Olympic Sponsorship Analysis – Part 8: The Fallout and the Recovery

Cactus FlowerI went into this Olympic season thinking I would be writing about ambush marketing. It’s a fascinating subject and probably the most public peek behind the curtain the average punter sees of our industry. This year, however, the real story turned out to be the lengths to which the Olympic movement and its sponsors went to “protect” themselves, and the personal freedoms and genuine national pride they were willing to quash along the way.

Honestly, I have been struggling to write this. The issues are big and far-ranging, and as a heart-on-the-sleeve idealist, difficult for me to reconcile after the last few years of extraordinary sophistication growth for our industry. So, rather than having that devolve into a gripe-fest – which was a real danger – I’ve decided to included the lessons we can all take from it, and how to keep it from happening again. Fingers crossed.

Lesson #1: A sponsor can’t win if the fans lose

Our industry has come a long way. We’ve gone from sports sponsorship being a luxury spend with little impact, to a brand-driven marketing machine that often disregarded the fans entirely, to a sophisticated, fan-centric, welcome part of the experience. Sponsorship is now win-win-win, with the third win for the fans. Until the London Olympics.

  • How do the fans win when they can’t buy fries – alone or with anything besides fish – from any of the 800 food outlets at Olympic venue… except McDonald’s?
  • How do the fans win if they are prohibited from using their own 3G technology to get on the web, BT?
  • We are proud to accept only Visa? Congratulations on 49% brand recognition, but how many of them hate you?  (Judging by the number of times I saw that blog reposted, tweeted, referenced, and commented on, I’d say quite a lot.)
  • How exactly do the fans win if they feel like they may not be able to wear what they want? Lord Coe may have recanted, but that didn’t get nearly the airplay, leaving fans confused (and Joan Rivers wanting him to guest on Fashion Police).

How do the fans win when sponsors are curtailing sensibility and personal choice? How does that make people love those sponsors more? They don’t, and it doesn’t. Trying to engender affinity for your brand by forcing them to use it is like trying to keep hold of a banana by squeezing it as hard as you can.

Higher, faster, stronger? Try meaner, dumber, and more self-involved.

What can we do?

The Corporate Sponsorship ToolkitWe need to, as an industry, reject the more-is-better approach to rights protection and that there is no such thing as “too much exclusivity”. I am not for a second saying that IP infringement or proximity laws shouldn’t be enforced, but that those legal rights do need to be balanced by common sense – something that was clearly lacking in London.

Sponsors need to put the fan experience first, finding leverage ideas that amplify the best stuff and improve the worst stuff about the experience, or get people closer to their big, event-related dreams. (There is an easy process for finding those ideas outlined in my new book, The Corporate Sponsorship Toolkit.)

Sponsorship seekers should be strongly encouraging sponsors to become Last Generation Sponsors. You can work with them one-on-one, host a leverage workshop, ask your best sponsors to present case studies, distribute information that may start a change in their thinking (my white paper, “Last Generation Sponsorship”, would be a good start), or you could just consistently talk about adding that value to the fan experience.

Lesson #2: Industry credibility is fragile

When sponsors invest in sponsorship, they get the privilege of connecting with people through something they already care about. This makes the medium incredibly powerful for sponsors that respect and extend the experience. It also means the backlash will be passionate and swift against sponsors who don’t.

In the case of the London Olympics, the egregiousness of the brand greed on show, and the vast coverage of the entailing outrage, both in main and social media, has no doubt impacted on how fans view what corporate sponsorship means.

Thousands of social media pundits have said the same thing I’ve heard from at least twenty of my non-industry friends in the past couple of weeks – these words, almost verbatim:

“Sponsors are just greedy corporates who don’t care about the fans or what they sponsor.”

Oh, that’s depressing… and largely untrue. The best sponsors have made it to Last Generation Sponsorship, and virtually all sponsors are at least starting to go in that direction. Through sweat and persistence and ingenuity, sponsors are becoming a welcome part of an event experience.

But despite all of the hard-earned gains our industry has made with consumers, particularly over the past few years, the London Olympics marked a credibility backslide, with an unprecedented degree of difficulty, sparking a landslide of vocal and, frankly, deserved cynicism. I very strongly believe that fans are now hypersensitive to selfish sponsorship, and may be for some time.

The good news is that our whole industry can use this as a cautionary tale and a starting point for doing it better. Maybe, like the Global Financial Crisis, this is a bad thing that will clarify the need for doing sponsorship well, spurring growth. That’s the silver lining, but we still need to deal with the dark cloud of fan cynicism.

What can we do?

First and foremost, we need to champion the great sponsors. The rights-holders should be heavily promoting what the sponsors are doing right – both to fans and to their larger communities. This happens now, but often the tone is that of an overexcited pitch. I think that needs to be balanced with more straightforward messaging, taking the tone of “here are all the ways our sponsors are making it better to be a fan.”

And frankly, sponsors need to be more consistent about adding that value. We, as an industry, need to position the Olympic sponsorship debacle as an unfortunate blemish on a great and sophisticated marketing platform. The Olympics may be big, but they are the exception, not the rule.

Lesson #3: Sponsors should get their main returns before the event starts and outside of the venue

Do you really think McDonald’s paid in the vicinity of $100 million to be the exclusive supplier of fries and all the other hoo-ha at Olympic venues? Of course not. They got most of their value from activities happening in McDonald’s retailers around the world and in their marketing campaigns for months before the event. Given that, why they had to be such bastards to people on-site, I don’t know.

