News Analysis: Cleaning Up at the Olympics
Barrand, Drew, Marketing
The government is acting early to prevent ambush marketing at the 2012 Games. Will it work, asks Drew Barrand.
Ambush marketing, guerilla marketing - whichever way it is phrased, the inference is of a hostile attack on the mainstream, and attention surrounding the phraseology of the draft London Olympics Bill progressing through the parliamentary system shows how seriously the sports marketing industry takes this sort of aggressive activity.
Sponsorship revenue from the International Olympic Committee's (IOC) TOP partner programme is at pounds 500m and rising, not to mention the estimated pounds 400m to be derived from domestic sponsorship contracts at the London 2012 Games.
As the value of these deals has climbed over the years, so the legislation that protects official Olympic tie-ups has tightened. Since the 1996 Atlanta Games, when ambush marketing put paid to the intended high-impact strategies of a number of official sponsors, the IOC has required the national governments of host cities to create strict guidelines to prevent the activity.
'Anti-ambush marketing legislation is pretty stringent now,' says Karen Earl, managing director of Karen Earl Sponsorship. 'The escalation of Olympic sponsorship's value has meant an escalation of the rules. It is the only way sponsors can defend their investment.'
Lessons passed on by the IOC's transition team from one Olympics to the next have helped close loopholes exploited by ambush marketers, but have extended the legislation's boundaries enormously.
These strict guidelines have raised the hackles of many within the advertising industry. Bodies such as the Institute of Practitioners in Advertising (IPA) began lobbying the Government to relax its plans for London 2012 before the ink had barely dried on the draft proposals, branding the far-reaching restrictions as 'unreasonable'.
The government has tried to reassure the industry by consulting it on a line-by-line basis as to the exact make-up of the legislation. However, the signs are that any relaxing of the suggested rules during the second reading last week has been minimal (see box).
To its credit, the British government has stolen a march on previous host countries by dealing with the problem early and working to create a set of guidelines that everybody understands, and can work to, well in advance of the Games. It is hoped the bill will be signed off in the first half of 2006.
Although there has been huge improvement in anti-ambush marketing legislation, there are still two core problems facing Olympic organisers.
First, there is a feeling that penalties for infringement are too small to dissuade major corporations. Fines for the next Winter Olympics, to be held in Turin in February 2006, will range from pounds 700 to a maximum of pounds 70,000.
Such an amount represents small change to even a small business, and means that brand owners are unlikely to lose any sleep if caught (Marketing, 19 October).
Second, for a brand to be discredited, it must be proved guilty of something.
'Anti-ambush marketing legislation provides the backbone for a legal process for event organisers to counteract this type of threat. …