Olympic Brand Ambush Marketing is...(A) a Mortal Sin (B) Good Business Sense (C) None of the Above

If ambush marketing is as mortal a sin as the IOC claims, why did they bring on board as an Olympic sponsor one of the most infamous ambush marketers of all time?

During the 1996 Atlanta Olympics, NIKE, which at the time was NOT an Olympic sponsor, heavily promoted, “You don’t win silver, you lose gold” in reference to what they perceived as the greed of the IOC to cater primarily to elite athletes and ignore all the rest who were only one one-hundredth of a second off the center podium. The IOC was livid and accused NIKE of unfair sportsmanship, which is ironic when you consider it was exactly what NIKE implied of the IOC.

According to the IOC, ambush marketing is illegal and unethical.

Surprisingly, in 2005 the IOC made NIKE an Olympic sponsor.

Maybe ambush marketing isn’t such a sin after all.

The reality is that what the IOC refers to as ambush marketing (or as I prefer to call it, leveraging Olympic momentum) is neither against any law in any Olympic host region anywhere in the world ... or is it dishonourable. A growing group of mostly large companies do it regularly and with great success. Some business executives maintain, and rightly so, independently leveraging Olympic momentum improves the IOC business model by keeping Olympic organizations on their toes.

Business owners and Canadian lawyers are pretty clear in the interpretation. The more progressive believe ambush marketing / leveraging Olympic momentum makes good business sense.

Quote from Nancy A. Miller, lawyer with Folger Rubinoff; "There is no unanimity of view that the practice of ambush marketing is an unfair and unethical marketing tactic rather than a creative, effective and legal marketing practice."

How did it happen then that many business owners in Vancouver and Whistler still shiver in their boots at even the prospect of trying to figure out how to get on the gravy train Olympic sponsors selfishly ride? I write "selfishly" because Olympic sponsors like NBC and their CTV 2010 affiliates for example expect to connect with over three billion viewers at the Vancouver / Whistler Winter Games, and the plan is to keep it all to themselves. It’s a lot of eyeballs and a lot of advertising dollars. While sponsors line up at the bank to deposit wheelbarrows of Olympic gold, taxes skyrocket and the cost of doing business in our host region escalates. Since 2002, Olympic host regions have been stuck with a deficit and ROI that wasn’t even remotely proportionate to the billions spent. And unless a miracle occurs, Vancouver 2010 and London 2012 will experience the same economic straits.  

How does the IOC get away with it in host region after host region?

I’ll let you in on a little secret, they use intimidation to keep the host community in its place, or more accurately, their place.

They hit hard in the early years when a region first wins the bid to send a strong message they will not tolerate any type of interference in their oligopolic monopoly (an oligopoly occurs when a market is surreptitiously controlled by a small number of industries).

The Olympia restaurant on Denman street is a good example of the IOC hitting hard right out of the gate. Instead of the IOC approaching the restaurant owners rationally about the rings and torch imagery they used for almost two decades on their restaurant signs and menus, Olympic organizations in 2004 sent threatening letters out of the blue with the intent, we assume, to intimidate the restaurant into submission.

Fortunately for the restaurant, the Olympia had the full and very vocal support of the community behind them, plus an experienced media communications company (mine) and a legal heavyweight, Joe Arvay, to help them interpret the law.

Most people today think the problem regarding the Olympia restaurant was resolved years ago, but it wasn’t. The only thing resolved was that after a few years of harassment VANOC let the issue quietly slip into the night after they realised they were wrestling with an eight arm social media octopus.

However, just because VANOC backed away doesn’t mean they can’t start up at any time again, possibly even a week before the Games begin. Maybe they will maybe they won’t, my point in this article is that business owners in our region witnessed the battle and it sent many of them scurrying for cover, which was a backdoor partial victory for the IOC. They’ll take what they can get.

