Chinese Sponsors Reviewed

Recognizing a gap in studies of Olympic marketing ahead of the 2008 Games, Asian marketing agency R3 and Chinese media research firm CSM Media Research launched an independent tracking and research division. Its quarterly studies have shed light on which Olympic sponsors are winning and losing on the ground in China. R3 Principal Greg Paull, who’s leading those studies, sat down with SportsBusiness Journal staff writer Tripp Mickle to talk about the results.

Which one of the TOP programs have been the most successful?
Paull: I think, for Coke, the torch relay has been a phenomenal success. Look at sampling. No one knew in China that Coke had to be cold. So what have they done for the torch relay? They’ve served up 100 million Cokes to people - one by one through 112 cities. That discipline is going to completely change the way Coke goes to market in China, and it wouldn’t have happened without the Olympics.

Any others that stand out?
Paull: J&J did a great setup in primary schools to teach them about the Olympics. You would expect the government to do that, but J&J came up with the training tools, the posters, the stickers and all of that stuff. They went into 400,000 schools across China to teach them about the Olympics with J&J-branded materials.

Who is winning the sneaker war category here on the ground among Nike, Adidas and Li Ning?
Paull: Our view is that if Adidas did not sponsor the Olympics, they would have been in a lot of trouble because Nike and Liu Xiang is a powerful combination together and if they had that sponsorship, they would have leveraged that. Meanwhile, Li Ning is Mr. Olympics, so if he’d had the official sponsorship he would have done a lot. Adidas did the right thing to invest because if someone else had it, they would have been struggling. They are, in fact, in first position in our study. (We have several clients in the sneaker war category and we do our study anyway regardless of our clients.)

How are some of the Chinese companies that people in the U.S. may be less familiar with doing?
Paull: A lot of local companies have done very well, better than the multinationals. Yili, Lenovo, China Mobile - all of these are in the top 10 in our studies, better than Visa, McDonald’s, J&J.

Which of those stand out most?
Paull: Yili, a local milk company, has done a great job. They’ve grabbed the right athletes like Liu Xiang and used them in a very creative way. They tried to do their own version of a torch relay. They ran a health tour that went to 100 cities around China, set up a booth and gave away samples. They also turned that into a TV show.

When the Olympics close, what will be the legacy for sponsors? Are sponsors going to be entrenched enough?
Paull: There will be winners and losers. We’re coming back in November to do the rest of our study. A lot of legacy also will be internal. The way they work will change. They’ll be better marketers as a result of it. You’re talking now about a competitive marketplace that has changed.

From Sports Business Daily

Puma backs 'Bolt' to beat big boys.

Puma is watching its sales to go up another notch as the ‘Lightning’ Bolt wins the men’s 200-metre final in Beijing’s Bird’s Nest stadium this morning.

The German manufacturer’s sneaker sales were reported by the Financial Times to have increased by more than two million pairs just one hour after the world’s fastest man held up his Theseus II spikes before the flashing cameras after his perfect run.

“There definitely has been an increase in awareness,” said store manager Margaux Brown. “A lot more people are coming in, a lot more people are calling us. I even received a call from a lady in England a while ago.”

Puma’s investment might well have been worth the wait. The sports gear manufacturer has been a long-time sponsor of Jamaican athletes, claiming among its first, Jamaica’s sprint queen Merlene Ottey and double silver medallist Juliet Cuthbert in the 1990s. It has, however, only been a sponsor of the Jamaican track team since 2002.

Puma arrived in Beijing nowhere near rivals Nike and Adidas in terms of market value and sales, according to the Financial Times, trailing in the number of Olympic athletes contracted to wear its apparel, and behind in the race for a share of the lucrative Chinese market.

But Puma came out the star in the most anticipated showdown in the Olympics, and probably the most watched sporting event this year, when the Puma-clad Bolt defeated Nike-signed Asafa Powell. World champion Tyson Gay, signed to Adidas, failed to make it to the final.

UK's Golden Girl Set for Sponsorship Success

From the Guardian

Rebecca Adlington's double gold medal success will ensure her lucrative earnings from sponsorship and endorsement deals, with her potential boosted by the fact the Olympics are coming to London next, say experts.

Kevin Roberts, editorial director of sports-industry analysts Sport Business Group, said Adlington's success could not have been better timed. 'I don't think any British athletes since Coe and Ovett have had the same platform as these guys have as we build up to 2012,' he said. 'The coincidence of it being London's Games next means there is an enormous spotlight on these people.'

He added that sponsors of the 2012 Games would all be looking to sign up British Olympians as their ambassadors, and that Adlington was in pole position. 'She appears to be an extremely engaging and articulate person,' he said. 'And those are the qualities sponsors look for in a really big way. It's not just a question of being a winner in the pool, or on the pitch. The people who will really make money are those that have sporting prowess and a personality to match. So she has got more opportunity than any previous generations of swimmers have had.'

Olympics helps Russian Sponsorship Growth

In Russia, the relationship between sport and business has been one of patronage than partnership, meaning that sport clubs and personalities are often dependent on sugar daddies or state corporations, and Russian athletes miss out on the lucrative advertising contracts enjoyed by their well-heeled counterparts in Western Europe, America or East Asia.

Now, led by a wave of sporting success, a consumer boom and increasing advertising savvy, that mentality is starting to change.

Whereas in the United States, 15 percent of advertisements use celebrities, with the figure rising to around 40 percent in East Asia, in Russia the total is a miniscule 2 percent. But the volume of contracts is set to shoot up from $60 million in 2007 to about $200 million this year.

