The Olympic Games Are the Most Desirable Sponsoring Property
Or not?
Two-thirds of the world’s eyes are looking at the Olympic Games at some point in time. Its global reach is one aspect that makes the Olympics one of the most successful sponsoring platforms in history. Another reason are the values of humanity, sportsmanship, and comradery that the five Olympic rings carry. These are fundamental values that every brand wants to relate to.
Besides, the Olympics have no serious competition when it comes to multi-sport events. Even though sports organizations globally are starting to combine their most popular sporting competitions (e.g., The World Games, The X-Games), those events only attract a fraction of the Olympic audience.
The exclusivity of the Olympic sponsors
Because of its unique characteristics, the Olympics have been able to implement a rigorous and limiting system when it comes to broadcasting visibility and rights packages.
The Olympic committee has strict rules for athlete and venue advertising that ensure a “clean” Olympic logo and competitions. In addition, the fourteen TOP sponsors have great control over the business fields. That reduces the overall sponsorship clutter.
But when consumers hear and speak about the Olympics, the focus is on its athletes and competitions, not the sponsors. For example, the Olympic social media channels focus heavily on the athletes, the competitions and (mostly) disregard the commercial aspect of the event.
It seems for the outsider as if the rights package doesn’t include rights to the digital channels of the IOC and the events. However, this must not be a bad thing per se since it appears that the digital channel seamlessly integrates digital advertising.
The prestigious value of the brand of the Olympic Games partially lies in the limitation of sponsor visibility and strong exclusivity. Yet, it is this very limitation that also restricts the opportunities to activate the sponsorship. But brands are still willing to pay fees of roughly $200 million for a basic four-year cycle.
To comprehend the opportunities of the sponsorship, one must understand the regulations. Thus, we will discuss the main limitations of Olympic sponsorships next.
Brands must be heard, not only seen
The Olympics are a major event all around the world. Consequently, many brands (including non-official sponsors) are looking to place advertisements during and around the event. Thus, the global scale of the Olympics results in an overall cluttered advertising space. Besides, advertisement space gets more exclusive during such busy times in any area. The same applies to broadcasting and social media advertisements.
Because the Olympics do not provide brands with access to LED boards, facility branding, or logo presence, brands must have a high media budget on top of the sponsorship fee. That fee must be in the same order as the initial sponsoring fee to be visible. The opinions of experts and science differ concerning the optimal size of a media and advertisement budget.
While some experts reason that it must be as high as the initial sponsorship fee, others argue that it should be up to 2,5 times higher (Source). Yet, with the crowded sponsoring landscape, being visible is not enough.
To optimize the Return on Objectives (ROO) and Return on Investment (ROI) of their Olympic sponsoring, brands must also have a strong message and a creative concept. At Advanced Sponsorship Insights (A.S.I) we help sponsors quantify and isolate the financial impact of their Olympic sponsorship.
Access is hard
The heroic performances, signature moments, and individual stories of the Olympic athletes are at the core of the Olympic movement. Yet, being an Olympic sponsor does not guarantee access to the participating athletes. Superstar athletes are especially hard to access and often have a broad portfolio of sponsoring brands themselves.
If a brand wants to use an athlete in one of its commercials, it must secure the rights in a separate, individual agreement. On top of that, the Olympic organizer’s restrictive policy around athlete endorsements during and around the Games makes it difficult for brands to get access to the athletes.
Another aspect of access are the competitions themselves. While the Olympic Games offer a huge variety of sports and events, some events certainly enjoy bigger popularity. Examples are the opening ceremony, the 100m finals, gymnastics, or swimming. Most brands will use their ticket contingency for high-profile guests for these events.
Being able to distribute those tickets to partners and employees is certainly quite valuable for the sponsors, but the costs do not end there. The entertainment outside of the arenas requires an additional activation budget, and so does the accommodation cost. Given that the cities that host the events are filled with visitors, prices for accommodation and entertainment spike during and around the Olympics.
Because the suites have a limited capacity, it could lead to further competition between the sponsors who get access to the main events.
Are the Olympic Games the most desirable event for your brand?
To summarize, being an Olympic sponsor grants brands access to an exclusive package of humanitarian values and inspiring stories that no other multi-sport event can match.
Sponsoring the Olympics makes brands appear altruistic, almost like supporting a good cause or a charity. Those who have the resources to become an Olympic sponsor can utilize the Olympic’s unparalleled reach and the famous five rings that are the most well-known global symbol in the world.
But not everyone has the budget, resources, and individual agreements with athletes to exploit the potential of the sponsorship. Particularly when considering that there is barely any visibility for sponsors that comes with the sponsorship agreement.
Despite being a billion-dollar business, the Olympics are still presented as an amateur-focused sports event around the passion for sports and the desire to win. But the initial sponsoring fee is so high, and the audience is so vast that, one could argue, an Olympic sponsorship is only suitable for global brands that have a mass-market product (see Coca-Cola, VISA, P&G as long-standing sponsors).
How we can help
With the brand association and image transfer being such a big factor in the sponsorship, brands need to accept that ROO rather than ROI might be the dominant objective; something which not all brands dare to accept.
Through our proprietary A.I.-driven models, we quantify ROI from sponsorship in financial terms, as well as to measure the effect that sponsorship is having against specific brand objectives (ROO). We also run in-depth analysis to determine the strategic fit, audience overlap, people impact, and locate any risks of a given sponsorship.
Understanding market dynamics and performance of different property types across regions and categories allows sponsor brands to define strategic priorities and weigh trade-off decisions in their budget planning.
Figure out how much you should be spending, where you should be spending it, and with which properties you could spend it.
