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AMBUSH MARKETING IN WORLD SPORTING EVENTS SPORT/LAWACCORD Kelly Charles Crabb Beijing, April 2007

AMBUSH MARKETING IN WORLD SPORTING EVENTS SPORT/LAWACCORD Kelly Charles Crabb Beijing, April 2007. OVERVIEW. Development of Commercial Sponsorships Sponsorship Goals and Rights The Olympic Games as a Sponsorship Model Ambush Marketing Ambush Strategies

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AMBUSH MARKETING IN WORLD SPORTING EVENTS SPORT/LAWACCORD Kelly Charles Crabb Beijing, April 2007

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  1. AMBUSH MARKETING IN WORLD SPORTING EVENTS SPORT/LAWACCORD Kelly Charles Crabb Beijing, April 2007

  2. OVERVIEW • Development of Commercial Sponsorships • Sponsorship Goals and Rights • The Olympic Games as a Sponsorship Model • Ambush Marketing • Ambush Strategies • Effects of Ambush Marketing (Three Perspectives) • Countermeasures to Ambush Marketing

  3. DEVELOPMENT OF COMMERCIAL SPONSORSHIPS • The First Modern Olympic Games (1896) • 67% of cost by private donations • 22% from the sale of special stamps • 11% from tickets (60,000), coins, medals

  4. DEVELOPMENT OF COMMERCIAL SPONSORSHIPS • Olympic Games since 1984 • Seoul 1988: $338 million in sponsorship fees • Atlanta: World and Games sponsors put in over $1 billion for sponsorship rights (33 sponsors averaging over $40 million each) • Sydney attracted $700 million in local sponsorship revenue alone • Salt Lake City made $850 million from all sources

  5. DEVELOPMENT OF COMMERCIAL SPONSORSHIPS • The “five rings” -- introduced in 1914 -- is the most recognized trademark in the world

  6. DEVELOPMENT OF COMMERCIAL SPONSORSHIPS • Other World Sports Organizations • World Cup Soccer • Formula One Racing • National Hockey League • Special Olympics • National Football League • Major League Baseball • National Basketball Association

  7. SPONSORSHIP GOALS & RIGHTS • Benefits of Association • Access to the audience • Link to event values • Survey (2000): Over 80% associated the five rings with “success” and “high standards” and 60% with “world peace”

  8. SPONSORSHIP GOALS & RIGHTS • Link to values:

  9. SPONSORSHIP GOALS & RIGHTS • Rights • Category exclusivity • “Exclusive, legal access to the public profile and positive values associated with the Olympic Games” – Michael Payne, IOC Director of Marketing • World Cup 1994: MasterCard vs.. Sprint • MasterCard: “card-based payment and account devices” • Sprint: “long distance telecommunications” Sprint made pre-paid telephone cards – the courts sided with MasterCard

  10. SPONSORSHIP GOALS & RIGHTS • Rights • Right to use official marks and designations

  11. SPONSORSHIP GOALS & RIGHTS • Rights • Right of hospitality • Access to the Games • Accommodations • Hospitality suites • Tickets

  12. THE OLYMPIC GAMESAS A SPONSORSHIP MODEL • International Olympic Committee (IOC) as Owner • “The Olympic Partner” (TOP) Program • Exclusive use of five rings standing alone • Worldwide territory • Highest level of hospitality and other rights

  13. THE OLYMPIC GAMESAS A SPONSORSHIP MODEL • National Olympic Committee • Marketing rights (shared with OCOG) • Salt Lake 2002: Joint Venture with SLOC • Beijing 2008: BOCOG controls • Team sponsorships

  14. THE OLYMPIC GAMESAS A SPONSORSHIP MODEL • Organizing Committee for the Olympic Games (OCOG) • Sponsors of the Games (Host Country Only):

  15. THE OLYMPIC GAMESAS A SPONSORSHIP MODEL • Organizing Committee for the Olympic Games (OCOG) • Highest level of Games sponsors (Partner) • Category exclusivity • Greatest level of benefits • Use of official OCOG Marks • Access, hospitality, tickets • Highest domestic price • Can’t be greater than TOP

  16. THE OLYMPIC GAMESAS A SPONSORSHIP MODEL • Organizing Committee for the Olympic Games (OCOG) • Mid-level sponsors (Sponsor) • Category exclusivity • Limited designation rights • Limited access, hospitality, tickets • Mid-level domestic price

  17. THE OLYMPIC GAMESAS A SPONSORSHIP MODEL • Organizing Committee for the Olympic Games (OCOG) • Official suppliers (Supplier) • Exclusive/non-exclusive • Less of everything • VIK, not cash • Licensees (merchandise) • Right to exploit Games (OCOG) marks in merchandise

