The other competition at the Olympics: sponsorship

AS the world’s top winter sports gather for a show of athletic prowess in the snow and ice of Pyeongchang, Republic of Korea, the 13 worldwide Olympic sponsors who have helped fund the global spectacle are outdoing each other to capture the attention of a billion-strong television audience.

World sponsors Procter and Gamble and Alibaba have kicked off their Winter Olympic Campaigns with tug-of-the-heartstrings television adverts.

With its minute-and-a-half video “#LoveOverBias” campaign, Procter and Gamble, the makers of family consumer goods like disposable nappies and shampoos, amplified its highly successful “Thank you Mom” campaign through featuring mothers helping their children strive for their Olympian dreams, surmounting obstacles of homophobia, religious intolerance, color, poverty and disability.

Chinese online shopping company Alibaba launched its first global advertising campaign to coincide with its debut as a World sponsor for this Winter Olympics by following a similar aspirational theme.

All of this makes for great feel-good appeal for the sponsors, but both Procter and Gamble and Alibaba know that inspirational adverts alone are not enough to produce a return on investment. Because for every US$1 that a company pays in sponsorship fees, it must spend at least US$2-3 on developing an “activation” strategy.

This means a strategy that encourages consumers to engage with the sponsor company. It could involve releasing new products or creating Olympic branded packaging.

Since boosting consumer engagement is crucial, Olympic sponsors tend to be consumer-focused brand.

Although it’s complicated to measure the impact of corporate sponsorship on profitability, we can gauge the effect that brand awareness campaigns have on market share.

Good returns

And by this metric, some big consumer brands have generated good returns from sponsoring the Olympics.

Samsung used the hype around the 2012 London Olympics to launch a special edition of one of its devices and sign David Beckham as an official ambassador and sponsor the Olympic Torch Relay through Britain.

Going further back, Coca-Cola doubled its market share in Republic of Korea thanks to its strong activation strategy for the 1988 Seoul Olympics.

In 2012, to capture the teen market, Coke commissioned music producer Mark Ronson to create “Move to the Beat” a song made up of sounds by competing athletes. Fans were involved in the creation by being invited to remix the anthem and create music videos which they shared through social media.

P&G reacted to social media criticism of corporates taking over events by donating 90 percent of its Games tickets to consumers. Whether all 13 Pyeongchang “Worldwide Olympic Partners” will have a good Olympics depends a lot on each company’s motivation. If a company is sponsoring the Olympics to make itself look good, then the sponsorship will probably not deliver value.

Sponsors with a clear activation strategy, on the other hand, are much more likely to win medals for good returns on investment.

Dominique Turpin is the Dentsu Chaired Professor at IMD. Shanghai Daily condensed the article for space.