The essence of sponsorship is the right of association, as enshrined in the International Chamber of Commerce’s definition:
‘Any communication by which a sponsor, for the mutual benefit of sponsor and sponsored party, contractually provides financing or other support in order to establish a positive association between the sponsor’s image, brands, products or services and a sponsored event, activity, organization or individual.’
The difference between the Olympic and Paralympic Games and other major sporting events is that they are the only property that offers sponsors virtually nothing but the right of association. Unlike other platforms, which will build in assets and benefits to their sponsorship package like perimeter board branding or event tickets, the only direct benefit you get from investing in a Games sponsorship is the right to use certain logos and marks. Even then, these must be approved on a case by case basis. Everything else, including hospitality tickets, comes at an incremental price.
So Games sponsors cannot rely on a nice big advertising value equivalent from broadcast brand visibility to justify the fee internally. They are forced to be much more disciplined in their assessment of how a Games sponsorship will create an acceptable return on investment. These sponsors must focus on who their target audience/s are, why partnering with the Games is relevant to them, how they are going to communicate those messages effectively and what is the desired behavioural outcome.
For consumer brands this is not such a big ask. Introducing Games branded packaging and point of sale materials into their normal communications channels creates a significant uplift, especially in the period immediately before and during the Games. Scaling this up globally for the International Olympic committee’s TOP sponsors can make the sponsorship fee seem relatively insignificant. Coca Cola apparently benefits from an uplift or around 40% -- that’s an awful lot of fizzy drink and additional profit.
The icing of the cake is the advantage of direct sales. Those sponsors with consumer offerings are able to claim exclusive sales rights to satisfy Games attendees, whether athletes, officials or spectators. The 9.8 million tickets sold for London 2012 will generate plenty of in venue demand for Coca Cola, Cadbury’s, Heineken and Macdonald’s, all paid for exclusively on Visa.
Less obvious, but no less relevant, are the opportunities that the Games offer B2B sponsors. The lack of automatic brand exposure means that B2B sponsors focus on closely targeted sponsorship activations. One example of this is Cisco’s Plan for Success program. This incorporates a webinar series, a LinkedIn Group and online information including an Is Your Business Ready test, all aimed at helping businesses big and small make sure they are ready for all the challenges and opportunities the Games will bring this summer.
Another strong B2B benefit of a Games sponsorship is that all sponsors find they have joined a club that provides a platform for marketing relevant products and services direct to some of the world’s leading corporations. GE, for example, credited its Games sponsorship with over $700m in China related sales even before Beijing 2008 began.
The other big B2B benefit of the Games is the desirability of its tickets. No other event attracts the interest of such a wide audience, making it the ultimate corporate hospitality tool. Even with the recent introduction of the Foreign Corrupt Practices Act into US Federal law and the UK’s Bribery Act, London 2012 will attract the highest quality guests to sponsors’ entertainment programs.
The difference with London 2012 is that both sponsors and guests will expect to share relevant business information and education that will inform their strategies when they return to the boardroom. This is why Cisco is investing heavily in creating Cisco House, a business transformation showcase that will operate on the roof of the new Westfield Shopping Centre overlooking the Olympic Park. Operational three months in advance of the Games, a significant number of customers will have the opportunity to take time out from the operational aspects of their own business to explore potential future states.
They say there is no such thing as a free lunch and why should Games hospitality be any different? I see this as a really positive move both for the host company and that of the beneficiary – hosts will have more insightful conversations with customers and customers will have a clearer idea of how a sponsor’s products and services can deliver business results. Ultimately, if nothing else, time spent in proximity will strengthen relationships and build bridges for the future.
To learn more, please join our free webinar on 28 February at 12:30 pm, to hear more from experts from Cisco, the BBC, Adecco and BT. You can register here and visit www.cisco.co.uk/london2012 for more ideas and insights.