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The Sochi 2014 Marketing Olympics, Part 1: The (One) Issue Games

...Beijing, Vancouver, London, Sochi. Every Olympics Games evolves the Olympic brand, and evolves Olympic Marketing. With Sochi 2014 now into its second week, every day this week I'll be taking a look at the key marketing issues, campaigns and stories of the latest edition of the Marketing Olympics, kicking off today with the LBGT controversy and the latest developments in IOC sponsorship.

The (One) Issue Games 

The run-up to every Olympics is always full of negative headlines and controversy, and Sochi was no exception, but with one issue absolutely dominant: the global protests against Russia's anti-gay legislation, led by POTUS's decision back in December to stay away from Sochi and to nominate Billie-Jean King in the US delegation, rising to a crescendo of campaigns and stories in the final weeks pre-Games.

Inevitably, these saw Games sponsors targeted both by campaigners and the media, in particular McDonalds, whose global #CheersToSochi campaign was hijacked so powerfully on social media that McDonalds has effectively withdrawn it, now barely referencing it in its comms, with the campaign website registering only a few thousand cheers - not exactly what McDonalds would have had in mind.

Cheers To Sochi website

Re-wind to Beijing 2008, the last 'issue' Games, when global protests about China's human rights record targeted the international sections of Olympic Torch Relay, prompting the IOC to limit the Torch Relay to host countries only.But who needs Torch Relay demos when you now have globally-distributed social media?And why has the IOC done so little to publicly engage with the issue? President Bach's Opening Ceremony speech was to be applauded, but was too little, too late.

Problem not solved.

And protests not going away.

The ethics of how Mega Events are awarded, where they are staged, and what they are for, is not going away for the IOC or FIFA. Next after the Sochi Olympics comes the 2014 FIFA World Cup, already highly controversial in Brazil and sure to see more of the protests which marked last year's Confederations Cup and saw FIFA sponsors' and other brands' campaigns hijacked. Following which we have Rio 2016 and Russia 2018, with Qatar 2022 - already the most controversial World Cup of all time - ever-present in the background.

What Sochi 2014 has again proved, if further proof were needed, is that the IOC must radically overhaul its approach to protest and how it handles controversy, if it is to safeguard and evolve the Olympic brand and create a positive environment for its sponsors and NOC sponsors worldwide. Not to mention justify an increased price tag for TOP deals, of which more below.

Meanwhile, not much doubt that the LBGT protests have produced the ad of the Games, Luge. When I first spotted and tweeted it a couple of weeks back it had only 4,000 views on YouTube: now, that's grown to over 5 million and quite right too. Sensational.

2024 At The Double

The IOC has announced two extensions to TOP deals during Sochi: Atos, to 2020, and Panasonic, in a move which took everybody by surprise, to 2024.

Patrick Nally hit the nail on the head.

Nally

Panasonic was widely expected to extend, particularly after Tokyo won the right to host the 2020 Games, but only to 2020, in line with the other global Olympic sponsors, and to allow for a much-mooted IOC review of the TOP programme post-Sochi.Where the Panasonic extension leaves all that is now the big issue in Olympic sponsorship, particularly as it is also now being reported by SportsBusiness Journal (SBJ) that the contract is worth $350m-$400m, thereby doubling TOP prices in the most recent deal cycle.

SBJ has underlined its position as the must-read for anyone in the business with some great reporting from Sochi by Tripp Mickle on IOC sponsorship issues. Both these are worth a read: outgoing chair of the IOC Marketing Commission Gerhard Heiberg interviewed - interestingly, he calls out Samsung as the deal which has added the most value to a TOP sponsor; and the IOC has stopped the Sochi 2014 Organising Committee from projecting sponsors' logos on the outside of some of the Sochi arenas in view of TV broadcasters' cameras.

Tripp also had some nice takes on Twitter on new IOC President Thomas Bach's appearances at sponsors' showcases in Sochi:

Tripp Bach Sochi tweets

The days of Jacques Rogge are well and truly over.

The Invisible Olympic Sponsors – And Why The Games Couldn’t Happen Without Sponsorship

There is a large group of Olympic sponsors whose primary objective over the next 17 days is to be brilliant, but invisible: the companies who provide vital Games Time services.

For brands like Atos (IT), BT (communications), Cisco (networks), Omega (timing) and UPS (logistics) the starter’s pistol on their sponsorship fires today. Everything they have done previously has mattered only in being preparation for this point. And if they make headlines in the next 17 days, it will be for one reason only: the Games being badly affected by a problem with their services.

To illustrate the point, all I need to write is G4S. Until a few weeks ago, G4S was familiar only to the big public and private sector buyers of its services, and was hoping to use London 2012 as a showcase to that small but highly lucrative audience. Now, of course, G4S is a household name because it failed to deliver, and the resulting fall-out has been calamitous for its reputation and share price.

In this space, it pays to be invisible. Get it right, and you have a trump card case study in the high-stakes world of big B2B contracts: “If we can do this for the Olympics, the biggest most complex event in the world, imagine what we can do for you.” Get it wrong and you’re where G4S is right now.

All of which reveals other aspects of the widely misunderstood Olympic sponsorship model, and why sponsorship is far more important to the Olympics than is commonly perceived.

The media convey the impression that the Olympic sponsorship model is the same as World Cup sponsorship and the like – a small group of consumer brands paying big money only for marketing rights.

The reality is very different. The Olympic sponsorship model is actually a giant joint venture, with the IOC and the local organising committee outsourcing critical expertise from multiple partners.

Because the Games is the world’s biggest and most complex peacetime operation, it takes far more to deliver it than pure cash. This Atos Olympics ad evokes that perfectly.

That’s why there are so many Olympic sponsors, and why the majority are B2B brands - although every Olympic sponsor, B2C brands included, provides important products and services as part of its sponsorship, without which the Games couldn’t happen.

And it’s why the majority of Games sponsorship is delivered in the form of ‘value in kind’ (VIK) products and services that are budget-relieving. In the modern era, VIK has consistently contributed the majority of domestic Games sponsorship, and I expect LOCOG’s final accounts to show VIK at 60% of its £700m domestic sponsorship total.

So if you’re ever tempted to join the vociferous chorus of those who criticise Olympic sponsorship, ask yourself this: if the sponsors weren’t there, contributing so importantly behind the scenes, how else would the Greatest Show On Earth be as big and brilliant as it is going to be, once again, in London?