A Marketing Boom or Bomb?
By Melissa Loovi
In a world plagued by wars and worries, it is natural that we crave a breath of fresh hope. Surely nothing bring us that much-needed gust better than the Olympic Games, that cherished ancient tradition that has survived through centuries of modernisation to become a symbol of sporting excellence and camaraderie the world over? It is indeed a much anticipated 16-days for the majority of people, irrespective of colour, creed or religion. But, and this is a big but, is that intangible magic still in the air?
With a theme like, “One World, One Dream”, you’d think that Beijing 2008 certainly would be everything humankind yearns for it to be. Unfortunately, though, China’s first time hosting the world’s biggest sporting event was plagued with troubles right from the start. Many countries and individuals felt that the Tibetan situation and ever-growing human rights concerns in China were so overwhelming that it was a wonder they even won the bid for the Games.
Yet China was determined to host the most spectacular games the world had ever seen; and certainly they have achieved that on a grand scale. The opening ceremony was the biggest and brightest of any Olympics with over 15,000 performers and it was spectacular with dazzling displays of artistic and technological wonder. The entire world watched in awe, only to find out the next day that the adorable little girl who so earnestly sang “Ode to the Motherland” was actually lip-syncing because the real singer (an older child) was deemed to be not adorable enough herself, due to having buckteeth.
And it didn’t stop there. While most people didn’t care that parts of the “live” fireworks display had been pre-recorded, there were much more disturbing revelations. Several days into the Games, word leaked out that a 26-year-old Chinese dancer had been seriously injured during a rehearsal for the opening ceremony and now faced the prospect of being paralyzed for the rest of her life. Liu Yan was considered one of the country’s top classical Chinese dancers and to sour things even further, the organisers initially asked witnesses and friends not to disclose the accident ahead of the Games, according to those who visited her in the hospital.
It was only after inquiries from several newspapers that members of the Beijing Organising Committee for the Olympic Games (BOGOC) visited Liu. Furthermore, most of the Chinese state-run news media did not report the accident. Zhang Yimou, the show’s artistic director and one of the country’s leading film directors, expressed deep sadness following a visit with Liu after the opening ceremony. But it all felt like too little, too late – especially from a marketing and PR standpoint.
56 IMPOSTORS
Just to add a little more salt to their wounds, more news poured out – those 56 cute children representing “China’s 56 ethnic minorities” were impostors, too. Apparently, the children were actors from an arts troupe and most of them belong to the Han ethnic group, the dominant ethnicity with over 90 percent of China’s 1.3 billion population. The plot thickens when one realises that the Chinese government is experiencing tense relations with much of its ethnic minority groups, and thus aimed to keep these minorities out of the global spotlight.
China seems to keep shooting itself in the foot, despite efforts to the contrary. As the UK’s Financial Times phrased it, “Rather than announcing China’s arrival as a modern, dynamic country, they (the BOCOG) risk reinforcing the view that the Beijing government is comprised of control-freaks.” Harsh words, and perhaps we’re all being a little too hard on China as this was only their first time hosting such a huge event. Maybe the underlying morality or genuineness of it all is really none of our concern.
But the marketing aspect of the Olympic Games sure is. Coca-Cola, for example, spent an estimated $70 million to be one of the top Olympic sponsors — and perhaps $5 million to $15 million more sponsoring the controversial torch relay. While Coke mostly led the pack in terms of brand recall (13 percent), at the end, the sporting brands topped the leader board, with Nike taking gold and Coke finishing a paltry seventh.
Significantly, though, sportswear producer Li Ning gained plenty of buzz from the various shrewd strategies the company employed, such as sponsoring the television commentator’s outfits for the torch relay and endorsing the U.S. ping pong team, the first Chinese company to do so. Having its founder and namesake, a former world-class gymnast and much-loved Chinese athlete, be chosen to light the torch in the Bird’s Nest stadium before the entire world also gave the sporting goods company – China’s first and most popular brand – unprecedented worldwide coverage and brand power. Simply put, it probably made the other shoe giants of the world want to cry.
