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Despite having secured long-term contracts involving multiple Olympics events, brand sponsors face an uncertain few months leading up to the still-expected opening of the Summer Games in Japan later this year. While the Japanese government seems obdurate in its plan to proceed, the threat of Covid spikes, stuttering vaccination plans and the possibility of barring fans (completely or just overseas attendees) will see brand leaders rushing back to the drawing board to reconsider their plans, according to industry experts.
The Olympics is a global event, not reliant on local attendees to keep its stature aloft. The last event, held in Rio Di Janeiro, saw some 5 billion people people tuning in, compared with 6.2 million tickets sold on-ground, and sponsors spent more than $848 million for the event. The rise of social media and streaming video services have only widened the interest in the games across the world.
The pandemic has caused Tokyo’s Olympics to be postponed by a year
However, the Tokyo games have been blighted, first because they were postponed due to the pandemic and then because of the resignation of its head Yoshiro Mori following sexist comments.
While rumours have continued to swirl over the event being cancelled entirely, organisers have considered a raft of other options to avoid this move, including various measures to restrict or ban in-person attendance. The Japanese Government has spent north of $3 billion dollars over the past six years to get ready for the event. The top-tier gold sponsors including heavy hitters such as Canon and Asics forked out $128 million each to be part of the games.
If the organisers are keen to proceed with the games, but may ban or at least curtail fan attendance, what does this mean for brands and marketers who have not only poured billions into the event itself but also planned their marketing years in advance?
In-person attendees do matter. For global brands, the Olympic Games are a showcase, like other top-tier business events, for CMOs and other business leaders to show off their brand. At the other end of the spectrum, a range of homegrown local firms have forked out an estimated $3 billion to be part of the event, a three-fold increase over the previous edition.
Michael R. Payne, chairman and CEO, Payne Sports Media Strategies, who has worked on 20 successive Olympics events (summer and winter) and is the creator of The Olympics Partner or TOP program that has managed $13 billion in partnerships, told Campaign Asia-Pacific that the reduction in in-person event attendance would hurt smaller, local companies more than global brands.
The Tokyo Games’ seeming lack of overseas attendees, potentially without an in-stadium crowd could push brand leaders to rethink their marketing plans. “Clearly with limitations on spectators, opportunities to win tickets, go to the Games, will have to be scaled right back,” Payne added.
He pointed to Alibaba working with the IOC on broadcasting via cloud platforms. Originally, this was only going to be a test for Tokyo, with less than 5% of the broadcast content being produced for the online platform. Covid has fast-tracked this to over 30%, and by Paris 2024 it will likely be over 70%. “This single change in broadcasting is being seen as the single most dramatic technological impact since introduction of satellites in 1964,” he added.
Alibaba declined to elaborate on its plans, as did most other brands we reached out to for comment. As the organisers dither over their plans for fan attendance, brands must be flexible, but appear to be waiting for a confirmation from organisers before acting.
“We have not received an official decision from them regarding spectators, and we are continuing our preparations to support a variety of possible scenarios in a safe and responsible way,” a spokesperson for Bridgestone said in a statement to Campaign Asia-Pacific. “As the IOC and Games organisers have publicly stated that a decision on spectators is not expected until late March or early April, we will continue to wait for official communication from them regarding any planning decisions.”
Bridgestone has been preparing for a variety of possible scenarios for Tokyo 2020 and continues to work with the IOC, IPC [International Paralympic Committee] and games organisers to seek “creative ideas for effectively and safely engaging fans and consumers through our hometown Games this summer,” the spokeperson added.
Experts we reached out to believe that even if in-person fan attendance is permitted, opportunities for brands to leverage their presence will be limited thanks to safety and travel bubbles and general wariness around the pandemic.
“Even if there are fans in the venues, interaction and opportunities for activation will be limited,” said Norman O’Reilly, director of the International Institute for Sport Business & Leadership and a professor in the School of Hospitality, Food and Tourism Management at the University of Guelph in Ontario, Canada. “Digital is the way to go [and] activations based on social media, esports, sport video games, fantasy sports, sports betting, and digital marketing will be the key to sponsor success. I would advise converting hospitality, experiential and on the ground activations to digital ones.”
Others argued that brands could ask increasingly difficult questions of the Tokyo games’ organising committee, given the change in sponsorship scope, with the possibility of overseas visitors being barred or even all spectators being prohibited. “There will be investment questions that sponsors will reasonably ask of the IOC and Tokyo’s Olympic Organising Committee, given that the scope of the audience will change significantly,” said John Davis, regional managing director for Duke Corporate Education and author of The Olympic Games Effect.
Sponsors may shift dollars to global sports such as F1 should the ambiguity over the Tokyo Olympics persist.
Already, sponsors of the games pushed hard to have Mori ousted as president, and as they begin to count return on investments on their ad dollars, they could have to take more hard decisions soon, these experts warned. While aligning their brands’ stories with the global games has traditionally been a good opportunity, hard-nosed CMOs may be compelled to turn to other global events ranging from Football to F1 to improve ROI.
One of the most interesting opportunities, Davis argued, will be how brands decide to create a sustained relationship with their audiences given the larger digital opportunity they now have. “In years past, the halo of the Olympics has dissipated quickly once the Games end, as audiences move on to other sports and entertainment interests. But this year brands have a chance to relate far differently with younger audiences to build longer, more authentic relationships that can be anchored in the Olympic memories yet carried forward into each person’s ongoing interests.”
Payne stressed that Olympics branding and sponsorship is a long-term opportunity. All of the TOP Partners are in for the long term, with many signed up through 2028, and Coca-Cola, Mengniu and Visa through 2032. “TOP Partners global activation is also focused on the Olympic brand, the Olympic values and team in each country—much of the benefit achieved well before the Games actually take place,” he added.
Rick Burton, the David B. Falk Professor of Sport Management at Syracuse University and former commissioner of Australia’s National Basketball League, believes brands will demand some kind of make-good offer from the IOC and the Tokyo games organisers, “They could say, ‘When you sold me the sponsorship, you led me to believe that there would be a million people that would see my involvement with these games. And now that’s not going to happen’,” he contended.
Having forked out hundreds of millions of dollars to help the postponed games happen, sponsors will now battle for their pound of flesh, he believes. This could be in the form of incremental benefit provided in social media or in televised media or it could be for some benefits at the next games in Beijing or Paris. “Undoubtedly these brand owners would say, ‘We’re obligated to our stakeholders or our stockholders, to deliver the value that we purchased’,” he added. “So, we anticipate that you will help us achieve our goals.”
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