Foreword by Tim Crow, CEO Synergy
To mark Synergy’s 30th year in business, throughout 2014 we’re going to look at the future of sports and entertainment marketing with specially-created pieces of #Synergy30 content, some made by us, some made by friends of the company.
Last month Patrick Nally looked at the future of sponsorship, calling for a radical re-think of the global sporting ecosystem that his pioneering sponsorship model did so much to create.
This month, to coincide with the end of the Sochi 2014 Winter Olympic Games, we’re delighted to have our old friend Michael Payne, former Marketing Director of the International Olympic Committee, share his views on the future of Olympic sponsorship.
Like Synergy, the The Olympic Partners (TOP) global sponsorship programme is 30 years old this year and continues to be held up by many as the gold standard, the ultimate proof being the renewal rates and the nature of the commitments TOP sponsors are making. Most have committed through to 2020 and in Sochi the IOC announced that Panasonic had committed to 2024. That was a surprise for many – the Japanese company has rarely been a first mover: to sponsor Tokyo 2020 was to be expected, but to extend out to 2024 with a rumoured doubling of rights fees, was not. Something about TOP is clearly working to make major corporations like Panasonic, Coca-Cola, Visa and so on commit on a multi- decade basis.
Panasonic President Kazuhira Tsuga and IOC President Thomas Bach at the Signing Ceremony in Sochi for the new Panasonic Olympic sponsorship. Its extension to 2024 took observers by surprise. (Photo: Business Wire)
That’s the positive side. Less positively, if you look at the rights and benefits that are offered, nothing has changed materially in the last 15 years. There is a challenge and a debate as to how you evolve the rights offering so that it is more in tune with the marketing programmes of major business-to-consumer and business-to-business brands today.
You could argue that there is no need, because the TOP sponsors are renewing without change, but there is a challenge in how you are going to grow the TOP revenue base, which frankly is getting very flat, by clearly expanding the window of opportunity and the platform – taking it beyond the traditional ‘Games and Teams’ environment and opening up areas the Olympics brand has tremendous potential in – in particular education and health.
With the changing of the guard and the new president of the IOC, who clearly is starting to shake things up, there has never been a better time to look at how TOP can evolve and step up to a new level. Bach’s Agenda 2020, which was laid forth at the IOC Session in Sochi and due for ratification by end of 2014, has the potential to totally transform the landscape – people are only just beginning to realize the full extent of the revolution in play.
Take education as an example. The big brands have explored the educational space over the years, but generally only on an ad hoc basis in host countries. But how you could take the Olympic brand and values as an overall theme and use them as a vehicle to teach everything from maths and history – that’s a really interesting, untapped opportunity. There are others of course, whether it’s doing a better job in showcasing technology stories, whether it’s properly realising the potential of the digital environment, where very little has been done from a structural standpoint. But the bottom line is that the TOPs, and potential TOPs, are up for this type of territory now and the IOC, if it wants to maintain the gold standard, needs to push these and other boundaries.
The same leap in thinking is needed as when the programme was founded in 1984, because every sponsors’ category has evolved so much. In 1984 the whole focus of the sponsorship industry was exposure. And the IOC knew the scale of the challenge: the one thing that the IOC couldn’t deliver for sponsors was exposure, because it was never going bring advertising into the venues. So the challenge was to create a programme that was meaningful to the companies without exposure. Today, the challenge is the total transformation of the various sponsors’ industries and the rise of digital and social media, and the IOC needs to raise the bar again.
Much can be done to extend the platform beyond the traditional two weeks. Not only through the amount of stories and content that the Games creates as incredible context, but also the opportunities for events and networking all year round, that USOC does very well for example. If I look back at London 2012, not in any way to take anything away from the success of the Games, but from the marketing standpoint there was zero new thinking in terms of rights and benefits. Everything new came from the sponsors, there was no innovation from LOCOG, and the IOC didn’t challenge its organising committee to raise the game.
And as well as a leap in the content of the package, there must be a leap in revenues too. From a financial perspective, if you compare TOP programme revenues now with host country revenues, there is a big disparity: local sponsors are paying much higher fees and that isn’t a one-off – the last three or four Games have all demonstrated this.
If the programme stays static on revenue and stale on content, by 2020 there will be a serious problem.
Michael Payne, February 2014.
About Michael Payne
Michael has been at the forefront of the sports marketing industry for over thirty years. From 1983 to 2004 he led the global marketing effort for the Olympic Movement as the IOC’s first Marketing and Broadcast Rights Director, and now runs his own strategic advisory business serving a diverse group of clients including Formula 1 and Crystal Digital, where he serves as Chair of international operations.
His book ‘Olympic Turnaround’, which tells the definitive story of how the Olympic Games stepped back from the brink of bankruptcy to become a multi-billion dollar brand, has been translated into 14 languages and sold over one million copies.
By Tim Crow on February 25th, 2014
Tags: Beijing 2008, Default, IOC, London 2012 sponsorship, Olympic sponsorship, Pyeonchang 2018, Rio 2016, Rio 2016 Sponsorship, Sponsorship, Sponsorship consultants, Tokyo 2020, Winter Olympics