Ambush Marketing and the London 2012 Olympic Games

In line with increases in general sponsorship spending, sponsorship of the Olympic Games has experienced rapid growth during the last two decades. The Olympic Partners (TOP) program rose from $96 million for Seoul 1988 to $866 million for Beijing 2008. In 1984 the International Olympic Committee (the IOC) provided major sponsors with worldwide category-exclusive rights (one sponsor per product category) in order to increase the value of sponsorship. This significantly reduced the number of TOP sponsors, and at the same time, increased the costs of securing sponsorship rights. These factors may have contributed to increased use of ambush marketing strategies. The importance of securing funding through sponsorship is clear and major sporting events could not happen without the financial support of sponsors. Consequently, the IOC is understandably anxious to protect their event and sponsors’ interest by restricting the opportunities for ambush marketing.

Estimated costs for the 2012 London Olympic Games exceed £9.3 billion and represent one of the most expensive sporting events in history. The IOC was estimated to have generated £2.7 billion from the sale of London 2012 broadcasting and sponsorship rights. The revenue generated by sponsorships accounted for more than 40% of Olympic revenues. Companies can gain sponsorship rights, either through IOC’s TOP sponsorship or through domestic sponsorship managed by the London Organising Committee of the Olympic Games (LOCOG). TOP sponsors for the Games have worldwide sponsorship rights, while domestic sponsors are entitled marketing rights within the host country or territory only.

Ambush Marketing

The Olympic Games reaches billions of people in over 200 countries and territories throughout the world and provides its sponsors with a platform to communicate with global audiences. Association with events encourages consumers to perceive sponsors as leaders in their industry, socially responsible, dedicated to excellence, innovative, and leading edge. This platform is therefore, appealing to companies, but category exclusivity and cost limit those who can be officially involved, certainly at the TOP level. Companies may choose an ambush marketing strategy in order to create consumer confusion as to who the official sponsor is and thereby, blunt or weaken the competitors’ sponsorship effectiveness. As a result, ambush marketing, also known as “parasitic marketing” or “guerrilla marketing”, has grown rapidly in parallel with sponsorship development.

Ambush Marketing Definition

Contemporary ambush marketing is perceived as a different approach to marketing and an opportunity that runs parallel to sponsorship. There is no consensus in the literature as to what ambush marketing encompasses.Some definitions emphasize the creation of confusion and weakening of a major sponsor’s value, although this could include both unauthorized and authorized involvement. Official support of sub categories is commonly used by many major companies to attack their rivals, thereby avoiding the large-scale investment needed to secure those higher level sponsorship rights, such as the TOP program. For example, Kodak ambushed Fuji’s official sponsorship in the Los Angeles Olympics by sponsoring the US track and field team; Nike sponsored a number of teams competing in the 1998 FIFA World Cup despite Adidas’s official sponsorship; Pepsi sponsored the highly popular Brazilian soccer team to ambush Coca Cola’s worldwide sponsorship rights during the 1990 Football World Cup. In addition to ambushing through official links, companies can also confuse consumers as to the official sponsor, by unofficial associative or intrusive ambushing through capitalizing on the value of the sports event.

The opportunities for ambush marketing arise as there are multiple entities involved in a sport event and a variety of media opportunities that can be exploited. The following figure illustrates the inter-relationships between these entities and how the different types of ambush marketing can occur. Appendix 1 provides the definitions of different types of ambush marketing strategies.

Figure 1 Ambush marketing strategies

Most ambushing activities are not illegal and historically, there are many examples of successful practices in major events.

  • 1984 Los Angeles Olympic Games, Kodak employed ambushing strategies by being the broadcast sponsor to attack Fuji’s sponsorship;
  • 1996 Atlanta Olympics, Nike ambushed Reebok’s sponsorship by blanketing the city’s billboards with its ‘swoosh’ symbol;
  • 2008 Beijing Olympic Games, Li Ning, a leading Chinese athlete and the founder and chairman of ‘Li Ning’ sports brand company, lit the Olympic torch during the Opening Ceremony to overshadow Adidas’ estimated $200 million investment;
  • 2010 FIFA World Cup, 36 women turned up at the Netherlands versus Denmark match wearing orange dresses, associated with the Dutch beer company Bavaria, while the official sponsor was Budweiser.

