Corporate sponsorship is effectively paying for the Olympic Games. But are the sponsors truly capitalising on the exposure?
Following a debt-ridden Games in Montreal in 1976, only two cities were interested in hosting the Summer Olympics in 1984: New York and Los Angeles. The future of the Olympic Games appeared to be in doubt.
Back in 1912, ten local firms purchased the rights to take photos and sell memorabilia at the Games in Stockholm. By the time of the Montreal Olympics in 1976, this had ballooned to 628 sponsors.
LA took a different approach and limited the number of sponsors. Assisted by burgeoning TV rights and a dominant performance by US athletes, the city was rewarded with a profit of more than $200 million.
The International Olympic Committee's reputation was restored and, learning from the experience, introduced 'The Olympic Partners' programme in 1988. Companies today recognise the opportunity to enhance brand awareness and favourability through Olympic sponsorship. So much so, that the upcoming London 2012 Games will see two-thirds of the organising committee's £2bn operating budget raised through sponsorship.
However, that's not to say that brands have yet mastered the art of sponsorship or effectively capitalised on what will inevitably be the most social Games in history, thanks to the explosion of social media.
The social Games
Sponsors increasingly run the risk of sacrificing their investment through a lack of coordination between their offline and online marketing activities.
According to social media analysis Olympic sponsor brands have not yet strongly associated themselves with the Games on Twitter. While many of these brands may console themselves with a plan to heighten marketing activity when the Games are in full swing, there is no guarantee they will be able to jostle for attention with the events and athletes themselves.
However, some sponsors will no doubt do better than others. One prerequisite for success is to understand the target audience and how they behave in certain environments. Whether or not companies plan to use social media, it can serve as an incredibly powerful and revealing focus group. Research into conversations on social media can reveal valuable insights into what consumers are thinking and how they are spending their money; enabling brands to understand what marketing techniques will make the greatest impact.
Our recent research into UEFA Euro 2012 sponsorship found that traditional offline marketing still grabs the lion's share of attention within social media. Although Euro 2012 sponsors ramped up their social media activity around the tournament, digital activations and apps generally failed to score big in producing active discussion about their brands.
Adidas generated the greatest volume of mentions for its sponsorship, with around one-third of these being opinion-led but it was the company's offline sponsorship activities that tended to drive these comments. The Tango ball, Golden Boot award and the football kits and boots designed by Adidas boosted favourable conversations and made the brand a natural fit with the tournament.
Given the ubiquity of all things digital, the assumption has been that businesses need a strong social media presence, whether it's appropriate or not. However, the research demonstrated that jumping on the social media bandwagon doesn't always deliver return on investment. Indeed the Adidas Tumblr page generated a low level of buzz and was mentioned fewer than 100 times, of which the majority were automated to share the news of its launch.
Facing the unknown
The rapid rise in social media use means the Olympic sponsors face a unique set of new and exciting opportunities but also potential threats to their reputation.
Today, many people use social media to judge and hold big business to account. Buoyed by this spirit, people are increasingly demanding authenticity in corporate behaviour and instigating tides in negative opinion when they suspect a mismatch between what a company is promoting online and their real values or track record.
The speed and ease with which social media allows people to express their frustrations in public, means that, what may start out as relatively minor issue or complaint against a brand, can quickly become amplified and reach a much wider audience.
Companies now need to think carefully about which events they do choose to sponsor. In the past, companies generally escaped criticism for sponsoring an event by virtue of its size and reach, as opposed to its fit with the company's profile and ethics. This is no longer the case, as evidenced by the criticism surrounding McDonald's sponsorship of the Euro 2012 tournament and the Olympics. During Euro 2012 McDonald's generated an especially high volume of user-generated buzz. However, the most prominent driver for conversations, the company's sponsorship of the Official Player Escorts, was not especially well-received within social media as a result of health issues associated with fast food.
Given the snowball effect, it is critical for companies under the glare of Olympic sponsorship to track conversations within social media, in order to address the spread of incorrect information and understand how these mentions are potentially impacting their brand. It's no longer a case of Chinese whispers. Rumours, speculation and fact are being aired to a mass audience on a daily basis.
Expensive truths
While social media has fundamentally transformed the face of marketing, some basic truths remain. Firstly, companies will succeed if they listen to their audience and monitor their behaviour in different situations. And secondly, the online and offline worlds are intrinsically linked. A company cannot project one image of itself online and another offline. In relation to both principles, when it comes to sporting events, where fans are often deluged by different emotions and distractions, the more obvious aspects of sponsorship (such as the official match ball used at a football tournament) are often most effective at getting people talking about them online. Given the amount of money that has been spent on Olympic sponsorship, this is an important lesson to learn upfront.