  18. AMBUSH MARKETING • Unauthorized association with sporting event or movement • No compensation paid to event owner or the organizer • Public misconception of official association

  19. AMBUSH MARKETING STRATEGIES Sponsorship of media coverage of the event • Los Angeles 1984: Fuji was worldwide sponsor in film category, Kodak became a sponsor of the television broadcast by CBS • Lillehammer 1994: McDonalds was the food sponsor, but Wendy’s bought ad time during the Games (ads were “spoofs” on the games)

  20. AMBUSH MARKETING STRATEGIES Sponsor subcategory within the event and exploit aggressively • Los Angeles 1984: When Fuji Film became the worldwide film sponsor, Kodak because the “official film” of the US Track and Field Team • Seoul 1988: Roles reversed: Kodak was the worldwide film sponsor and Fuji became the sponsor of the US Swim Team

  21. AMBUSH MARKETING STRATEGIES Sponsor subcategory within the event and exploit aggressively • World Cup 1990: Coke was the worldwide soft drink sponsor, Pepsi was the sponsor of the Brazilian Team

  22. AMBUSH MARKETING STRATEGIES Sponsor subcategory within the event and exploit aggressively • Sydney 2000: Qantas sponsored pre-Olympic meets and the Olympic selection trials for the Australian Swim Team – the trials were broadcast from the official Olympic venue where Qantas put its name and logo

  23. AMBUSH MARKETING STRATEGIES Use current or former event winners or participants in advertising • Calgary 1988: American Express, a sponsor of the 1984 Games, turned down a chance to be a sponsor of the 1988 Games, but used Billy Kidd and Eric Heiden (two famous US Olympic Team athletes) in its ads • Atlanta 1996: Fuji put up billboards across the US showing US Olympian Daniel O’Brian throwing a Javelin – the USOC complained • Nagano 1998: Campbell Soup used three US figure skaters in a series of ads – the USOC complained and Campbell paid a “contribution” to the USOC

  24. AMBUSH MARKETING STRATEGIES Use current or former event winners or participants in advertising • Sydney 2000: Qantas, not a sponsor, used Olympians Cathy Freeman and Kieren Perkins in ads

  25. AMBUSH MARKETING STRATEGIES Use current or former event winners or participants in advertising • Sydney 2000: Adidas sponsored Ian Thorpe (Australian Olympian), while Nike was the official clothing supplier to the Australian Team – Thorpe covered the Nike logo on the medals stand

  26. AMBUSH MARKETING STRATEGIES Make sponsorship contributions to “cause” of event • Seoul 1988: Seagrams, a non sponsor, launched a program called “Send the Families” – by paying the cost of sending 500 relatives of the Canadian team to the Seoul Games

  27. AMBUSH MARKETING STRATEGIES Make sponsorship contributions to “cause” of event • Nagano 1998: Visa created picture menus so foreign guests could order at Japanese restaurants – the restaurant owners created large signs advertising their participation in the “official Olympic program” This Restaurant participates in the Olympic Picture Menu program

  28. AMBUSH MARKETING STRATEGIES Plan advertising that coincides with the event Contests • Stanley Cup 1990: Coke became the official National Hockey League (NHL) sponsor under license with National Hockey League Services (NHLS), but Pepsi sponsored the “Pro Hockey Playoff Pool” contest hosted by a famous former player – the Canadian court ruled for Pepsi in the famous case of NHL vs. Pepsi-Cola Canada Ltd.

  29. AMBUSH MARKETING STRATEGIES Plan advertising that coincides with the event Activities within the geographical area • Los Angeles 1984: Converse was the official shoe sponsor of the Games, Nike erected huge murals near the Los Angeles Coliseum showing Nike track and field athletes • Atlanta 1996: A non-sponsor leased the outside of a tall office building in plain view of the main track & field venue and placed a banner -- covering a full side -- of the building

  30. AMBUSH MARKETING STRATEGIES Plan advertising that coincides with the event Activities within the geographical area • World Cup 1994: Adidas was the official sponsor, but Puma hired a plane to fly over the official venue trailing an advertising banner

  31. AMBUSH MARKETING STRATEGIES Plan advertising that coincides with the event Activities within the geographical area • Formula One, Australian Grand Prix 1999: In the background, during the award of the trophy, Messages on Hold Australia (MOHA) waved a giant banner

  32. AMBUSH MARKETING STRATEGIES Plan advertising that coincides with the event Activities within the geographical area • Salt Lake 2002: Local owners of Burger King, a non sponsor, launch a Games related campaign -- McDonalds is the official sponsor

  33. AMBUSH MARKETING STRATEGIES Use generic words • Lillehammer 1994: Visa vs. American Express – Visa, the official sponsor, “American Express cards not accepted,” but American Express, non sponsor, “you don’t need a visa to go to Norway” (double entendre)

