$137.8B U.S. ad spend for top 200 advertisers
John Coates, VP of the International Olympic Committee, this week slammed Brazil for being critically behind in its preparations for the 2016 Rio Games -- saying they are "the worst I've ever seen."
When it comes to the Olympics and FIFA World Cup, I'll heed the advice of the Steve Miller Band and "Take the Money and Run." While these mammoth events continue to draw billions of fans, the mounting costs and increasing problems equate to a huge gamble. And things are only getting worse.
The warnings about Rio follow a Winter Olympics in Russia where whatever could go wrong did go wrong. Whether it was political outrage over gay rights or athletes breaking out of their hotel bathrooms because of faulty locks, problems added up quicker than the national debt.
And this is not to mention the controversy over Russia spending a lavish $50 billion on the Games. Nevertheless, for better or worse, global brands remained tethered to the Olympics. It's time for a divorce. Big companies need to realize they're getting the short end of the stick in a stale relationship.
Sponsorships lack creativity
Sponsorships are a one-size-fits-all marketing tactic that comes at a steep price. According to Money magazine, corporations pay an estimated $100 million to become a major Olympic sponsor. This is just to get their foot in the door. As John Ivey, managing partner at Boston-based sports marketing consultancy AMM put it, "The rights fee is really on the right to spend more money."
And the Games are dirt cheap compared with FIFA World Cup, for which six FIFA partners will spend an estimated $730 million for rights in 2014 -- with ROI hard to measure. Granted, 4 billion fans are expected to tune in (think Super Bowl every day for more than a month), and the event will create a marketing frenzy around the world. I don't argue this. I just challenge companies to rethink their alignment.
A great example of ingenuity: the Brazuca ball by Adidas, which will be used in the World Cup and has taken on a life of its own. Assuming an identity on Twitter, Brazuca interacts with the likes of Real Madrid striker Gareth Bale, who thanked the ball online for his recent game-winning goal against Barcelona.
Politics may outweigh investment
Political risks may end up costing sponsors more than the millions of Benjamins they're spending without pause. Fast forward to 2022, and the World Cup scheduled in Qatar is already making negative headlines. Alleged bribery tainted the bidding process and 400 migrant workers have already died in the construction process.
In an era of global unrest, it's mind-boggling that companies still hitch their wagons to antiquated ways of the past. Companies need a new, impactful way of marketing that affords flexibility, self-reliance and connection.
What if a company passed on sponsorship and invested instead in a country hosting a major sporting event? Or, perhaps spending money on experiential marketing to connect with fans in a meaningful way? Why not take a harder look at a mobile platform that could build brand and support human rights simultaneously?
Companies should give more credence to charitable contributions in host countries. For example, there are more than 300 Ronald McDonald houses all over the world, including Brazil, where millions will gather this summer, setting the stage for this kind of giving. It's a strong idea that brands are warming up to. Also, take what Sony did in 2010: The technology giant donated laptops, TVs and technical equipment to a network of development projects across South Africa.
Scrap the old playbook and create a new plan
Big corporations have an opportunity to walk away from sponsorships of old and make a statement. Small companies have the chance to use innovative marketing to get in the game and capture the imagination of fans.
Just because major sporting events dangle the carrot, doesn't mean companies have to chase it. It's time to look beyond obvious, been-there-done-that marketing and create authentic campaigns that produce meaningful results.