Tag Archives: olympics

Why We Said NO to Sochi

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As many of you may know, Performance Research founders Jed Pearsall and Bill Doyle have been consistently attending & analyzing the on-site activities at Olympic Games for over 30 years.  In fact, Jed’s first Olympic event was “Miracle on Ice”- the legendary USA vs. USSR hockey game held during the 1980 Lake Placid Olympic Winter Games, where Jed’s Mom bought the tickets from a sidewalk scalper for just $25 each. 

Since Lake Placid, Jed has attended 13 out of the last 15 Olympic Games (Winter & Summer), with Doyle attending eight of his own.  This bi-annual pilgrimage has been a mix of business and inspiration, allowing us to provide observations and insights to sponsors worldwide, while also being reminded of how lucky we are to work in such a fascinating industry.

However, starting with the controversial and antagonistic laws against gay rights propaganda passed by the Russian government, we both felt we could not, in clear conscience, attend these Sochi Games.

Now, following weeks of reports of possible terrorism, U.S. Department of State warnings, reports of the near certainty of computer hacking against any and all devices brought into the country, and most recently the U.S. Department of Homeland Security bulletins to airlines warning of the potential threat of explosive materials being contained in toothpaste tubes, we are convinced more than ever that we made the right choice.   

Apparently we are not alone–  just yesterday TMZ reported that AB-InBev is not hosting its traditional “Club Bud” party at the Olympics, suggesting that the threat of terrorism is just too large even for corporate America.

While we are disappointed to not attend the Games, we are proud of our integrity that drove the decision.  And, we will always question the rationale of the IOC (especially when we could have been headed to competing bid city Salzburg, Austria right now instead of staying away from Sochi).  So for this Olympic Winter Games, for the first time in nearly three decades, you will be reading Performance Research updates (now tweets) written from the viewpoint of our couch instead of from the bleachers.

See you in Brazil!

More Links:

http://www.cnn.com/2014/02/06/world/europe/russia-sochi-winter-olympics/

http://abcnews.go.com/blogs/headlines/2014/02/sochi-visitors-report-hotel-horrors-dangerous-conditions/

http://www.globalpost.com/dispatch/news/regions/europe/russia/140203/6-openly-gay-athletes-sochi-olympics-russia

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Lack of Funding for US Speedskating Offers Huge Sponsorship Opportunity

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A recent USA today article highlights the plight of Olympic aspirants that struggle just to make ends meet.  Olympic short-track speedskating hopeful Emily Scott’s story is highlighted.  She has seen her monthly direct athlete stipend cut by nearly 70%, forcing her to take on the third-shift at a surgical supply factory and apply for food stamps.

Scott’s predicament is not an isolated one, however, as many other Olympic hopefuls are forced to live paycheck to paycheck.  Outside of a few skiers and snowboarders with lucrative sponsorship deals, other winter athletes endure the same kind of financial struggle as Scott.  The US Olympic Committee can only do so much for its athletes, and naturally allocates funding to the athletes with the greatest chance of standing atop the podium draped in gold.  Other athletes are left to fend for themselves as their direct stipends continue to decrease. 

The limited funding the USOC distributes to the lower-profile winter sports provides an ideal opportunity for resourceful sponsorship.  Funding sports like speedskating or bobsledding offer potential sponsors a cheaper method of becoming officially affiliated with the Winter Olympics that can do wonders for their public image.

Prior research conducted by Performance Research consistently suggests that companies who fund struggling Olympic teams hit emotional trigger points with consumers that make the venture a worthwhile one.  Olympics-related sponsorship is particularly good at generating good will, and companies who fill voids such as this one are viewed as altruistic and patriotic leaders in their field. 

US Speedskating currently boasts a 15-member sponsorship roster, but there remains plenty of room for any corporation looking to become an official Olympic sponsor on the cheap.  The domestic speedskating governing body has seen the money it receives from the USOC for direct athlete support cut by about $15,000 from last year.  This is particularly surprising because speedskating is historically USA’s most successful winter sport.  Not only will forthcoming sponsors be perceived as charitable, but their brand will also be associated with athletic success of the highest order.    

Before Tuesday, Emily Scott has raised $195 on her crowdfunding site, gofundme.com.  Since the USA Today story broke, she has raised $35,498 and counting.  This is a testament to just how impactful a new corporate sponsor can be not only to US athletes, but also to consumers across the country.  If people are willing to empty their pockets for an Olympic athlete in need, imagine their perception of a company that would do the same.

It is astonishing that additional sponsorship of US Speedskating is yet to emerge.   To any companies thinking about pulling the trigger on this type of deal: please fire away!  Opportunities like this to generate progressive public sentiment are hard to come by.  Our research suggests that you will not regret your decision.

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Army Pulls Out of NASCAR Sponsorship

The US Army, a presence in the NASCAR experience for nearly a decade, recently announced that it will no longer sponsor a NASCAR team as part of its branding and recruitment efforts. At one point the Army was a primary sponsor of NASCAR. They moved to Stewart-Haas Racing to sponsor Ryan Newmann in 2009. In exiting their sponsorship of SHR, the Army is effectively cutting its sponsor relationship with the motorsport indefinitely.

