Live Issue: Beware of Chinese whispers

Olympic sponsors have also been taken to task by a group calling itself Dream for Darfur, which has rated key Olympic sponsors such as Coca-Cola, Samsung, Microsoft, Visa, McDonald's, Volkswagon, Panasonic and General Electric on their efforts to bring peace to the war-torn region of Sudan. The group's chair, Hollywood actress Mia Farrow, said: "If the summer games go down in history as the 'genocide Olympics', it will be because of the Chinese government's support of the regime in Sudan, abetted by the moral cowardice of the sponsors who would not speak out."

Such publicity is the stuff of PR nightmares and a factor that could lead brands sponsoring the games to shy away from Olympic-themed promotions in countries such as the UK.

Hartmut Zastrow, executive director of sports research consultancy Sport+Markt, says some Olympic partners are still waiting to see how things play out before launching promotions or other games-related marketing activity. "Most of the sponsors are still on hold and watch the development before they make any decision," he says. Zastrow goes as far as to ague that no sponsor could possibly exploit the Olympic spirit in their campaigns right now, except in China.

Sport+Markt's own research has shown that worldwide, 52 per cent of people are interested in the games. The problem for sponsors is how to exploit that interest if the negative connotations now associated with the Beijing games persist. "A few have delayed already prepared communication - material which had been approved initially for sponsorship activation is held back and still could be cancelled completely," says Zastrow.

For some, time is running out for promotions on hold. As Sarah Bentley, head of sponsorship at BD-NTWK, which counts Coca-Cola among its clients, notes: "Because there could be problems with visa applications, competitions giving away tickets to the Olympics have to be run well in advance of the event. So, although the games won't take place until August, promotions involving tickets will already be closing." Coca-Cola has not run a ticket promotion in the UK.

Some argue that sponsors that weren't prepared for bad press have only themselves to blame. "Beijing has been in the planning for a very long time and problems with Tibet have been going on for a long time, so brands have gone into this with their eyes open," says Will Oscroft, business development director at Ogilvy Sports & Entertainment.

The scale of any backlash against Beijing sponsors could be overestimated, he adds. "Sponsors will be anxious to see if there is a negative reaction from consumers, but I'd be surprised if there was from any but a small and vocal group in the media."

Olympic sponsorship is a hard-won prize for many of the bigger brands involved and one that, despite a few bumps in the road, few would ever consider a burden. Bentley says: "A lot of the bigger companies are in it for the long haul, signing 12- or 15-year deals with the IOC (International Olympic Committee)."

Controversy frequently dogs the steps of the IOC, but the sheer pulling power of the event ensures consistently high demand for the sponsorship deals. Even with the current furore over Tibet and Darfur, global sponsors are still getting value for money from their deals through the exposure sponsorship is giving them in the world's most important emerging market: China. "Many companies are looking at the market from a very different perspective and leveraging their position in China via the Olympics," says Bentley. "Visa, for instance, is using Beijing to leverage relationships with the Chinese banks."

But Visa has also gone ahead with UK-based promotions despite the games-related controversies. The company has run several Olympics giveaways in the UK, offering 10 luxury trips to Beijing for customers who have used their cards abroad, in addition to similar promotions in partnership with BT and Marriott.

For those sponsors that remain jittery, Zastrow has some sanguine advice: "They have to focus on the sporting competition and should avoid the topic of international understanding. In each country, they can highlight the Olympic idea and the corresponding national athletes. Communication on this level is risk-free and easy.