Early in my career, a major event was cancelled due to a blizzard (have I ever mentioned I’m from Minnesota?). An FMCG client that sponsored the event told me that they weren’t worried about it. They had got all the returns they needed to get – in this case, profit on sponsorship-driven incremental sales – before the event even started. They considered any additional benefit at the event to be gravy.

While sponsorship sophistication has grown immensely since then, and blizzards have been an almost non-existent part of my career for two decades, I have kept that thought front of mind. It’s driven by a few key factors:

  • Events are crowded with marketing messages.
  • People aren’t necessarily paying attention to the sponsors.
  • If you’re too heavy-handed about grabbing their attention, they will resent you.
  • Things go wrong.

I’m not saying that there is no value in on-site activity, but that over-emphasising it is risky and unproductive.

What can we do?

Take a page from sponsors with small sponsorships. They make them seem much bigger than they are by focusing their sponsorship leverage on their much larger customer base. (More on that here.)

The basic idea in this context is that if the leverage focal point is a broader fan base and the time frame is the period of genuine anticipation before an event, there is enormous potential for returns outside of the event itself. This reduces any need for hysterical, power-crazy leverage on-site, rendering on-site activities as an important factor, but only one of many.

Lesson #4: Use or release sponsor tickets

My daughter and I watched a lot of the equestrian events, which it was widely reported were sold out. You never would have known it, as the stands were half empty for much of it. This was just one of the venues where there were literally thousands of empty seats, yet none available to the public.

When the question of why these sold out events weren’t even close to full, LOCOG shunted responsibility to the sponsors, saying that they hadn’t used their allocations, even though they were reportedly told to. Following that, LOCOG admitted that even if the sponsors had turned the tickets back in, they had no system to make them available to the public.

Given what hyper-control freaks LOCOG has been about so much else, it seems astounding to me that this wasn’t better managed. I suppose they always had the option to blame the sponsors, and that was probably the easier route. Except that they made their sponsors look greedy and dismayed the fans who would have given their eye teeth to be in those seats, but oh well.

What can we do?

For sponsors, my best advice is to try to be accurate about the number of tickets you will actually use. Many sponsors take the approach that if the event is extremely desirable, they should grab all the tickets they can, just in case they need them later, but this can backfire.

If you do end up with an allocation of tickets a few days before the event, this is a perfect time to do a short social media promotion to give away tickets that will go unused. If the event is that high-end, there is every chance that you’ll have to put your leverage plan into the rights-holder for approval well in advance. Be sure to include this option, noting that whether it goes ahead will be dependent on whether you have exhausted your ticket allocation.

As for sponsorship seekers, if you are in the enviable position of having a super-desirable, sell-out event, don’t automatically include huge ticket allocations in your sponsorship proposals. Include a base level of VIP tickets and set a window during which they can purchase additional premium tickets. You could allow yourself some flexibility by holding back an allocation of tickets, in case a sponsor has a specific need at short notice, but make those tickets available to the general public the morning of, or the day before, the event.

Lesson #5: A toxic culture breeds toxic sponsorship

At the Closing Ceremony, Lord Seb Coe thanked a cast of thousands, but managed not to thank the TOP and Games sponsors that were responsible for close to two billion dollars in revenues. There has been speculation that this was because he was disappointed that the sponsors didn’t add value to the event experience for the fans. Who knows why he didn’t thank them. I don’t really care. But it doesn’t take Einstein to see that the culture of sponsorship around these games was focused on control and paranoia, not respect and added value.

Who among us hasn’t suffered through at least one of those multi-day sponsor indoctrination presentations, the theme of which is invariably “now that you’ve signed on the bottom line, here are all the ways we’re going to make your life more complicated than necessary”?

I’ve sat through those two-hour Powerpoint presentations about proper use of the event logo and colour scheme, thinking, “Couldn’t this just be put into a manual?” Then, of course, they handed out the manual. The most recent was 133 pages long.

I’ve sat through sessions where several partners at some blue-chip law firm go through the rights protection program in minute detail, with the overarching tone being “we’ve got your back”. At one of these, I put my hand up and said, “I bet you five dollars that there will be at least five major brands that will mount legal, strategic ambushes of this event.” The lawyer answered, “of course there will be some ambushes, but mainly by the larger, cleverer companies.” So, they’ve got our back, except in cases where the ambusher is smart, strategic, and well resourced. Well, that’s a relief.

And not one time have I ever experienced a session at one of these things about how to create a great leverage program. Not once.

Sorry, I digress. My point is that when the tone is about control, paranoia, and fear abatement, the quality of the sponsorships does suffer. It becomes a case of groupthink, where the tone of the relationship permeates the strategies of the players.

You can’t expect great sponsorship leverage programs that add value to the fan experience, making that experience better and more inclusive and more personal to the people who care about it, if you’re selling and enforcing rights that do the exact opposite. You just can’t.

What can we do?

If the focal point has to shift – and in many major sporting organisations, it does – the words need to shift.

  • Stop talking about rights protection. Start talking about strategic potential.
  • Stop requiring host countries to pass laws that don’t actually curtail strategic ambush. Start educating sponsors to be so effective that ambush won’t damage them.
  • Stop focusing on exerting control and limiting the fan experience. Start focusing on adding value to the larger fan experience.
  • Stop trotting out lawyers to explain the rules of sponsorship engagement. Start introducing strategists to explore the possibilities of sponsorship.

Sponsorship seekers, if a sponsor ever asks you for a right that diminishes the experience or impinges on the free will of your fans, say “no”. Say it loud.

As for sponsors, just because you become part of some elite sponsor “family” doesn’t mean you have to buy into that crap. You’re better than that. The fans deserve better than that. And your customers deserve better than that.

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