It’s big news made bigger by the fact that the move comes just days before the House takes up an annual spending bill that includes language intended to prohibit military sponsorship of sports.

The language in that bill is a result of an ongoing effort on the part of Reps. Betty McCollum (D-Minn) and Jack Kingston (R-Ga) to ban the spending of defense dollars on sponsorships (they’ve targeted NASCAR sponsorship in particular). We’ve been following this political initiative with our Sponsor Eye since Rep. McCollum took up the issue in 2010, and subsequently lost a House vote to keep the military out of sport sponsorships in 2011. You can see some of our tweets about it here and here, with links to Wall Street Journal and USA Today pieces.

While we can’t be certain that the bill is the whole reason the Army made its decision to pull out of NASCAR, we have a hunch it played a not-so-insignificant role. In any case, it’s an issue worth our two cents.

Let’s look at the Reps.’ argument: they assert that the approximately $136 million sliver of the defense budget spent on sport sponsorship is wasteful, as it doesn’t garner enough return in recruitment numbers.

Before moving forward, can we take a step back and look at some math?

The 2012 Department of Defense spending budget is around $707 billion (that’s billion with a B). At $136 million allocated for sport sponsorship spending, Reps. McCollum and Kingston are making a big fuss about a %.02 savings. And at only $8.4 million going towards NASCAR sponsorship specifically, it’s an even smaller margin. With government spending at an all-time high, going to battle over such teeny savings seems pretty petty.

Decimal points aside, who are two politicians with absolutely zero background in sponsorship effectiveness to say that military sponsorship of sport — in particular, NASCAR — is ineffective on the grounds that the recruitment numbers aren’t there? The Army has exceeded its recruitment goals every year since it started its relationship with Stewart-Haas Racing. But that’s almost beside the point.

Having been on the inside of researching military sponsorships, we have seen enormous opportunities and in some cases, very strong return on objectives —but maybe the Reps aren’t focusing on the objectives that really matter.

The goal of a sponsorship is never about sales, or recruits, or numbers alone. Putting a  logo on the side of a race car isn’t going to suddenly bring a spike in sales or enlistees. Humans are more complex than that. Sponsorship is more complex than that. The Army’s relationship with NASCAR is — or at least, should be — about building national awareness and an emotional connection with fans, and not necessarily only those fans who are in their target recruit demographic of 17-24 year old males. There are older and younger siblings, parents, teachers, and coaches who love NASCAR, and who influence the life and career decisions of those they’re close to. When the Army builds an emotional connection with NASCAR fans, they’re not only reaching the people who show up at the event. We’d be interested to see if the sponsorship effectiveness report that influenced the Army’s decision took the more emotional side of the partnership into account, and looked at the Return on Relationship that NASCAR sponsorship is best at.

When government officials recently questioned the value of so-called “junk food” sponsors involved with the Olympics we were left thinking the same thing: politicians should stick to legislation, and stay out of making calls on sponsorship.

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Is Touting Past Relationships at Opportune Times Ambush Marketing?

The Performance Research team always has sponsorship on the brain — even when we’re shopping for cereal! We recently snapped photos of two cereal brands shelved side by side at our local grocer. The sight immediately caught our “sponsor eye.”

Quick, which of the cereal brands below officially sponsors the Olympic Games?

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If you said Wheaties, you’re forgiven — but mistaken.

With a quick glance, it seems as if both of the cereal giants could be sponsors of the Olympic Games. But look closer. The Kellogg’s box has the iconic Olympic rings logo emblazoned on it, along with language (“official sponsor”) that ties them directly to the Games. The Wheaties box? Not so much.

That’s because Kellogg’s is the official cereal brand of the United States Olympic Committee (USOC), and their Corn Flakes box is part of a marketing campaign driving home that official sponsorship to consumers. Wheaties, on the other hand, has no current official relationship with the USOC or the Olympic Games.

The re-release of past Wheaties boxes featuring Olympic champions at such an opportune time — leading right up to the 2012 Summer Games — could be considered ambush marketing, a tactic that can be cause for concern for those official sponsors (like Kellogg’s) who spend millions of dollars on officially associating their brand with the Olympics.

It’s a recurring issue. Olympic season after Olympic season, unofficial “supporters” of the Olympics elbow their way into the top of consumers’ minds as bon-a-fide Olympic sponsors by using ambush marketing tactics.

We conducted research during the 1994 and 1996 Games that lent insight into consumers’ perceptions of official Olympic sponsor brands. Often, ambush sponsors outpaced official sponsors (e.g., ambusher Nike vs. official sponsor Reebok) in terms of sponsor recall and belief that these non-Olympic companies were doing more than many official sponsors to support the Olympics.