  34. AMBUSH MARKETING STRATEGIES Use generic words • Sydney 2000: Landrover’s ad – “Let the Games Begin!”

  35. AMBUSH MARKETING STRATEGIES Use generic words • New Zealand Fair Olympic Association sued Telecom New Zealand under the New Zealand Fair Trading Act, but the court refused to grant an injunction RING RING RING RINGRING

  36. AMBUSH MARKETING STRATEGIES Apparel • Salt Lake City 2002: Columbia Sportswear is not a sponsor, but NBC announcers wore Columbia-branded apparel

  37. AMBUSH MARKETING STRATEGIES Apparel • Nagano 1998 & Salt Lake City 2002: Nike was not an official sponsor or supplier, but athletes wore Nike branded apparel and used Nike-branded equipment

  38. AMBUSH MARKETING STRATEGIES Apparel • 2006 FIFA World Cup: spectators wearing orange Bavaria Brewery-branded Leeuwenhosen (overalls) were ordered to disrobe by officials in Stuttgart, and many of these Dutch supporters watched the game in their underpants. (Budweiser was the official sponsor of the World Cup.)

  39. EFFECTS OF AMBUSH MARKETING (THREE PERSPECTIVES) • Owner/Organizer • Official Sponsor • Competitor

  40. EFFECTS OF AMBUSH MARKETING (THREE PERSPECTIVES) Owner’s and Organizer’s Viewpoint • Diminishes the value of the “official” designation • Harm the financial viability of the event • Illegal, if marks are used • Costly to police

  41. EFFECTS OF AMBUSH MARKETING (THREE PERSPECTIVES) Official Sponsor’s Viewpoint • Undermines the value of the investment • World Cup 2002: After the 1988 World Cup, Adidas announced that it would not remain a sponsor unless FIFA could assure that Adidas sponsorship investment would be protected

  42. EFFECTS OF AMBUSH MARKETING (THREE PERSPECTIVES) Official Sponsor’s Viewpoint • Unfair, as the competitor did not pay • Lillehammer 1994: IOC named Wendy’s the “worse poacher” of the Games and criticized Wendy’s for not supporting any athlete – “we want to expose them”

  43. EFFECTS OF AMBUSH MARKETING (THREE PERSPECTIVES) Competitor’s Viewpoint • Competitor has no obligation to stand still (in fact, it has an affirmative obligation to enhance shareholder value by aggressive advertising) • “Marketing is a form of warfare, and the ambush is a weapon!” • “Ambush marketing, correctly understood and rightly practiced, is an important, ethically correct, competitive tool in a non-sponsoring company’s arsenal of business and image-building weapons.” Jerry Welsh

  44. EFFECTS OF AMBUSH MARKETING (THREE PERSPECTIVES) Competitor’s Viewpoint • Not illegal if trademarks are not used

  45. EFFECTS OF AMBUSH MARKETING (THREE PERSPECTIVES) Competitor’s Viewpoint • Not illegal if disclaimers are used Sydney 2000: Qantas’ poster said “Sydney 2000*” — the asterisk drew readers to a small print disclaimer: “Qantas is not an Olympic Sponsor”

  46. COUNTERMEASURES TOAMBUSH MARKETING IOC requires host nation to enact protective laws • Australia enacted the Sydney 2000 Games (indicia and images) Protection Act of 1996 • In 2002 Beijing Municipal Government promulgated Regulations of Beijing Municipality on Protection of Olympic Property • On January 30, 2002 - Executive Committee of the State Council promulgated Decree No. 345 (Regulations on Protection of the Olympic Symbols); on April 1, 2002 - Decree No. 345 became effective as law in the Peoples Republic of China

  47. COUNTERMEASURES TOAMBUSH MARKETING IOC requires host nation to enact protective laws • Canada made certain covenants in its application to host the 2010 Games that Canadian law could be used to protect against certain ambush marketing activities. New legislation is currently being introduced in Canada which would further restrict ambush marketing.

  48. COUNTERMEASURES TOAMBUSH MARKETING IOC requires host to establish ambush marketing plan • Monitor all venues • Coordinate with police authorities • Take action, when appropriate

  49. COUNTERMEASURES TOAMBUSH MARKETING Official sponsors get first option to sponsor broadcast of event • World Cup 1992: All advertising surrounding the event was sold to official sponsors • IOC offers official sponsor is given first option to acquire broadcast and advertising rights for the event in each territory where broadcast rights are sold – IOC/Broadcaster agreements

  50. COUNTERMEASURES TOAMBUSH MARKETING IOC requires OCOG to purchase all billboard space surrounding and leading up to the Games

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