What return from Olympic sponsorship?
Name the 12 primary sponsors of the Beijing Olympics. The only point of them handing over $100m each is to improve their brand awareness, so if you can’t name them now the starting gun has been fired, it doesn’t look like money well spent.
The answers are at the bottom but it is a quiz question British business should be pondering as it is asked to sponsor the London Olympics. On top of the £9.3bn taxpayers’ contribution to the 2012 games, some £2bn must be raised from broadcasting rights (about £850m for Beijing) plus ticket sales (maybe £200m) and sponsorship.
London is looking for sponsors to provide £650m and has found about seven companies to provide about two-thirds of that. But will these sponsors get value for money – or is there a tier of businesses that feels obliged to shell out money to prove they are national champions rather than looking for a financial return?
You can see why Adidas is chipping in well over £50m: it makes sense for a sports goods retailer to advertise at a sporting event. The fact that the German company backs dozens of Olympic squads plus rival football teams and international sides shows the company is marketing sportswear, not parading any patriotism. Good: that’s as it should be – though it must go through the Adidas minds that if they were not sponsors, a rival company would steal its place.
But what will French energy group EDF get out of sponsoring the London games? Or Nortel? And BT, British Airways and BP look like they’re in there to prove they are big and British rather than for commercial return.
Lloyds TSB pledged its £50m before the credit crunch: even though it is hit less than other banks you have to wonder if it would make the decision now, when every penny counts and the dividend is in doubt. And how does BA justify increasing its overdraft for the Olympics other than to keep out other airlines?
Bravaro decisions that might have been acceptable in 2007 could look wasted money once the recession bites.
Not all those £50m pledges are cash: BP is supplying fuel for the London Olympics fleet, for instance, and BA chucking in flights. But will you fly BA because it is linked with the games? Or buy BP petrol because of the link? Or install a BT phone? A lot of people have to answer yes to make £50m look a good investment.
The 2012 games will last just 19 days. These sponsors can exploit their connection in the weeks beforehand – though that requires additional advertising spend – but when the Olympics end the benefit ends too.
It seems a lot of money to blow over a short time unless consumers think better of the product for a long time. But for that, they have to notice who the sponsors are. How did you do?
The Beijing dozen are: Coca-Cola, McDonalds, Kodak and Visa (usual suspects), GE (it owns the NBC broadcaster), Omega (timekeeper), Samsung, Panasonic, Johnson & Johnson, Lenova, Manulife and Atos Origin. Value for money?
