Sponsorship issues facing the 2008 Beijing Olympics

As the 2008 Beijing Olympics approach, and as athletes work to attain their scientifically scheduled peak physical form, corporate sponsors are gearing up for a different battle. Having invested in the Games and tied their brand strategy to the Olympic theme, they must now guard jealously this positioning in the face of ‘ambushers’ – direct competitors striving to catch an illicit ride on the Olympic wave by deceiving or confusing consumers into believing they too are official sponsors.

The term ambush marketing was first coined by Alan Bayless in 1988 to describe the false association by a company not sponsoring an event with a view to derive similar benefits as official sponsors do. Early examples of this questionable strategy include Wendy’s appropriation of the Lillehammer Winter Games at the expense of McDonald’s, American Express’s efforts to outshine official Olympic sponsor Visa, Quality Inn’s ambushing of Hilton, as well as Nike’s attempt to appropriate the 1996 Atlanta Olympic Games from official sponsor Reebok.

This type of activity is not confined to the Olympics, however. Incidents of ambush have occurred at many major events ranging from World Cup and European soccer championships, to a broad range of sports such as tennis, rugby, cricket and cycling. On a global scale, ambush marketing has been most prevalent in the beverage (e.g. Coca-Cola and Pepsi), credit card (e.g. American Express, MasterCard and Visa) fast food (e.g. Burger King, McDonald’s and Wendy’s) and sports apparel (e.g. Adidas, Nike and Reebok) industries. In all cases, ambushers have aimed to enhance their own brand equity, at the expense of official sponsors, by illegitimately associating their name with the positive brand equity of the target sport or event.

Despite the best efforts of the International Olympic Committee and other major sports properties across the globe, ambush marketing has plagued the area of sponsorship for close to 15 years.

This article is based on findings from a recent study spanning four continents. The field research reported here sought a better understanding of ambush marketing from the perspective of both legitimate parties (sponsor and property) in the sponsorship partnership. (The term ‘property’ is used here to describe any organisation [e.g. the NFL or Manchester United], event [e.g. Super Bowl or Soccer World Cup] or athlete [e.g. Tiger Woods or David Beckham] in which a sponsor invests as part of its marketing and communications strategy.) In particular, we sought to clarify how ambush marketing was perceived and, most importantly, how to identify its strategic implications.

What exactly constitutes ambush marketing?

Our respondents defined ambush as a quasi-parasitic appropriation of the brand value of an event by competitors who time a purposeful use of the sport theme during and around the event they seek to ambush. Interestingly, our panel of experts did not consider the regular use of sport imagery by non-sponsors as blatant or unethical. On the other hand, if competitors time their communication strategy in such a way that the sport theme is used particularly during or around the event, then the intent is clearly to ‘steal the show’ and hence, this tactic constitutes ambush.

However, the multilevel complexity of sponsorship, particularly the potential of sponsorship deals for individual athletes, teams, a league (or cluster of related events, for example NASCAR), an event (e.g. World Cup), and the telecast of that event, make this distinction a subtle and, at times, invisible one. Determining that a competitor should not use particular words or visuals may be easy enough – for example the Olympic rings, symbol and motto, and a class of ‘protected Olympic words and expressions’ such Olympic Games, Olympic, Olympiad and their plurals. And, rightly or wrongly, it has also been possible to impose even greater protection, as when Qantas, an official sponsor of Ian Thorpe and Cathy Freeman, was precluded from advertising this fact in 2000, because Ansett Airlines had signed a sponsorship agreement with the Sydney 2000 Games. But, ultimately, a sport property cannot claim to own (or be able to bestow on its sponsor) the generic value associated with a sport. As a result, there will always be an opportunity for some degree of ambush to occur. As one of our property respondents readily acknowledged, “FIFA does not and will never own soccer or all the thematic space around it.”

Clearly, media exposure, exclusive naming rights, legal clauses and policing of breaches may help protect sponsors’ position and expected brand equity gains. The degree of protection, however, is neither comprehensive nor assured. Other than the more obvious breaches of copyright or trademark, legal action (or the threat of legal action) has been a limited deterrent when stacked against the ambusher’s potential gain.