More recently, we collected data after the 2010 Vancouver Games and found that ambush sponsorship marketing was still alive and well. In particular, Subway, who used Michael Phelps in a campaign leading up to the 2010 Games, was strongly associated with the Olympics that year even though they weren’t officially sponsoring the Games. So was Verizon, who used the U.S. Speed Skating team in ads surrounding Vancouver but had no official partnership in 2010. Full details of that report can be found here.

The topic raises a lot of questions: is spending big bucks on official Olympic sponsorship worth it? Is it ethical to lead consumers to believe your brand is associated with the Games when there is no official sponsor relationship there? We welcome your comments on this one.

Also, a challenge: keep your eyes out for all of the official and not-so-official Olympic campaigns going on this month.  Send us your pics, we’d love to see what you uncover.

Just as we’ve done since the 1992 games, we’re planning to conduct similar research for the 2014 Olympic Games.  As always, don’t hesitate to send us a message or ask us questions if you want to learn more about what we’re up to.

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July 5, 2012 · 10:54 am

The End of the Stand-Off

The International Olympic Committee (IOC) and the U.S. Olympic Committee (USOC) finally reached a new revenue-sharing agreement that ends years of international  resentment harbored toward the USOC while it allows the USOC to lift its self-imposed freeze on bidding for future Games, a move it enacted after the 2016 Chicago bid fiasco.

For decades the USOC has received the biggest slice of the Olympic dollars paid by corporate sponsors and U.S. television networks, an arrangement the rest of the Olympic community has resented, and, in turn, one that has contributed to keeping the Olympics out of the U.S. in past years. The new deal, which will begin in 2020, mends this rocky relationship by reducing USOC shares of The Olympic Partner Program (TOP) sponsorship revenues and U.S. television rights. The USOC has also agreed to contribute to the IOC’s administrative costs.

Without a Games held in the U.S. since the 2002 Winter Games, the U.S. could be in the Olympic spotlight again in the near future. As the majority of TOP sponsors come from US corporations — Procter & Gamble, McDonald’s, Coca-Cola, General Electric, Dow Chemical Company, and VISA, to name just a few — this should be considered good news for future olympic sponsorship campaigns.

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Olympic Food and Drink Sponsors: Some Not “Lovin’ It”

Should properties only accept sponsors whose brand images align exactly with their values? Last week, the London Assembly gave their answer: when it comes to the Olympics, absolutely.

At their most recent meeting, the governmental body called for a ban on Olympic “junk food” sponsors — McDonald’s, Coca-Cola, Cadbury, and Heineken were called out specifically — citing concern that food and drink sponsors who produce high calorie or perceived unhealthy food and drink products undermine the values of the Olympic Games, and could contribute to the growing problem of obesity in the UK.

While the London Assembly might have their hearts in the right place, we think they need a super-sized serving of perspective.

First, let’s talk dollars and cents (or pounds and pence). According to a study conducted by official Olympic sponsor Visa, the UK will receive a huge economic stimulus from the Games worth an estimated £5.33 billion — a number that could have been significantly lower without the sponsorship dollars paid by McDonald’s, Coca-Cola, Cadbury, and Heineken, who all contribute to the Olympic Committee’s ability to make the Games a success. The boost the Games and its sponsors contribute to the UK economy far outweigh the possibility that their ties to the Games might persuade Brits to reach for some fries or a soda. We’re surprised that a governmental organization doesn’t get that.

And frankly, we don’t buy that companies like McDonald’s and Coca-Cola, who have received the most flack from critics, don’t exhibit values that align with many Olympic ideals. The notion that McDonald’s is nothing but a coronary-inducing beef patty and french fry slinger is an antiquated one. The global restaurant chain has made serious strides in offering up healthy options on their menu. More nutritious items — grilled chicken, entree salads, fruit sides, and low-fat dairy snacks — have been a big part of McDonald’s ability to succeed in the modern marketplace, and to some extent, may even have been inspired by McDonald’s early days of serving athletes at the Olympic  village. Those options will all be available for sale at the Games.

And Coca-Cola expects that over 75% of the drinks it sells at the Olympic Games will be water (Schweppes Abbey Well Water is a Coca-Cola brand and is the official water of the Games), juice, or sugar-free beverages. Again, the idea that Coca-Cola only produces syrupy fizzy soft drinks is misinformed.

The food service giant and beverage behemoth are also showing that they value the Olympic ideals of athleticism, unity, and excellence with Games-themed initiatives aimed at boosting physical activity. McDonald’s plans on giving away 9 million activity toys with their happy meals during the Olympic Games; Coca-Cola sponsored a “free swim” program in the UK in conjunction with their sponsorship.

And therein lies the real takeaway: McDonald’s and Coca-Cola know that an Olympic sponsorship is the perfect opportunity to drive home the fact that their brands can be part of an athletic lifestyle, and that as corporations they value the spirit of the Olympic games. Sponsorship isn’t always about brands selling the masses more burgers, sneakers, or car insurance.

Bottom line?: we think the London Assembly should leave sponsorship to the experts.

Oh, and London Assembly! It looks like Mayor Johnson agrees with us: Click here to watch a video clip of Boris Johnson inviting Americans to come to London to drink “fizzy drinks.” 

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