Examining the Marketing Functions of the 2010 Vancouver Games: Reflections on the Development of a Marketing Legacy

Transcription

1 Cheri L. Bradish & Chris Chard Examining the Marketing Functions of the 2010 Vancouver Games: Reflections on the Development of a Marketing Legacy Cheri L. Bradish & Chris Chard Brock University, Canada The Olympic Games specifically, as facilitated by the Organizing Committee of the Olympic Games (OCOGs) provide excellent opportunities to examine a myriad of implications and the direction for both future Olympic Games in particular, and sport management practices in general. While there are a variety of functions of an Olympic OCOG, the marketing and sponsorship responsibilities are of unique interest to examine, as they can dramatically reflect considerable stakeholder support as well as affect the financial stability of the organizing committee. As expected, the Vancouver 2010 Winter Olympic Games Organizing Committee (VANOC) provided an excellent opportunity to examine the development of sophisticated sport marketing programs. Thus, the umbrella operation of the sponsorship and sales of VANOC 2010 bears considerable interest to sport marketing professionals and academic study. Further, within this structure, it is important to examine the Games-time function of the marketing unit of the VANOC OCOG, specifically, that related to the Brand Protection of the key marketing stakeholders, recently renamed Commercial Rights Management (CRM). Serving as the unit to protect the corporate investment in the Vancouver 2010 Games, this unit introduced a new and important legacy to Games marketing management, with the intent to build and protect a commercial rights model that justifies the investment of VANOC and IOC sponsors and partners, allows for community engagement and builds a legacy of sustainable commercial relationships for amateur sport. 1 Thus, the purpose of this research presentation is to build on existing studies and contemporary comment to examine the marketing and sponsorship legacy utilized by The Vancouver Organizing Committee of the 2010 Olympic and Paralympic Winter Games (VANOC), specifically examining the CRM programs, as well as discuss the implications for Olympic marketing development. This research will advance current understandings and of Olympic marketing functions. Introduction At their conclusion, the Vancouver 2010 Winter Olympic Games had achieved worldwide attention and acclaim despite some initial trepidation and consternation 2 for delivering a most successful, and inspirational, Games experience. In particular, it was well noted and experienced that the Games had united the host country of Canada in a unique and special outpouring of patriotism 3 rarely witnessed in the country s history. Aligned with the smooth and tempered functioning of the Games was VANOC. In line with previous assessments of the 2010 Organizing Committee, 4 VANOC continued to receive considerable examination throughout the Games, with much attention focused on the functional and direct legacies of the Olympic operations and experiences. Central to this paper, is a review of VANOC s marketing and sponsorship legacy of the Vancouver 2010 Winter Olympic Games. 203