Furthermore, there is no clear evidence as to why consumers incorrectly identify sponsors of major events – although it is known that consumers heavily involved in the event stand a greater chance to be confused about who is the sponsor, particularly when the ambusher is a market leader or a highly visible competitor.

Trends in ambush marketing

Sponsorship professionals may ponder the boundaries of ambush, but they are in no doubt about one thing: ambushers are getting smarter. Despite legal restrictions and increasingly tight controls imposed by properties, governments and the sponsors themselves, competitors determined to create a false association between an event and their product or brand are now capable of doing so without infringing or breaching trademark or intellectual property laws.

Some major ambushers employ teams of lawyers themselves to understand just how far they can stretch the association without overstepping legal boundaries. Other less overt ambush strategies (which some don’t even consider to be ambush) can significantly diminish the return for the sponsor. These include non-sponsors developing long-term plans incorporating, among other things, the ongoing promotion of athletic themes and images far in advance of the event itself, albeit with the event and related sponsor activity squarely in their sights. Alternatively, it might involve endorsement contracts with young talents thought likely to compete and succeed at leading sports events in the future.

Many of the sponsors we interviewed have tried to match ambushers’ increasing sophistication, and maximise their own investment, by building their long-term marketing strategies around the sponsorship investment. Perhaps not surprisingly, major brands such as Budweiser now devote the lion’s share of their total communication spending to sponsorship and related promotional activities.

A related response has been to avoid the fragmentation of sponsorship budgets by securing fewer, higher impact exclusive sponsorship arrangements rather than playing second fiddle in a long list of deals. It is no coincidence that major events are now encouraging fewer but bigger sponsorships.

Many sponsors and properties also employ what we term ‘name and shame’ as a means to regain consumers’ support and to undermine ambushers. In the campaign by Wendy’s to feign a sponsor role, Olympic officials were quick to appear in front of the media to denounce such practices, pointing the finger at Wendy’s and calling upon consumers to see through their attempt. In the future, sponsors may not need to resort to such tactics, however, if their alignment is so effective as to create the impression they have the absolute right to be a part of the cultural space generated by the sport and the event. In this scenario, the ambusher may actually magnify, rather than harm, the sponsors’ position.

Who is the sponsor’s protector?

The issue of who is responsible for protecting the sponsorship is one that enjoyed a fair amount of consensus among our world experts. In order to provide value for their sponsor, properties must be at the frontline, fending off ambushers by all possible means at their disposal, be it law enforcement, provision of exclusive and naming rights, or even by their deliberate exclusion of sponsors’ competitors at any other level of the sponsorship to avoid possible confusion.

Effective and proactive protection against offenders is seen by many properties (and their sponsors) as one tangible way of delivering value to a sponsor who has typically invested large sums in the expectation of some form of positive impact in the marketplace. As a result, some properties use their determined and energetic treatment of ambushers as a way of demonstrating the additional value they bring to the partnership. Most properties, for example, will take steps to prevent even the slightest digressions in and around the sport arena and will act mercilessly to stamp out any attempt by ambushers to steal the light away from the official sponsors. Efforts to reduce the number of sponsors and to make them bona fide partners for the long-term is one strategy used by properties to enhance their capacity to defend sponsor entitlements. Increasingly, the promise by the property to the sponsor is one of value creation and mutually beneficial relationship.

The prominent ‘protector’ role ascribed by sponsors to properties in the battle against ambushers needs to be complemented with what is now a well-established rule: sponsors must actively leverage their role with meaningful marketing communication if they are to maximise their investment. Obviously, in order to be effective with target audiences, sponsorship must first be known. Even the best event will not deliver much to sponsors who do not promote their involvement. The willingness of sponsors (aided by properties) to secure broadcast advertising time during and around an event, in conjunction with event sponsorship, is a critical step in proactive ambush management. Unfortunately for sponsors who bemoan the increasing budgets now required for sponsorship, the best protection against ambushers is to allocate more money for direct communication of the sponsorship to consumers.

