Going for the Gold by Chris Trayhorn, Publisher of mThink Blue Book, November 1, 2007 If asked to identify the characteristics of an ideal product to market, most would likely put at the top of the list broad appeal, the ability to evoke strong emotion, a venerable brand – and something very, very, sexy. If this sounds a lot like the Olympic Games, then it’s easy to understand why TV advertisers line up from Beijing to Burbank with large checks in hand to get a piece of the action. Capitalizing on the Olympic hype online isn’t nearly as competitive as buying TV spots, but not because of a lack of interest. Restrictive and complex licensing rules and requirements have kept many marketers on the sidelines. However, by marketing around the athletes and the teams instead of the Games themselves, online marketers still have a shot at bringing home some gold. With nearly 3,000 years of history, the Olympic Games have an unparalleled tradition in sports. The images of the athletes ascending the podium clasping their medals while listening to national anthems evoke strong emotions. Sinewy athletes who push themselves to unparalleled physical achievements are the embodiment of sexy. No wonder that every two years corporate sponsors spend billions around marketing the games, the national teams and the athletes themselves. The Beijing Olympics will bring more than $900 million in additional advertising to China in 2008, and $3 billion to the global market, according to media company ZenithOptimedia. “We estimate that the last Olympics added about $2.5 billion to the world ad market, so [Beijing] will add about 20 percent more,” says Jonathan Barnard, the head of publications for ZenithOptimedia. Millions of Chinese residents are also getting Internet access for the first time. In the first half of 2007, 39 million residents of China began logging on, a nearly 32 percent increase over the previous year, according to the People’s Daily Online. Marketing firm GroupM predicts that because of the Olympics, China will surpass the United States as the leading contributor to the worldwide growth in advertising in 2008. Because the 2008 games will take place in China – a land of intrigue to Westerners and a land with a booming economy due to a new appreciation for capitalism – Beijing will translate into gold like no previous Olympics. The opportunity is also greater for this Olympiad because of the games being held in one of the world’s most populous cities (15 million people). Top-tier sponsors such as Coca-Cola and McDonald’s – who pay $50 million or more every four years to be associated with the winter and summer Olympics – are hoping for greater participation in the opening of the Chinese market to international companies. “Athens and Sydney [the locations of the prior two summer Olympic Games] were in small markets,” says Ed Hula, editor of Olympic marketing site Around the Rings. “This is the largest market with the biggest potential,” … and companies see “more potential to use the Olympics to boost their market in China,” he says. Since Beijing is relatively unknown to the rest of the world, the Games offers a chance to connect the region to a new audience and bring cultures together, according to Carter Westfall, vice president of consulting firm Helios Partners, which has worked with cities applying to host the Olympic Games. “Every city has a story to tell,” says Westfall. Similar to Berlin during World War II, “seeing the athletes competing inside Beijing is a unique opportunity given the current political climate,” he says. Westfall says that because of the location, nontraditional Olympic sponsors such as Australian energy company BHP Billiton, which is building a dam in China, are participating. Beijing also presents a greater opportunity than the last Olympics, not only because of the size of the country, but also because of the changes in Internet technology and marketing vehicles. The new opportunity is “hard to quantify because there have been so many advances, such as blogs, virtual reality and social networking,” notes Westfall. During the last Olympics, websites such as SecondLife, YouTube and MySpace either didn’t exist or were not useful online marketing tools. While top sponsors will continue to spend millions on TV, “the online component is the way for sports marketers to differentiate themselves,” he says. Jimmy Vee, a marketing consultant and co-author of the book Gravitational Marketing, recommends using athletes prominently in online marketing campaigns. Advertising on enthusiast blogs, athlete’s MySpace pages and posting training videos on YouTube are inexpensive marketing methods, Vee says. “Consumers don’t connect with companies, they connect with people,” he notes. Getting Out of the Blocks Early 2008 is the perfect time to begin marketing around the Olympics. Most initiatives surrounding Olympic marketing begin between three to six months before the games. Around the Rings’ Hula saw very little marketing activity off-line outside of China during his travels around the globe in 2007 and also noticed few online campaigns. Top-level Olympic sponsors including Samsung, GE and AT&T began their marketing efforts online and off-line in early- to mid- 2007, but they have yet to start their sprint to the finish. Samsung used an online promotion to recruit torch bearers for the Olympic relay through an exclusive arrangement with the BOCOG (Beijing Organizing Committee for the Olympic Games). GE launched a micro website with videos detailing its involvement in building power, lighting and water systems in Beijing. The small pool of Olympic licensees with campaigns active in the fall of 2007 includes Jet Set Sports, which has exclusive rights to sell Olympic hospitality packages to Beijing, and merchandising companies XP Apparel and Roots.com. For merchants, getting the governing