Generally, two ways of unauthorized ambushing are widely employed. One approach is by association, which refers to the use of an event’s symbol, logo, motto, etc. For example, at the 2006 FIFA World Cup, Lufthansa painted a soccer ball on the nose of many of its planes. Another way is by intrusion, which occurs when non-sponsors use publicity of the event to gain brand exposure or attract public attention. In such instances, there may be no claim of association. For instance, brewers Bavaria distributed orange branded lederhosen (shorts) to fans to wear at Holland’s matches (orange is the colour of the national team).

Ambush Marketing Prevention

Evidence suggests that the majority of cases of ambushing prove successful in creating confusion and generating awareness of ambushers’ brands among consumers. Many company executives also believe in the effectiveness of ambushing strategies. It was estimated there were around 300 ambushers during the 2006 FIFA World Cup. It was also reported that 74% of the companies planning marketing activities around UEFA EURO 2008 were not official sponsors. In addition, ambush marketing reached an all-time high for 2008 Beijing Olympics. This is an important issue for rights holders, as if the exclusive value of rights is broken by ambush marketing, the sponsor’s investment is undermined, which in turn affects the way they evaluate sponsorship value for future investment decisions.

In order to maintain event integrity and protect official sponsors from attack by ambushers, the IOC makes great efforts to combat ambush marketing through a variety of measures. The 1996 Atlanta Games introduced a “name and shame” campaign in an attempt to create public awareness of ambush marketing practices. For the 2012 London Olympics, the British government vowed to clamp down on any organizations seeking to gain benefit from unofficially associating with the Games through the enactment of The London Olympic and Paralympic Games Act, 2006 which, inter alia, banned activities, such as sky-writing, flyers, posters, billboards, and projected advertising within 200 metres of any Olympic venue. The Act also provides special statutory marketing rights that give unprecedented powers to LOCOG to prevent ambush marketing at the 2012 Games. For example, the legislation restricts the use of any combinations of the terms ‘games’, ‘2012’, ‘two thousand and twelve’, and ‘twenty twelve’ with gold/silver/bronze, London, medals, sponsor, and summer in associative marketing contexts. Breaching the Act can result in a fine of up to £20,000 for lesser breaches, or unlimited fines for more serious cases. Despite these legal restrictions and increasingly tight controls, ambushers are becoming smarter in finding unique and creative ways to associate their brands with an event, without actually infringing or breaking laws.

Questions

  1. Ambush Marketing may be seen as immoral or creative marketing practice depending on one’s point of view.

a)Imagine you are an event organizer (rights holder) or official sponsor, what arguments would you present against ambush marketing?

b)Imagine you are a company considering an ambush strategy at a major event, how would you justify this approach?

  1. What factors do you feel would influence consumer opinion, either positively or negatively, once they become aware of a company using ambushing strategies?
  2. Is legislation likely being sufficient to prevent ambush marketing at London 2012? If yes, justify your reasoning. If no, what additional measures could be put in place to limit the opportunities for ambush marketing?

This case was prepared by Ran Liu and Dr Des Thwaites Leeds University Business School.

Appendix 1 Category of Ambush Marketing Strategies

Category / Definition
I / Predatory Ambushing / The direct ambushing of a market competitor, intentionally and knowingly attacking a rival’s official sponsorship in an effort to gain market share, and to confuse consumers as to who is the official sponsor.
II / Property Infringement Ambushing / The intentional use of protected intellectual property, including trademarked and copyrighted property such as logos, names, words, and symbols, in a brand’s marketing as a means of attaching itself in the eyes of consumers to a particular event or property.
III / Associative Ambushing / The creation or use of imagery / design / slogan / terminology / values / theme / parallel event / people associated with the event in order to suggest an allusion that an organization has links to an event or property, without making any specific references or implying an official association with the property.
IV / Promotional
Ambushing / The creation or use of marketing campaigns at or around the time/place of an event in order to promote a brand and maximize awareness, while turning attention away from official sponsors and the event itself.
V / Sponsor Ambushing / The marketing communications activities by sponsors above and beyond what has been agreed in the sponsorship contract to infringe upon other official sponsors or to pre-empt possible ambush marketing campaigns by rivals, including sub-category ambushing, pre-emptive ambushing, and sponsor self-ambushing.
VI / Accidental Ambushing / The incorrect consumer identification of a non-sponsoring company as an official sponsor, unknowingly or inexplicitly, based on a previous or expected association with an event or property.

Adapted from Burton & Chadwick (2009)