For sponsors, Games were money well spent

Sponsors of the Beijing Olympics have spent hundreds of millions of dollars for 16 days in the spotlight and they reckon it was money well spent to get a foothold in the huge Chinese market.

Sponsorship money is a big part of the Olympics, estimated to account for a third of its revenues from 2001 to 2004, but the 60 or so sponsors for Beijing were focused as much on host nation China as the Games themselves.

Chinese consumers’ recognition of companies backing the Olympics has surged, initial surveys show. They are also more willing to buy the products of companies which have supported an event so keenly anticipated in China.

“It has been a great success, especially as there have been no major casualties,” said Gyehyun Kwon, head of sports marketing at Samsung Electronics, one of 12 global sponsors paying an average of $72-million for the rights to the Beijing and 2006 Turin Winter Olympics.

Despite protests along the route of the Olympic torch relay and calls by human rights groups for companies to boycott Beijing, the August 8 to 24 Games ran smoothly, to sponsors’ relief.

“The global attention has been fantastic, television ratings around the world at record levels, and the athletes made history,” said Michael Lynch, head of global sponsorship at Visa, another of the 12.

Other global sponsors like Coca-Cola and McDonald’s twinned their Olympic marketing campaigns with Chinese athletes winning gold to tap into a wave of patriotism running through China and its 1,3-billion population.

This focus on China comes as the Communist nation emerges as a global economic superpower, desperate to show its modern face. China’s importance is amplified by the slowdown hitting more well established economic powers.

As well as wooing Chinese consumers, companies have jumped at the chance to build goodwill with some of their most important clients in the world—the resource-hungry Chinese government and its companies.

For example Anglo-Australian mining giant BHP Billiton was a sponsor with no consumer brand but with a need to maintain good relations with its biggest customer, China.

Battle of the rings
Coca-Cola, which is locked into funding the Olympics until 2020, said its sales always saw a short-term boost in any Games.

“But longer term we are looking at growing our position in China which is our fourth largest market and this means increasing brand awareness,” said spokesperson Petro Kacur.

CSM Media Research has measured the reaction of Chinese consumers to Olympic companies since 2006. It found that Coca-Cola had overtaken local dairy company Yili, one of about 30 local sponsors, as the most effectively-marketed Olympic brand.

CSM business development director Matthew Brosenne said a litmus test of sponsorship success was purchasing intent. CSM found 70% of Chinese consumers said they would purchase products from companies they knew were part of the Olympics.

“I would definitely say the Beijing Games were a success for sponsors as there is a tremendous amount of recognition around the companies involved,” he told Reuters.

It is hard for companies to quantify the return from sponsorship but all expressed relief that the International Olympic Committee and Beijing cracked down on ambush marketing.

Samsung said it has its own customised system which can give detailed numbers on how the Games boosted its brand.

“We have a very clear target for our presence at the Beijing Olympics and we want to see a 10% improvement for brand enhancement in China,” said Kwon.

“So far from interim reports and our sales figures the Beijing Olympics has been a great success.”

Neither sponsors nor marketing experts expected weakening global economics to deter companies from backing the Olympics. Many sponsors are locked in for the long haul anyway.

But marketing experts said sponsors would need to financially justify their involvement and ensure the Games are relevant to their brand.

Two global sponsors, Kodak and Lenovo, have already announced they will not be funding the 2012 London Olympics as they want to focus their marketing efforts elsewhere and two more—Johnson & Johnson and Manulife—are yet to recommit.

Sports agent Evan Morgenstein of Premier Management Group, whose athletes get corporate funding, said it was hard for sponsors to get value out of the Olympics but the lure was irresistible—if it was a fit with the brand.

“But just buying the rings is not good enough. They need to buy the rings and then spend about twice that amount again to aggregate it that is where the value comes in,” he told Reuters.

“London? Who doesn’t want to go to London? There is always someone who wants to date the pretty single girl and the Olympics is the single pretty girl.” - Reuters



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