Olympic Committee to approve merchandising deals can be a marathon of negotiations. James Connell, the director of e-commerce and new media for Roots.com, says merchandising Olympic apparel “… is complicated because you have people with competing interest in what the products look like and how it should be worn.” The retailer, which is based in Toronto, obtained a merchandising license from the USOC (United States Olympic Committee) instead of the IOC (International Olympic Committee) and can therefore only sell apparel online to consumers within the U.S., Connell says. Recruiting for new affiliates to sell products around the Beijing Olympics will begin in early 2008, according to Connell. Consumer promotions won’t start until about 100 days before the games begin, he notes. Roots.com is partnering with existing sports sites, and Connell recommends that publishers add content about individual athletes’ performances and their lives to increase traffic. The company does not have marketing agreements with any USA Olympic teams or athletes currently, so they can’t sell USA Gymnastics bags, for example. In the past, the company has signed marketing agreements with individual athletes such as skater Apolo Ohno. AT&T, a sponsor of the USOC, began its marketing activities in the summer of 2006, according to Mary O’Connor, the director of Olympic marketing for The Marketing Arm, which represents the company. In addition to the marketing programs with the USOC, AT&T also indirectly markets around the Beijing Olympics by supporting two USA Teams. Though marketers who partner with USA Teams cannot use the Olympic Rings or Beijing logos, they gain an association with teams and sports that have fans that match the attractive Olympic demographic. AT&T’s “Blue Room” website tracks the year-round exploits of the USA Diving and Gymnastics teams. The site provides results of pre-Olympic competitions and behind-the-scenes videos of the participants in training to engage the audience with the personalities, O’Connor says. The website will encourage fans of gymnastics to start talking about Team USA’s prospects for success in early 2008, in hopes that “the passion can come around Beijing,” accord ing to O’Connor. Amateur sports enthusiasts “have no mainstream outlet for their sports” and are hungry for content, according to Matthew Pace, a partner and chairman of the sports business at the law firm of Duval & Stachenfeld. Pace, who previously worked on Olympic marketing for General Motors at agency Eventworks, says marketing to a fan base can create an affinity. For example, if an automotive company sponsors the USA Swim Team and the fan also likes that sport or team, then he or she is more likely to buy from the company, Pace says. Pace says sports enthusiast blogs and news sites that cover but are not affiliated with sponsored teams are a great place for “ambush marketing.” For example, automotive competitors can market to the same audience of sports fans on other sites to attempt to win over consumers. Marketing in conjunction with USA Teams and enthusiasts sites provides access to a desirable demographic without having to pay premium Olympic sponsor dollars, according to Robert Prazmark, executive vice president of sales and marketing at the Wasserman Media Group. Prazmark, whose company markets for the USA Gymnastics, Swimming, and Track and Field teams, says that the USA Teams and their fan sites in aggregate create a larger marketing opportunity than the Games themselves. While the Olympic TV audience has dwindled, interest in swimming and gymnastics clubs is growing, Prazmark says. An individual webcast may only draw tens of thousands of viewers, but collectively, online coverage of a team’s activities and competitions can surpass the viewers of Olympic events, he says. Prazmark notes that USA Team fans offer a desirable demographic because of higher relative incomes. “The audience is larger and deeper than a more generic Olympic audience,” he says. So just like the journey of the Olympic athletes – persistence, preparation and training are required for marketers to take home gold. UPDATE: Media services company ZenithOptimedia released its forecasts for advertising expenditures in the U.S. It projects a banner year for Internet ad spend including a good year in 2008 for TV ad spend because of the Olympics – but predicts ad spend down overall. Some of its projections include: U.S. ad market has been downgraded to 2.5 percent growth in 2007 from the previous estimate of 3.3 percent – mostly because of the credit and housing market slump The Olympics will lift TV’s share of the global ad market to a record 38.2 percent in 2008 Online video and local search will make for a 30 percent growth in Internet ad expenditures in 2007 – that’s nine times faster than the rest of the ad market Between 2006 and 2009, Internet ad spend will grow 85 percent and raise its market share from 6.1 to 9.5 percent It projects 29.9 percent growth this year in Internet ad spend – that’s up from 28.6 percent from its last forecast a quarter ago, and 85 percent growth between 2006 and 2009 (up from the previous forecast of 82 percent) Internet advertising is expected to account for 9.5 percent of all expenditure in 2009, up from 9.4 percent last quarter Filed under: Revenue Tagged under: 20 - November/December 2007, Advertising, Brand Equity, Features, International, mtadmin About the Author Chris Trayhorn, Publisher of mThink Blue Book Chris Trayhorn is the Chairman of the Performance Marketing Industry Blue Ribbon Panel and the CEO of mThink.com, a leading online and content marketing agency. He has founded four successful marketing companies in London and San Francisco in the last 15 years, and is currently the founder and publisher of Revenue+Performance magazine, the magazine of the performance marketing industry since 2002.