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Sport and money!

3 (2009)
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Sports sponsorship is an instrument of strategic investment into a brand, which brings besides a good reputation and image also quite a tangible material benefit.

In fact, the history of Olympic sponsorship started in the year of 1896. Greek Crown Prince Konstantin established special committee for Olympics assistance in Athens and launched an appeal to contribute into Games supporting fund. Not only the inhabitants of Greece, but also Diaspora representatives, living in London, Marseille, Constantinople, showed their adherence to sports tradition with specie. The first modern sponsor of the Olympic Games was Kodak Company. One hundred journalists came to the Olympiad with cameras of this company. It was the best advertisement of Kodak for the whole history of the company. In 1912 about 10 Swedish companies bought exclusive rights for preparation of the Stockholm Olympic Games and were allowed to sell easily the souvenirs with both the Olympics’ and their own brand images.

During the Antwerp Olympiad in the year of 1920 the official program of the Games contained so many advertising, that there was hardly a place for the sports events itself. The Olympic Games of the year 1924 in Paris witnessed a similar sponsorship boom. The first Games which broght the real income to the arrangers were the Games of 1932 in Los-Angeles. The special commercial department, that had been created within the Steering Committee, attracted sponsors from 11 countries to the Games of 1952 in Helsinki.

Starting with the Games of 1984 in Los-Angeles the number of sponsors dramatically decreased. However the quantity was compensated by the quality and scale: these were basically transnational and huge American corporations. The income from sponsor program was about $150 mln.

Higher and higher

In the year of 1985 the international Olympic advertising sponsor program under the name P appeared. It was developed by the Swiss Company ISL «for the commercial-license activity handling within the process of preparation to the Olympic Games». Nine transnational «monsters», including Coca-Cola, Samsung and Kodak signed the sponsor agreement with IOC, contributed by $5 mln. This money gave them right for the exclusive usage of the logo — five Olympic rings, as well as the possibility to attract Olympic Champions for participation in ads of their company. The TOP-I Program gained about $95 mln. According to the IOC estimations, Summer Games in Barcelona-92 and Winter Games in Lillehammer-94 were most successful from the commercial point of view. The total income from the Barcelona national marketing program comprised over $500 mln. The revenue from sponsorship at Lillehammer increased $100 mln.

Money, out?

However Greece is not able to recover from dizzy losses of the Athenian Olympiad of 2004 until the present moment. By the way, just after the completion of the TOP-V program which started in Salt Lake City and finished Athens the company Xerox put a period to its more than 40-year-history of the Olympic sponsorship. After Peking–2008 sponsors series lost one more permanent participant — the company Kodak.

For the last 10–15 years international companies carried immense expenditures for a single opportunity to associate its brand with the Games. Only Coca-Cola spent $145 mln. on sponsorship and publicity in notorious Athens. Other official sponsors — Kodak, McDonald‘s, Panasonic, Samsung, Visa, Adidas gained jointly $1,3 bln.

With such immense investments the sponsor is entitled to wait for the financial return. Meantime according to the research conducted by NOP World, only 43% are able to name at least one brand confusing whereat Coca-Cola and Pepsi, Visa and American Express. The best results showed McDonald's — 10%. However, there are inspiring examples in the close circle of TOP-sponsors. The financing of the Sydney Olympiad–2000 brought an income about $1 bln. to Samsung against $40 mln. spent on the sponsorship. Its sales increased by 44% — from $3,9 bln. up to $5,2 bln. And brand recognition — by 5%.

Touch home

Every companysponsor renders services and supplies goods for arrangers, sportsmen and operational staff. Coca-Cola provides beverages, Volvo — buses and cars. Samsung realizes mobile communication, Visa — bank transactions…

As a vivid example of «how one should not spend money» the company Reebok can be named, the principal sponsor and provider of the Olympiad of 1996. All official persons in Atlanta wore Reebok shoes but sportsmen preferred shoes of another brand. American Michael Johnson who was the first in history to win gold medals in the race to 200 and 400 meters appeared in shoes for jogging by Nike. They «lighted» in television, not only during the race but also when Johnson, after setting a record in the 400 meters, gifted them to his parents in acknowledgment. It was an extremely strong moment from the emotional point, a genuine discovery for journalists. No wonder that in surveys handled after the Olympiad a considerable part of consumers named Nike as the Olympic sponsor instead of Reebok.

Olympiad for sponsors or sponsors for Olympiad?

Expert opinion

Anna Semenova, Director of brand agency BrandActive:

— A good financial support of the Olympiad will support the brand more than any other kind of marketing. The Olympic sponsorship can be defined as the system of connecting vessels. On one hand, its participants are the companies, looking for the possibilities of long-term investments into brand and corporate strategy development. On the other hand — sport itself should correctly set forth its own proposals for sponsors, offering effective and mutually beneficial cooperation.

Galina Manukyan, psychoanalyst:

— The Olympic Games, undoubtedly, is a unique event. It is the only possibility for sponsors to address to a wide audience and at the same time — worthy motive for financial support from consumer's point of view. Theoretically the audience apprehends the fascination, excitement and emotions, which it feels during sponsored event, as distinguished traits of promoting brand. One of dramatic examples is brand of Nike company. Associating itself with such sportsmen, as Tyger Woods and Michael Jordan, the brand itself «got into» a great spirit and managed to win dominant positions in its product category.


Author: Irina Rodina