Leveraging the sponsorship through legitimacy

When discussing ambush, issues of legitimacy, while not explicitly stated, were often close to the surface. Are ambush marketers’ efforts justifiable? Do consumers perceive them in a negative light when they become aware of these practices? Can sponsors really claim exclusivity for events or is the association they create spurious and, therefore, open to any competitor willing to emulate them?

Herein lies a crucial insight into the ambush predicament and what should be a sponsorship imperative. Evidence has shown that sponsors who continue to secure handsome benefits from their investments are those that can convince and capitalise upon the legitimacy of their association with the event. While some degree of legitimacy may come from having ‘paid for the right’, the reality is that it stems mostly from a credible association with an offering (sport). Sports events have a natural cultural fit with target consumers, and sponsors need to establish a position that is complementary, or congruent, to this space.

Many possible sources for legitimacy exist, not least a long historical association with the sport or property – ‘we were there then, we are here now’. This renders the sponsorship more credible in the eyes of the consumers. In this way, when sponsorship is considered as a long term co-branding partnership, it can contribute to the creation of the sort of ‘heritage’ described by David Aaker (2004) as essential in defining a brand. Crédit Lyonnais and Le Tour de France have been able to mingle their respective histories and celebrated together the 100th race in 2003, as if their association had also started a century ago.

Likewise, while Mars has little claim in terms of endurance running, a long and repeated involvement as sponsor of the London Marathon eventually ensured its acceptance by consumers as a brand legitimately linked to the event. That Coca-Cola has been sponsoring the Olympic Games from the early years of their modern revival goes a long way to explaining why a soft drink fits with an event focusing on physical performance. Such legitimate positioning may also deter would-be ambushers concerned that their attempted involvement may spark rejection and even strong negative reaction from consumers.

Indeed so strong can the ties of legitimacy become that they may well survive the contractual term of the sponsorship. Long after Foster’s stopped sponsoring the Australian Formula One Grand Prix, consumers still ‘recalled’ Foster’s as the sponsor of that race. For associations that span decades, there is no doubt that some sponsors have assumed natural ownership of the event in consumers’ minds. Eventually, the alignment may become so strong as to virtually preclude discontinuation. After more than 50 years (half the life of the event) of sponsorship of Le Tour de France, it would be hard to imagine the winner in anything else than the yellow jersey and extremely unlikely for any other company than Crédit Lyonnais to benefit from the daily dose of yellow splashed all over the news.

Perhaps more direct and influential, however, is the legitimacy derived from the natural congruence between the product or brand and the specific activity at the core of the event. An engine fluid or tyre brand would be a legitimate sponsor for a car-racing event, and based on this ‘legitimacy’ the sponsor can build and activate an association that is more meaningful to the consumer.

Defending co-brand equity in the face of ambush

The findings, and reflections, from this research highlight that while still a real threat, ambush may not necessarily be as dangerous to legitimate sponsors as in the past. In fact, market-driven sponsors may even use ambushers’ attacks to their advantage by drawing attention to issues of legitimacy, by enhancing perceptions of their brand or corporate authenticity, and by appealing to consumers increasingly wary of ‘fake’ or disingenuous brands. The findings also confirm the potential for sponsors and properties to form purposeful co-marketing alliances to optimise sponsorship outcomes and prevent ambush and, in doing so, secure and protect the brand value derived from the investment.

While legal activity to counter unofficial association will continue in earnest, so too will the irresistible attraction of ‘getting something for nothing’ through ambushing. Sponsors will be well-advised to assume that ambush will be tried in some form and to use this scenario to ‘out ambush the ambusher’. This also pertains to potential sponsors considering the investment. This is not to suggest that sponsors become too preoccupied with competitors or potential threats. Rather they should pursue a proactive, comprehensive approach to sponsorship planning and activation to insulate against ambush and to protect and grow their association with the property. This strategy would include a full and frank appraisal of issues of legitimacy, and the prospects for activating those attributes that underline authenticity. Ultimately, a multilayered activation strategy leaving little doubt as to who is the official sponsor (and what the property means to the sponsor’s brand) is the best defence (and offence) in the fight against ambushers to secure optimal benefit for the legitimate sponsor.