In retrospect, the billion dollar question is, how exactly did the IOC inject crippling fear into the fiefdom even though they were never successful in forcing the little restaurant to change their signs?

Vancouver business owners recognised from the start that one of their own was being bullied by an out-of-town corporate powerhouse. Vancouver is after all the city that for decades proudly shut out Wal-Mart. Small shopkeepers had each other’s backs. Considering this history of solidarity, when the big box Olympic machine came to town why did Vancouver business owners lose their sense of place and become so easily influenced and intimidated?

The dirty little secret is that VANOC was being covertly supported by local mainstream newspapers.

Some newspapers at the time, like the Vancouver Sun for example, didn’t clearly express for years their interest in becoming official Olympic sponsors until after the supplier agreement was inked. And even then, for almost a year, they didn’t clearly indicate they were official IOC partners with a lucrative deal and clear mandate to tell the Olympic side of the Olympic story. During this hazy period, not one Olympic logo signifying their partnership could be found on their pages while they unabashedly boosted the Games. Most readers were unaware of the bias.

Newspapers have great incentive to manufacture consent and intimidate.

Some do it more enthusiastically and effectively than others.

Local newspapers struck gold selling advertising to land developers and real estate companies, two types of businesses that by far profit the most in all Olympic regions. Newspapers hyped fanciful, unsubstantiated, and sometimes even bogus benefits of the Games. The resulting frenzy artificially inflated property values and helped sell condos. Speculators had a field day. It didn’t take long for “Paper Millionaire” headlines to show up in newspapers fooling homeowners into thinking an artificially spiked million dollar property value driven up by Olympic frenzy was somehow good for them and our community, and that land values would only continue to rise. Did you believe?

From HAVE NOT to BOOM TOWN!

BC was a have-not province in early 2003, but in the latter half of the year after winning the Olympic bid in July, property values exploded! A couple of months after winning the 2010 bid news media reported all-time record-breaking real estate sales volume for August 2003. Unfortunately, and like in all Olympic regions, it fizzled almost as quickly as it inflated, but not before the well was pumped dry.

In the beginning newspapers shamefully stoked the frenzy with irresponsible BOOM town headlines. More interestingly though, it’s what mainstream news didn’t report that pushed the bounds of ethical journalism. Newspapers failed to adequately impress upon readers that taxes across all sectors would soon ramp up to keep pace with increased property values. Vancouverites, oblivious to the downside, were getting rich on paper, but had no idea taxes were about to drive them back into the poorhouse. It wasn’t the Olympic legacy promised and anticipated, but someone had to pay for the Games.

Mainstream news media invested considerably in what Noam Chomsky calls “necessary illusion.” Consequently, most BC business owners became, and many still remain, fearful of exploring ways to legally, ethically and fairly leverage Olympic momentum. Instead of being inclusive, as 2010 was initially promoted, the Olympics turned out to be exclusive, and in some cases even elitist.

Most business owners simply gave up, naively choosing to ride it out hoping they would survive the Games by somehow scooping dollars from spectators who would eventually show up for the Olympics in February. What most only recently started to realize is that unless spectators have good incentive to do so, they rarely venture outside of the official Olympic zones. If you want customers to make it to your neighbourhood you have to reach out to them before they arrive, and more importantly give them incentive to find you. Thankfully, today you have social media tools like blogs and Twitter to connect with Olympic athletes and spectators and make them a once in a lifetime offer they cannot refuse.

Just like in all past Olympic regions, an inordinate number of Vancouver and Whistler businesses moved out of the region or went bankrupt soon after the Olympics came to town. Have you noticed over the last few years a growing number of large franchises replacing all those independent shops that used to give Vancouver and Whistler unique flavour? Yes, the recession certainly had an impact, and I’m not slamming franchises. They are a valuable part of your community, but 2010 put companies over the edge that might have survived if they had good information well in advance that would have allowed them to prepare properly. Even official Olympic sponsors like Rona franchisees complained the Olympics drove taxes so high that it had a serious negative impact on their business. If a big franchise was having trouble riding out the Games how could a small unaffiliated business survive?