That means that come autumn, the country should be festooned with pictures of victorious Olympians, promoting everything from washing machines to mobile phones.

Omsk-born Alexei, 24, won gold in Athens four years ago and has a number of sponsorship and endorsement contracts with Russian companies, his father said. His first fight is scheduled for Monday.

"The number of companies and the interest has increased since the last games," he said. "It is not a massive increase, but the amount has gone up steadily."

Many Russian sportsmen and women will be looking for inspiration to their compatriots who have made it big on the international stage and forged a global name for themselves. All follow in the wake of golfer Tiger Woods, who looks set to become the world's first billionaire sportsman over the next few years.

"Once the Olympics are over, the winning athletes will be looking at average contract from $50,000 to $200,000," Kormilitsyn said. Athletics and boxing are the most profitable Olympics disciplines, and firms from the telecommunications and banking sectors are keenest to cash in, he said.

It's not just for the athletes that this year's Olympics represents a potential boom time. China has spent $42 billion getting the country ready, and income from both broadcast rights and sponsorship are soaring.

As they set out to crack the mammoth Chinese markets, companies are betting big on Olympic sponsorship.

From 2001 to 2004, sponsorship made up just over one-third of total revenue for the Olympics. Fees for broadcast rights account for just over half of all revenue during that period. Organizers estimate that the Beijing Games will bring in over $1.7 billion in broadcast rights.

But although they get their equal share of the central pot, the Russian Olympic Committee has lagged behind many of its counterparts in other countries.

Compared with the lengthy list of major corporate sponsors on the glossy web site of the U.S. Olympic Committee, the list of corporate sponsors for the Russian team is dominated by state firms, such as VTB, Sberbank and Aeroflot.

VTB is sponsoring the men's volleyball, women's basketball and gymnastics teams.

"They're the most promising. We think they will win," said Vasily Titov, deputy chairman of the VTB bank management board. "We want to be associated with the leaders." The bank has featured the basketball players in advertising campaigns.

From The Moscow Times

Are Olympics Sponsorships Worth It?

An article today in Business Week, suggests that for some blue chip brands, the answer is no. High profile sponsors who are supporting Beijing, but not prepared to sponsor future games include Kodak, Lenovo, and J&J.

The Lenovo example is pretty self-explanatory. Its sponsorship of the 2006 Winter Games in Turin and the 2008 Summer Games in Beijing will be a one-time shot for the Chinese PC maker. For Kodak, a sponsor of the games since 1986, the returns just aren't there. Antonio Perez, CEO says "It's just not the best way for us to spend our money."

While China is seen as an opportunity to get a brand in front of millions of new consumers, some research suggests few consumers even notice who is backing the Games. In a survey of 1,500 Chinese city dwellers earlier this year by London's Fournaise Marketing Group, only 15% could name two of the 12 global sponsors, and just 40% could name one sponsor: Coca-Cola. Adding to the confusion for consumers are 21 additional national-level sponsors, including Adidas and Volkswagen.

Others see it differently. Coke has signed on through the 2020 Games. "Coke has not in the least reconsidered its Olympic sponsorship," says Kevin Tressler, director of Coke's Worldwide Sports & Entertainment Marketing.

The Chinese games potentially offer a unique set of circumstances to sponsors. As well as restrictions in the IOC charter that ensure nonsponsors' ads are restricted in and around Olympics venues, Beijing has extended the ban to all outdoor advertising in the city's airports, buses, and billboards within the city center.

In recent games, the debate as to whether to sponsor the officials of the IOC and host government or the competing athletes has probably come down on the side of the latter. Nike especially have made much of the fact that their shoes are won by the gold medal winners while official sponsor Adidas shows are worn by the men in suits. However, in China, things are different. Government officials will notice which companies show up in support even if consumers don't, a major factor for sponsors in a country where guanxi, or relationships, are such an integral part of doing business.

London 2012 will be a different story. Marketers will have to weigh whether there are more cost-effective ways to reach consumers and leverage Olympic enthusiasm without having to pay the high price. Frank Vial, strategy director of branding agency Landor Associates, argues that in a world that's moving toward targeted marketing, "maybe the Olympics will have to reinvent itself as something other than a global, monolithic brand."

Measurement becomes Mainstream?

One of the promises of an integrated digital media offer, powered by the Internet, has been tons and tons of useful measurement that can be used to make content relevant and advertising efficient.

Most companies don't actually use this data. They make users fill out registration forms, collecting information about gender and age and postal code, with an implicit undertaking to provide a more customised experience, but in reality this data is rarely used.

There have been notable exceptions. You probably don't want to know the level of detail about your habits resides in the Google databases. Bolt.com, one of the early Social Networks employed a team of statisticians to analyse teenage behaviour that was then sold to blue chip marketing brands.

Now the big-boys are waking up, perhaps. NBC have announced that they will use next month's broadcast of the Olympics to research how their audience consume media across several platforms including mobile (cell phones).

The 'billion dollar research lab' may go towards producing what NBC calls a "TAMI" -- Total Audience Measurement Index, which takes into account TV, online, video on demand and mobile phone usage. It may eventually be used to negotiate deals with advertisers across several platforms at once.

2008. The technology is available. The knowledge is available. And yet, words like 'eventually' and 'may be' are still used. Perhaps content providers don't want to know that nobody is watching or that the advertising is not relevant.