Rio 2016 – Olympic Games at Digitalis

Rio 2016 is in full swing, but it’s not just the athletes who are looking to draw the crowds. The Olympics offer a unique opportunity for brand sponsors to harness the attention of huge audiences from across the world. The opening ceremony drew 30 million viewers in the US alone which, whilst down almost 30% from 2012 (go London!), is still a huge number of eyeballs. However, subtle changes to the sponsorship rules set by the International Olympic Committee (IOC) are making the Rio games more unique than others.

Which sponsors are looking to capitalize on the games, how they go about it and the interesting ways in which they can’t…

Sponsorship is big

Marketers continue to be drawn to sponsorship deals in a big way. Global sponsorship is expected to grow nearly 5% to $60 billion in 2016, forecasts IEG, with sports sponsorship claiming the largest share (70% in the US). This revenue stream is of paramount importance to the Olympics, reports New Republic, with the IOC generating 45% of its income from sponsorship, combined with 47% from broadcast rights and the remaining 8% from ticket sales and merchandise. The IOC struggled financially in the 1970s but its diversification strategy since then has relied heavily on sponsorship from a handful of global brands such as Coca-Cola, McDonalds, Samsung and Visa. These Olympic Partner brands generated almost a billion dollars for the IOC between 2009-2012.

 Sponsorship is not a team sport

The IOC tends to allow only the biggest businesses to compete for the prized position of Olympic Partner, with brands like Coca-Cola taking exclusive global rights within their product category.

Taking a larger number of sponsors, The Guardian notes, would risk sponsors “disappearing into the noise”. This can be seen in organizations like Manchester United, who have taken on 24 global sponsors including official partners for paint, tyres and noodles. Yes, noodles.

The IOC’s more focused approach, however, and the allure of global audiences mean that other brands are eager to capitalize on the games. This is often through sponsorships of teams or athletes, but these agreements can undermine and even usurp the IOC’s deals.

In 2012, recounts Forbes, Nike used cheaper third-tier sponsorship deals and well-timed ads to ambush the official sportswear partner Adidas. The result was 37% of consumers recognized the former brand as an Olympic ‘sponsor’, compared with 24% for the official partner (ouch!!). Nike’s strategy, the article states, illustrates the importance of combining sponsorship with other media, such as relevant and timely TV spots. TV advertising remains crucial for brands, supported by recent research by Greenlight, with a reported 30% of British audiences remembering a brand’s sponsorship of the 2012 Olympics from television.

Rewriting the rulebook

“Despite these limitations, it is clear why the IOC wants to protect the revenue it generates from the Olympic brand. Whilst unofficial activity can contribute to the buzz surrounding the games, with brands extending the reach of games-related marketing content, the Olympic committee is highly proactive in shutting down such activity to protect the value of its partnerships” explains Joseph Clerkenwell, Digitalis founder and President. In 2011, for example, IOC lawyers were let loose on local businesses around the Olympic park in Stratford, honestly named Olympic Café, Café Olympic and the Olympic Internet.

However, for Rio the rules have changed. The IOC has modified ‘Rule 40’, the sponsorship guidelines, in two key ways: one less restrictive, and the other very much more.

  1. Firstly,as highlighted by Yahoo, sponsors of athletes in previous years had to abide by a month-long blackout period, starting a week or so before the Opening Ceremony, during which they couldn’t advertise using those athletes at all. Now brands are allowed to advertise using their athletes, as long as they don’t reference the Olympics in any way. So, you can show Usain Bolt racing down the track for a rejuvenating sip of Gatorade during summer 2016, but this is meant to have nothing to do with the Olympics.
  2. Secondly, the other major change to Rule 40 heralds a massive crackdown on social media. The list of ways in which businesses can infringe on these rights is extensive,helpfully listed here by AdWeek, but boils down to the fact that official sponsors of athletes, non-official business sponsors of the games, paid influencers or anyone with a commercial interest in social media are forbidden to post any Olympics-related content or trademarked language. Terms and phrases like “Olympic”, “Olympian” and “Let the games begin” are locked up, even if used in Vines, GIFs or for a lowly hashtag.

The internet always wins

Industry commentators and internet users have criticized the IOC’s somewhat draconian approach to social media, but the rules raise interesting questions surrounding ownership. Consumers tend to feel entitled to events of social importance, scale and heritage, even if the events are astronomically expensive and must be supported by sponsorship as well as broadcast rights. Regardless, the global and cooperative nature of the Olympics means audiences are particularly keen to share their responses online. Here are some heart-warming examples of them throwing the rulebook.

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