering football giveaways via on-pack promotions. The Coca-Cola Get Kicking Tour visited UK towns and cities during Euro 2004, with a roadshow encouraging active participation.
As last season's attendances hit a 40-year high, Coke has pulled off a coup in its title sponsorship of the oldest league in the world. Taking over from Nationwide from the start of the season, The Coca-Cola Championship will allow the brand to distance itself from the bad-news stories of excess that have been pouring out of the Premiership.
It also contrasts with the strategy of Pepsi, whose advertising, involving an array of high-profile international stars such as Raul and David Beckham, has had mixed results.
This article was first published on Marketing