The Olympics is one of the most powerful global platforms from which to connect with customers, writes Michael Payne, author of Olympic Turnaround: How the Olympic Games stepped back from the brink of extinction to become the world's best known brand.
With all the inherent complications and challenges, it’s important to remember why companies spend tens of millions of dollars sponsoring the Olympics.
The bottom-line is that they do so because they hope it will make them more money.
Whether as a consumer or a key business client; whether you are in central China or downtown Manhattan; nothing has provided sponsors with a stronger or more powerful unified global platform to connect with their customers than the Olympics.
Market research continually underlines this point. One study by US broadcaster NBC found that 85% of viewers saw Olympic sponsors as leaders, with 80% of them committed to excellence and quality.
Part of the power of the appeal of the Olympics is passion. "People are passionate about the Games," is how Coke sports marketing boss Scott McCune begins to rationalize the basis for his company’s Olympic involvement. "It is a great vehicle for us to develop a relationship with the consumers."
In a blunt appraisal of Coca-Cola’s marketing strategy, senior Coke executive Stu Cross explains that: "We have to constantly market our beverage in a way that creates the impression that there’s more than just the liquid in the package, something refreshing the spirit.
"The Olympics do that for us. All that fun and excitement and global nature accrues to an image that at a given point in time makes people pick our product up, versus a lot of other choices that they have out there."
Over the years, Coke has developed a series of on site promotional, experiential marketing activities.
These range from Olympic pin collecting, which in Salt Lake alone attracted 460,000 visitors, to themed sporting attractions that give families the chance to try out different Olympic sports, from push starting an Olympic bob to curling.
The goal is not to sell more Coke the following day necessarily. Instead the strategy is about providing memorable experiences for consumers, restaurant executives, retailers and bottlers that pay off over the long term in increased brand loyalty.
The Olympic Partner (TOP) program, with its sponsorship of each national Olympic team, presented the opportunity for companies to embrace a truly local image, shedding the perception of always being the big US multinational.
"The Olympics enhance Kodak’s image as a world leader in the photographic industry, but at the same time enhance its image as a local company, be it in Germany, Australia, the UK, Canada or where ever we have operations," notes John Barr, the Kodak marketing executive who led its negotiations to get back into the Olympics, and one of the first to see the true potential of the local partnership. When the Olympics returned to Japan in 1998, for the Nagano Winter Games, Kodak set about avenging its loss, 14 years earlier in Los Angeles.
Sometimes the Olympic connection is a little too successful, as McDonald’s discovered with one of its 1984 Los Angeles Olympic promotions.
A scratch card promotion, with the name of an Olympic event, ran throughout the US, with the customer winning a prize every time a US athlete won a medal.
The promotion was obviously designed before the Soviets decided to boycott the Games.
Unfortunately, no one bothered to recalculate the potential medal haul of the US team.
Within a few days, stores were running out of prizes, as the US team results outpaced supply. "This is the most successful game, but it is also the most costly," McDonald’s executives reflected once the Olympics were over.
Nearly twenty years later in Sydney, McDonald’s made the same mistake. This time the company underestimated the potential success of the Australian team.
McDonald’s ran another scratch card competition, offering free burgers for sports depicted on the cards that match Australian gold medal winning events.
When Simon Fairweather won a surprise gold for Australia in the men’s archery event, McDonald’s faced a claim for an additional 140,000 free hamburgers at a cost of over $200,000.