MISTAKEN IDENTITY OR AMBUSH ATTEMPTS?
Another interesting titbit was eloquently captured in a survey by China Market Research Group (CMR), which found that although companies like Coke had spent millions in order to be the official sponsors of the Games, 60 percent of Chinese consumers thought that Pepsi was the official beverage partner and almost 80 percent of those surveyed did not care who the actual sponsors were. This is a perfect example of ambush marketing and though Coke must be rather chagrined by it all, this is how the marketing game works.
To be fair, the Chinese government and BOCOG did make many attempts at controlling the extent of ambush marketing, and furthermore it is a common occurrence at every Olympics. The organizers even went to the extent of buying up all the billboard space in Beijing. They even made spectators remove (or at least hide the logo of) clothing from non-Olympic sponsors. BOCOG also asked advertising agencies to avoid using Olympic symbols without authorization and asked media companies to carry ads of Olympic sponsors on their channels featuring Olympic content.
Ka-Chinggg!
But was it all truly worthwhile? adidas spent US$100 million on sponsoring Beijing 2008. And yet Nike and Li Ning received just as much, if not even more, airtime and positive buzz while spending less money. It really begS the question: Are Olympic sponsorships all they’re cracked up to be?
The entire process is rather complicated, with several tiers involved. At the most exclusive level, a dozen or so companies like Coca-Cola, McDonald’s and Visa have cut direct deals and get to use the Olympic rings in their worldwide advertising. Below this tier, sponsors pay the BOCOG for the right to market themselves there. There were dozens of these sponsors for Beijing. Each national committee also has its own set of sponsors. And of course many athletes have their own sponsorship deals, which can produce bewildering outcomes: If an American athlete wins an event wearing Puma shoes, he has to change into Nikes when he gets his medal because Nike is the US Olympic Committee sponsor.
With all this messiness, why are companies so eager to become Olympic sponsors in the first place? Granted, Beijing has more than 17.4 million residents (read: potential consumers) and that totals to more than the population of New York, Los Angeles, Miami and Boston.
However, there’s more to it, according to David D’Alessandro, former CEO of John Hancock. “The Olympics create a sense of national pride and sponsors get to bask profitably in that nationalistic glow,” he says. But that may not be true in a country like China, as national pride is something that even non-sponsors can obtain – KFC, for example, evoked a strong emotional pull with their “I Love Beijing” campaign, despite McDonald’s being the official fast food sponsor.
The truth behind the Olympic sponsorship rush may not be very pretty. The reality in China means that sponsorship’s real benefit, which people will only mention off the record, is that it provides a way to earn favour with the government. The Chinese government has enormous power over foreign companies that want to expand to a new province or get into a business dominated by local companies. For most brands with dreams of expansion and budgets to spare, this is a strong enough reason to sponsor the Beijing Olympics. What we must remember is that while it’s just a two–week event for us spectators, it’s four long years that these companies have been working towards. China is the world’s biggest market and so everyone goes all out because they know what it could mean for their brand.
Interestingly enough, the big winners of the sponsorship war may not have been global giants such as Coca-Cola, McDonalds or Visa.
The rise of the dragon
While Chinese products have long been associated with cheap labour and unreliable quality, the Games may just have changed this perception. At a cost of US$65 million, the country’s biggest PC maker, Lenovo, is the first and only Chinese company to have obtained the top level of worldwide sponsorship for the Beijing Olympics. Clearly, the company intends to leverage the global event to elevate the homegrown brand to worldwide status.
Following the global strategy of Samsung, which began growing from a domestic Korean appliance producer to a top-class global brand through its association with the 1988 Seoul Olympics, Lenovo has used the Games to gain much-needed global momentum. Despite being relatively unknown, Lenovo pulled off their sponsorship brilliantly by providing not just IT support but even cyber cafés for the athletes to keep in touch with loved ones.
