The challenge of leveraging an Olympic sponsorship investment

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IU experts are available to discuss issues surrounding 2016 Summer Olympics. Part of this blog originally appeared here.

In prior Olympics, the International Olympic Committee (IOC) tightly controlled access to viewing audiences with strict rules about what merchandise, logos, etc. could be seen at Olympic venues. This included what products athletes were allowed to bring to their competitions.

In the 2012 Olympics, athletes still wore their favorite products to warm up in even if they weren’t an official sponsor – for example – the Beats headphones that Michael Phelps wore. Beats by Dr. Dre had the most effective ambush marketing campaign of the 2012 Olympics: the company sent its products to various athletes with their country’s flag emblazoned on it. Who doesn’t want to show their spirit for their homeland?

Likewise, Nike launched a global ad campaign referring to games in London without specifically mentioning the Olympics, since it was not an official Olympics sponsor. Several other American athletes protested this rule, called “Rule 40,” because they wanted to support the brands and products that had been with them night and day as they trained. After much consideration, the IOC didn’t prosecute any of these rogue advertisers.

Dial forward -- and the IOC appears to have recognized some of the athletes’ concerns.

They relaxed Rule 40, allowing brands to ask for a waiver if they filed paperwork in January, launched an advertising campaign in March, and agreed not to use any Olympic Intellectual Property.

To be a world-class athlete requires years and years of training. This training is expensive, so athletes seek sponsorships early in their careers. They’re extremely loyal to these brands in part because of the support they receive, but also because they’ve gotten used to these products from training. The athletes want to show their support for these advocates when they are on the Olympic stage.

At the same time, innovation in sports technology and the use of data has prolonged the careers of notable athletes.

An Uzbekistani gymnast, Oksana Chusovotina, is competing in her seventh Olympics. Michael Phelps has returned, and has been extremely successful in, his fourth Olympics. It’s not unusual for swimmers to make two or three Olympic appearances – that’s up to 12 years on the world stage. Not surprising, Under Armour (which sponsors more than 250 athletes) asked for and received a Rule 40 waiver. The company launched a campaign with Michael Phelps in March.

Many track athletes tend to return to multiple Olympics, like Justin Gatlin and Allyson Felix. American tennis players (e.g. Serena Williams played in her 4thOlympics), golfers, wrestlers, basketball players, and even gymnasts head back for repeat Olympics. It makes sense that brands want to support a winning athlete throughout their career, but not all of these brands can be Olympic sponsors because of cost and exclusivity agreements.

People are “watching” the Olympics in many different places – TV, Facebook, Instagram, and YouTube, to name a few. A recent study by video technology firm Zefr confirms that among all Olympics-related content watched on YouTube, only 5% is branded content from Olympic sponsors. Instead, the most-watched category is content from the athletes themselves – highlights from past games and qualifying events. Even Olympic sponsors’ Facebook content tends to be seen through shares and likes, rather directly from the brands’ posts.

Samsung, an Olympics sponsor since 1998, has so far successfully parlayed its sponsorship into a meaningful campaign.

Leveraging Christoph Waltz, these ads are engaging when first seen but also encourage people to check out the new Galaxy Note 7 with its intelligent pen online. The product’s introduction video is leading viral video charts online. 

Not to be outdone, Apple (which is not a sponsor) has set up an Apple store just a block from the Olympic Village. The store has Apple watches available in specific country colors, appealing to patriotism since it can’t use Olympic icons.

This skirmish goes back in time, as Samsung asked athletes to cover the Apple icons on their devices at the Sochi Olympics.

The challenge for the IOC will be ensuring that official sponsors get their money’s worth while allowing athletes to support the brands they believe in. While the rule change creates opportunities for smaller brands, it will also make the IOC even more concerned with compliance.