2 204 Cheri L. Bradish & Chris Chard Olympic Sport Sponsorship The function of corporate sponsorship engagement relative to sport has received considerable attention in the literature over the past decade. In fact, it has become such a prevalent and accepted marketing function that leading sport sponsorship experts have suggested that there has been the death of (traditional) advertising in sport. 5 Understood as the strategic exchange between a sport property and corporate partner, 6 sponsorship undoubtedly plays a central role in the smooth functioning and operation of Organizing Committees for the Olympic Games (OCOGs), as much of the marketing revenue from these partnerships offsets the enormous operating budgets of Olympic host Committees. Of note to understanding Olympic Games sponsorship is the development and distribution of the Olympic marketing programme. Historically, the International Olympic Committee (IOC) and the Olympic Games operated with very little revenue sources from a marketing input. As of the 1980s, however, they retained their television rights and revenues that became an important source of funding for the IOC, as well as for the international sport federations (ISFs) and National Olympic Committees (NOCs). In 1985, building on the evidence of strong corporate support of the Olympic movement from the Los Angeles Olympic Games, the IOC created The Olympic Programme (TOP), a global sport sponsorship programme for multinational investment, which effectively offered a exclusive worldwide platform of access to the Olympic Rings during a four year Olympic cycle (i.e. combining both Summer and Winter Olympic Games). Estimates indicate that TOP sponsors pay between $40 and $60 million dollars (EUR) for the exclusive Olympic Worldwide Partner rights. 7 Today, the Olympic Marketing programme has seven distinct objectives (see IOC TOP Sponsors for the Vancouver 2010 Games for further information here). Table 1: Fundamental Objectives of the IOC Olympic Marketing Programme To ensure the independent financial stability of the Olympic Movement, and thereby to assist in the worldwide promotion of Olympism. To create and maintain long-term marketing programmes, and thereby to ensure the future of the Olympic Movement and the Olympic Games. To build on the successful activities developed by each Organising Committee for the Olympic Games, and thereby to eliminate the need to recreate the marketing structure with each Olympic Games. To ensure equitable revenue distribution throughout the entire Olympic Movement including the Organising Committees for the Olympic Games (OCOGs), the National Olympic Committees (NOCs) and their continental associations, the International Federations (IFs), and other recognised international sports organisations and to provide financial support for sport in emerging nations. To ensure that the Olympic Games can be experienced by the maximum number of people throughout the world through broadcast partnerships. To protect the equity that is inherent in the Olympic image and ideal. To enlist the support of Olympic marketing partners in the promotion of the Olympic ideals. Proceeds from the TOP programme are divided between OCOGs (approximately two-thirds to the larger Summer Games and one-third to the Winter Games), and the NOCs (80%), and the IOC (20%, which is less than 10% overall). From the NOC portion, it should be noted that half of this revenue goes to the USOC, according to the marketing interest and television rights generated by access to and media profile from the United States market. 8 As the IOC celebrates twenty-five years of the TOP programme in 2010, it continues to be regarded as an industry leader in global sport marketing, generating millions of dollars of revenue and a multitude of essential resources for Olympic member stakeholders and ultimately, promoting sport development and supporting Olympic athletes. 9 TOP sponsors are regarded for providing comprehensive marketing programs and essential goods and ser-

3 Examining the Marketing Functions of the 2010 Vancouver Games 205 vices to the overall functioning of the Games (see Table 2, IOC TOP Sponsors for the Vancouver 2010 Games, for further information). As a final note here, over the past ten years, considerable academic research has begun to focused on Olympic sponsorship and related marketing dimensions, including examining the elements and influences of multinational corporate investment, the 1992 inclusion of professional athletes, the growth of the Olympic brand and corresponding brand value and protection models, the development of strategic Olympic partnerships, and changing consumer demographics and viewer patterns, all reinforcing the opportunities, yet complexities, of being aligned with the Olympic marketing platform. 10 Vancouver 2010 Marketing and Sponsorship Programmes As part of the IOC hosting agreement, OCOGs are responsible for executing and managing domestic marketing and sponsorship programs, including all relevant brand management and protection responsibilities, ticketing and licensing programs, and, must also work with the IOC and other marketing functions, including broadcasting. In addition, OCOGs also absorb relevant functions in this case, marketing from the host National Olympic Committee (NOC) during Games periods as well. This section will highlight VANOC s marketing and sponsorship programmes, will review VANOC s Commercial Rights Management and brand protection philosophy and models, and finally, will highlight their marketing and sponsorship accomplishments, The marketing and sponsorship benchmarks achieved by VANOC and the 2010 Vancouver Winter Olympic Games set new standards for Olympic Games hosting. As initially indicated in the 2003 bid book, VANOC first projected to generate $200 million in domestic marketing revenues. However, by Games end, VANOC had generated over $750 million through domestic sponsorship partnerships with 75 national Canadian companies. Clearly, for a country with a smaller marketplace and business landscape (by IOC host standards), this overwhelming support of the Games and desire to strategically connect national brands to Canadian consumers via the Olympic Games was startling. While in general, this support signaled important resources and revenues for the operation of the 2010 Games, it did create the need for more sophisticated and sensitive marketing management, in particular for the brand protection division, in fact to the point, that some marketing experts questioned the over-commercialization of the Vancouver Games. Table 2: IOC TOP Sponsors for the Vancouver 2010 Games Partner Coca-Cola Acer Atos Origin GE McDonald s Omega Panasonic Samsung VISA Product Category of Exclusivity Non-Alcoholic Beverage (IOC partner since 1928) Computer Equipment Information Technology Operations Innovative Products and Services Official Restaurant Timekeeper / Sports Timing and Measurement Technologies (IOC partner since 1932) Audio/visual Equipment and Technology Wireless Communications Payment System Infrastructure Within the sponsorship domain, three primary categories of sponsorship were created by VANOC, including national partner, official supporter, and official supplier Estimates indicate that these premier sponsors invested between $50 and $200 million, in cash and/or goods and services, to be a partner with VANOC in this category (see IOC TOP Sponsors for the Vancouver 2010 Games, for more detail and specific contributions here). In addition to the three primary areas of sponsorship, there was a category for print media suppliers and, a new category for Olympic sponsorship, government partners (which included four senior government partners, two sport partners (the Canadian Olympic Committee and the Canadian Paralympic Association), four Host First Nation Partners, three Venue City Partners,