Fortunately, a growing number of companies in recent past Olympic regions have figured out how to not only survive, but also how to make the Olympics work economically in their favour. Their secret is that they aren’t intimidated and they don’t hesitate to get onboard when the Olympic train pulls into the station. Some of these companies you will recognize because they are big, and some you won’t because they stay low key until they are ready to roll out their strategy. Like the IOC, they also use surprise as a tactical tool. You won’t see them coming. Instead, they’ll slip subtly into your consciousness. Most of these companies have zero incentive to share their secrets, and until recently and for the most part they had the field to themselves. They fly below the radar for good reason.

Who are the big ambush marketers?

Well NIKE and Pepsi are probably the biggest companies with a track record for independently leveraging Olympic momentum, and they are joined by companies like AMEX, Qantas Airlines, Air Canada, Toyo Tires and even companies of which you might not be familiar, like Mengnui.

Excerpt from Brand Channel; "The result of all of Nike’s ambushing appears to pay off though. Following the 1996 Atlanta debacle, many thought Nike had been an official sponsor of the games. More recently, a December 2001 study found that, from a list of 45 likely sponsors of the 2002 World Cup, 20 percent of those polled picked Nike. Rick Burton, executive director of Warsaw Sports Marketing Center at the University of Oregon, points out the obvious, "Nike has done nothing illegal." Simon Pestridge, Nike’s brand manager, explains more diplomatically in an interview with MSNBC in February of this year: "Nike likes to come at things from a different angle.""

How do they do it?

Sometimes it’s as simple as running a sports related ad in the run up to and during the Games, and other times they develop very complex advertising and promotion strategies that sneak in the back door and scoop Olympic athlete and spectator eyeballs. A growing number of small companies also use social media marketing and promotion strategies launched and operated straight from their own websites or online affiliates.   

Over the last few years many companies migrated away from newspapers and television ads and used the internet to leverage Olympic momentum. Why? Well, in comparison it’s effective and affordable, which means even small companies can do it. Pre-social media, traditional Olympic momentum strategies were impossible for smaller companies to implement because they simply could not carry the exorbitant advertising rates newspapers and television command.

Today, things are much different. Marketing executive Jerry Welsh who, when he ran AMEX, coined the term “ambush marketing.” Welsh is vocal and disgruntled that the phrase and strategy he developed has been twisted to mean the exact opposite of what he had in mind.

You’ll find more links and information on this page of my media communications site listing a myriad of companies that successfully leveraged Olympic momentum as recently as the 2008 Games in Beijing. If you know of others please comment below and share with us all.

Next time I’ll  write about effective ways
you too can leverage Olympic momentum.

Hint: Set up a company blog and a Twitter account.

My philosophy is ... 

If you have to pay for the Olympics, you should benefit too.

^BIO

^{Maurice Cardinal has two decades of experience in the entertainment industry managing projects with companies like Capitol EMI, CBC, CBS, Grammy Award winning artists and also Fortune 500 companies, plus he has managed special events with a variety of Canadian politicians and two US Presidential Teams.}

^{He has managed projects for the '88 Olympics in Calgary, and Expo '86 in Vancouver, plus Radio City Music Hall, the Houston Astrodome, and thousands of venues in between around the world. For the last ten years he produced and co-wrote a business newsletter (about managing news media in a crisis) read by thousands of executives and politicians, including a dozen U.S. senators and MBA students at Harvard Law School.}

^{In addition he has designed and produced community-based internet communication campaigns and has managed projects in Canada, United States, Europe, and the Pacific Rim. He has twenty years experience in the traditional world of marketing, operations and promotion, plus a decade and a half exclusively as a new media communicator, developer, and advisor.}

 ^{He edits OlyBLOG.com and is author of the book, Leverage Olympic Momentum.}