Lady luck shone exceptionally brightly on Li Ning. “Overall, Li Ning made the biggest impact through the torch lighting moment and also by making excellent sponsorship choices,” says Dan Parr, Asia Pacific Senior Account Director of brandRapport. Li Ning sponsored the Chinese team for diving, gymnastics, shooting and table tennis. These four teams won 14 of the China’s 32 gold medals in the 2004 Athens Olympics.
Parr also credits swimwear brand Speedo and sporting goods brand Puma, both of which gained tremendous positive publicity due to two amazing sportsmen in Beijing 2008 – swimmer Michael Phelps of the United States and runner Usain Bolt of Jamaica. Their record-breaking performances gave these brands the spotlight and that is worth much more than millions in cold hard cash. Finally, Parr points out that watchmaker Omega garnered plenty of great coverage for their brand by being the official timekeeper, especially in events such as swimming and athletics where records where beaten by thousandths of a second. What could be better than the opportunity to show the entire world that your product is an integral part of making sporting history?
When we asked if there was really a significant benefit for those dozen or so official sponsors as compared to those brands who just “ambushed” the Games, Parr pointed out that using the Olympic rings logo or having the words “Official Sponsor” are only the fringe benefits. “Unofficial sponsors have to worry a little because they will only receive publicity if the athletes or countries they endorsed do well,” he says. However, he cites Nike as an example of ambush marketing that could have failed yet was brilliantly saved. When Chinese golden boy Liu Xiang pulled out with an injury, the sporting goods brand quickly placed full-page ads in the English-language China Daily, which read:
Love Competition
Love risking your pride
Love winning it back
Love giving it everything you’ve got
Love the glory
Love the pain
Love sport even when it breaks your heart
That the Olympics are highly commercialised these days is hardly a shock; Los Angeles in 1984 was the turning point when branding and the world’s biggest sporting contest began their blissful marriage. Still, Beijing 2008 was unique because it offered international business leaders a golden ticket into the great prize that is China’s emerging domestic market. The mere prospect 1.3 billion people tasting their brand is catnip for marketers.
The Red Republic
Speaking of 1.3 billion, we must remember that China’s staggering showcase was only possible for one inimitable reason; it was produced by the workings of a totalitarian state. There was no such nonsense as public accountability for expenditure. Fixed-price labour was provided at a fixed price by the masters of a command economy; they simply shipped the vast battalions of citizen workers needed for the event.
This is something that one-party states have always excelled at. Pre-war Nazi rallies and post-war Moscow May Day parades served to boost domestic morale and sent powerful messages to the outside world. Similarly, the Olympics, at long last, gave China a place at the centre of the world’s attention, if not their affections, and this was seized and exploited with swagger and style by the nation’s rulers. They sapped the occasion fully to send their messages to a global audience.
The mistake that China’s leaders made was to overlook the importance of getting every little piece of the puzzle exactly right. Perhaps they hoped that the pizzazz of all the festivities would wow the world to such an extent that the tiny details wouldn’t matter. If so, they were dead wrong.
For better or for worse, the world judges every single move a country such as China makes. It’s almost inevitable; given the kinds of sticky situations the country has a knack of getting embroiled in. One of the key problems that China needs to overcome is this: for all of its business success and military power, China is still something of a rookie when it comes to Western-style public relations.
“Our voice cannot be heard,” said Wenqi Gao, spokesman for China’s consulate in New York, a few months ahead of the Games. “We have to improve our image.”
He was spot on with his assessment and to worsen things, Tibetan protest groups such as Students for a Free Tibet actually leveraged Beijing 2008 to their advantage with brilliant PR strategies.
“The approach these groups have is spectacular in terms of public relations,” said Richard Funess, president of Ruder Finn Americas, a public relations firm.
While China would love to have used the Olympics to better advantage, perhaps they have learned invaluable lessons from this mammoth event. After all, the do say that the best way to learn is from mistakes, and China is a strong country that is surging forward on
all fronts.