4 206 Cheri L. Bradish & Chris Chard and eleven Contributing Provinces and Territory Partners (all participating except New Brunswick). Many of these partnerships involved unique activation strategies, which often linked with community programs and/or underserved local populations Table 3: VANOC Premier National Partners for the Vancouver 2010 Games Partner Product Category of Exclusivity Investment* Bell Canada Non-Alcoholic Beverage 200 Hudson s Computer Equipment 100 Bay Co. Royal Bank Information Technology Operations 110 of Canada General Innovative Products and Services 53 Motors Petro- Official Restaurant 62 Canada Rona Home Imp rovement 68 *Cash and/or Goods and Services, approximate value, $million For VANOC, in line with Olympic marketing programmes and other Olympic Games hosts, in addition to sponsorship, marketing revenue was generated by three other primary sources that recorded record numbers during the 2010 Games: ticketing, licensing and, via the valuable television and broadcasting rights. In the area of ticketing, it is estimated that approximately 1.5 million tickets were sold, generating $257 million in revenue. 11 VANOC s ticketing department also introduced two successful distribution platforms, the Fan-to-Fan and Partner-to-Partner marketplace, which served as online forums for consumers and corporate partners ticket resale, contributing further revenue for VANOC. Under the licensing umbrella of VANOC, 48 licensees offered a range of Vancouver 2010 goods including other related licensing programs with the Royal Canadian Mint and Canada Post. Perhaps here, the best measure of the VANOC 2010 licensing programme was evident with the HBC Red Mittens campaign with more than 3.5 million pairs sold, delivering a percentage of these revenues back to Canadian athlete programming. Finally, in the area of television and broadcasting which of interest is the largest source of revenue for the Olympic movement VANOC worked closely with the IOC and their in-house host network, the Olympic Broadcasting Services (OBS) which sold rights and distribution around the world, to reach a record audience of 3.8 billion worldwide, or more directly, 1.8 billion viewers. In Canada, it was reported that 99% of Canadians watched at least some Olympic coverage, with over 22 million watching the men s hockey gold medal match. In addition, this category included digital technology, where, for the first time ever, an Olympic Games coverage via online and through mobile phones was equal to television, with over 215 million page views. 12 In short, the marketing milestones achieved by VANOC set new standards for Olympic marketing programmes, and thus provide the opportunity for further analysis and insight Brand Protection: Commercial Rights Management and Bill C-47 Integral to VANOC s sponsorship and marketing programmes, it is important to discuss the brand management and protection function of the Games, which was managed by the Commercial Rights Management division of VANOC. This division was established to protect the commercial rights of all Games stakeholders (including VANOC, the Canadian Olympic Committee, the IOC, and all marketing partners and licensees) against the misuse and/or infringement of the Games marks as well as to assess any ambush marketing activities or unauthorized commercial associations with the Games in an effort to best protect the corporate support and investment necessary to host a successful Games. 13 To support this mandate and division, VANOC worked with levels of government to enact supporting legislation of this responsibility. In particular, in partnership with this, the Federal Canadian Government passed Bill C-47: The Olympic and Paralympic Marks Act in 2007, which gave

