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

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

Etihad Credit Sponsorship for Growth

Four years ago, no-one had heard of Etihad, it was an infant airline. Now it is the world's fastest growing airline, and global marketing chief Peter Baumgartner says it has been sponsorship, not advertising, that has allowed the Abu Dhabi carrier to achieve growth of more than 40 per cent every year.

Many companies put advertising first, Baumgartner says, but the challenge of getting the name of the airline in front of millions of potential customers in dozens of markets required a special strategy.

The answer, he says, was sponsorship.

"We decided to spend a lot of our budget on sponsorship," he says. "Formula One is an example of how we have approached this strategically."

In 2007, Etihad was the sponsor of the Spyker Formula One team, but this year the airline has taken the plunge by linking its name with the biggest brand in the business, Ferrari.

Baumgartner says the fit is a natural one for a company that sees itself as innovative, cutting-edge and technically driven.

"Ferrari is a commanding brand and we felt that Ferrari would bring a lot to us. It all fits together."

The sponsorship-driven element of Etihad is very much strategic, but there also has to be a degree of opportunism in applying such a strategy, he says.

"We have been quite active in recent times and fortunately there have been a couple of opportunities.

"You have to grab these when they are around."

Another of those opportunities was the chance to link up with British football team Chelsea.

It may not be a motor racing team, but the sponsorship works in the same way.

"If you consider Chelsea, it works in a very similar fashion to Ferrari," Baumgartner says. "We are trying to take our Abu Dhabi-based brand to the world and that means more than just placing a logo on a team.

"We have managed internally to build quite a skilled sponsorship team.

"We have also been exploring sponsorship from the very first day." The success of that strategy was on show last month when the airline won the world's best marketing strategy award handed out by Airline Business magazine in Britain.

The magazine lauded the success of the brand's sponsorships, along with its consistent message from the time customers were picked up by its limousines to when they experienced its in-flight service.

Ferrari and Chelsea may be among the biggest sports brands in the world, but that has not stopped Etihad from making some more eclectic deals as well.

Baumgartner highlights the airline's sponsorship of the All Ireland Hurling Championships.

Although the sport may have limited appeal, the fact that the airline has taken an interest in the sport at all has created a bond with Irish fans of the sport, and this has fed back directly into Etihad's success.

"Next to giving us overnight fame in Ireland, hurling is a sport that is very close to the community and has great emotional links with the people of Ireland," Baumgartner says.

Etihad is an airline out to market itself, but he notes that it is also a marketing tool in its own right.

The airline was originally commissioned to help grow awareness of Abu Dhabi as a tourist destination.

A Ferrari-based theme park is under construction there and the capital of the United Arab Emirates hosts its first grand prix sponsored by Etihad later this year.

The strategy has helped to turn Etihad into the world's fastest growing airline, Baumgartner says.

"Getting back to the fact that sponsorship is more than just putting a logo on a shirt or car, the real value is when you tap into the community behind it."

From: The Australian

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."

Columbia's Tour de France sponsorship 'an unqualified success'.

A great article in 'The Orgeon' today about a last minute sponsorship deal that delivered great value for money.

The recent deal by outdoor apparel company Columbia to sponsor the Team High Road cycling team after previous sponsor T-Mobile pulled out due to a doping scandal resulted in Chief Executive Tim Boyle saying "The sponsorship was an unqualified success by any measure."

Despite initial objections from European managers, the deal to promote Columbia's Omni-Shade Ultra-Violet-ray-protection material resulted in results that were pleasing to management.

For one, Boyle said, the sponsorship boosted company morale. More importantly, statistical measures and anecdotal impressions suggest the team and its five stage victories thrust Columbia's name and the yellow-flared trademark of its Omni-Shade fabric into broad exposure in the prized markets of intense Tour de France fandom.

Although Columbia does not actually make cycling apparel, they still wanted to make the link between the fabric and the world famous cycling event. Columbia's sales and marketing team came up with the idea of placing "Omni-Shade" beneath the company's logo on the jerseys.

Columbia would not say how much it paid for the sponsorship, but industry experts say it likely cost more than $3 million -- much less than T-Mobile probably paid.

"No other team had anywhere near as many stage wins, which is what gets the majority of the daily coverage globally, and all the coverage in the rider's home market," Boyle said. "When you add in the coverage we're likely to get with the riders in the Olympics, this is better than a grand slam home run."

Columbia spokeswoman Leslie Constans said more than 11,000 articles in 85 countries mentioned Team Columbia in some fashion this month.

French and Spanish newspapers devoted more pages than ever, both in print and online, to this year's race, with Team Columbia's five stage-victory salutes figuring prominently, said Carlton Reid, owner of Quickrelease.tv, a U.K. cycling news Web site.

"You'd be hard-pushed to sponsor a minor soccer team for a season for the money Columbia would have spent on this team," Reid said.

Reid and others think Columbia's three-year deal will continue to pay dividends.

Think of a sport. Now think of an Airline.

A nice article in the Independent today about how Emirates have used sponsorship to create a household name in the UK.

As well as title sponsorship of the state of the art stadium for Arsenal football Club in north London, Emirates have added title sponsorship of a roundabout to their list of properties.

More interesting to me than the fact that the Concord Roundabout will now be the Emirates Roundabout is that sponsorship makes up 50 percent of the £150m Emirates spends on marketing, including advertising and public relations. This is up from a spilt of 90% to 10% in favour of advertising.

While the company gives an indication that they are looking for a 6-7 times return on investment, they admit that it is an 'exposure' model of sponsorship, counting logos and then comparing it with how much it would have cost if you had bought that space on television or in the newspapers.

Even for a big player in the sponsorship game, they admit "It's not too scientific, it's a finger in the air type of measurement. But when you sponsor quite a lot as we do, you get more than a gut feeling of whether the sponsorship is doing well or not."

Surely the digital age can bring more clarity than that!