5 Examining the Marketing Functions of the 2010 Vancouver Games 207 legal power to prosecute any infractions. Of interest, while there were several possible cases of ambush marketing and other infringements during the Games, to date, no legal action has been taken by VANOC, instead, preferring an educate and embarrass philosophy to call out those who had attempted to misuse any Vancouver 2010 and affiliated Olympic marks. Discussion Clearly, the marketing programme benchmarks achieved by the Vancouver 2010 Winter Olympic Games Organizing Committee offer interesting discussions worth further examination. In all areas related to Olympic marketing sponsorship, ticketing, licensing, and broadcasting in addition to the related responsibilities such as brand management, VANOC and the 2010 Games have undoubtedly contributed to the Olympic marketing legacy. The question here, however, remains how, and in what way? For example, as evidenced by the revenue generated through VANOC s sponsorship programme, for a smaller country much during the time of a recession was exorbitant, if not excessive. Will the 75 corporations, especially those who contributed significant dollars in the premier partner category, continue to support the Canadian Olympic movement, and Canadian athletes, in particular? Similar discussions related to the contribution of licensee partners also are important. The growing area of television and broadcasting, the most lucrative area of revenue, with unlimited opportunities in our digital age, offer important questions. Finally, the increasing powers and legal implications of Olympic brand protection models, in conjunction with government support, provide a number of important areas for further discussion, including a number of legal, ethical and moral concerns which must be examined. Conclusion Without a doubt, the Vancouver 2010 Winter Olympic Games showcased a phenomenal spectacle to the world. The Organizing Committee, VANOC, was credited for achieving a number of important Games benchmarks, many of those emerging from the marketing programmes and which offer important lessons and legacies for future sport management and sport study. As the final reports on the 2010 Games are written, it is important to closely and critically examine these benchmarks to best assess the implications and insights for future Olympic marketing theory and practice. Endnotes 1 VANOC, Commercial Rights Management Overview (Vancouver: VANOC, 2010), Robert Hardman, As Canada's Olympics Are Branded 'The Worst Ever', What Lessons Can Britain Learn for 2012? The Daily Mail, 20 February Stephen Brunt, What These Games Mean to Canada, CTV, 21 February Cheri L. Bradish, Marketing the Olympic Rings: Examining the Marketing Impacts and Expectations of the 2006 and 2010 Olympic Winter Games, Cultural Imperialism in Action: Critiques in the Global Olympic Trust. Proceedings of the Eight International Symposium for Olympic Research, eds. R.K. Barney et al. (London, ON: International Centre for Olympic Studies, 2006), T. Bettina Cornwell, State of the Art and Science in Sponsorship-Linked Marketing, Journal of Advertising 37, no. 3 (2008), Robert Copeland, Wendy Frisby and Ron McCarville, Understanding the Sport Sponsorship Process from a Corporate Perspective, Journal of Sport Management 10 (1996),

6 208 7 Francis Farrelly, Pascale Quester and Stephen A. Greyser, Defending the Co-Branding Benefits of Sponsorship B2B Partnerships: The Case of Ambush Marketing, Journal of Advertising Research, 10 (2005), All figures are in Canadian dollars unless otherwise noted. 8 Rick Staff, IOC Marks 25 th Anniversary of the TOP Programme, Targeted News Service, 26 June Dick Pound, Inside the Olympics (Toronto: Wiley Press, 2004). 10 Frank Pons, David Stotlar and Cheri L. Bradish, Marketing the Olympic Games, International Journal of Sports Marketing and Sponsorship 9, no. 4 (2008), IOC, Marketing Report Vancouver 2010 (Lausanne: IOC, 2010). 12 Ibid. 13 VANOC, Commercial Rights Management Overview, 427.