IBM Corp.âs VP of worldwide market intelligence, Gary Bridge, has a thoughtful, understated way of expressing himself that befits his former job as a psychology professor. But ask him what marketing value Big Blue expects to get from being one of the global sponsors of Olympic Games in Sydney and he gets downright sanguine.
ââI can cite zillion-dollar deals when we had time with senior customers at these kinds of events,ââ he said. ââIn Sydney, all of our top management is hosting leadership of our biggest customers. Itâs a wonderful time to hear what theyâre trying to achieve.ââ
For the whoâs who list of b-to-b marketers in Sydney, itâs zillion-dollar deal time, indeed. Or at least close to it.
Five b-to-b giants are paying the International Olympic Committee between $40 million and $65 million each to be primary sponsors for the Games, which begin Friday. Executives from IBM, Visa International, United Parcel Service of America Inc., John Hancock Financial Services Inc. and Eastman Kodak Co. say the Sydney Games provide a global b-to-b marketing opportunity that simply cannot be had anywhere else.
Marketing experts agree
ââThere are very few opportunities like Sydney, where you can showcase your technologies and be part of a global culture,ââ said Philip Kurien, director of client services at Frankfurt Balkind. ââItâs widely coveted. This allows them to reach all their target audiences in one setting.ââ
Several b-to-b companies that are not IOC global sponsors are launching major ad campaigns tied to the Games. Bank of America Corp., for example, this week will break a $100 million TV ad campaign to coincide with the start of the Games. But the IOCâs global sponsors get heaps of marketing clout that other companies do not.
IBM, Visa and the others can use the coveted Olympic rings logo in all of their advertising and are currently doing so in TV ad campaigns around the globe.
The IOC also gives its global sponsors prime ground-zero marketing slots in Sydney. Kodak will run a mammoth photo-processing and technology center aimed at professional photographers and doctors. UPS has exclusive parcel shipping rights to the Games and will have scores of corporate kiosks set up throughout the city.
Many b-to-b executives are most keen on the corporate hospitality rights IOC sponsorship grants them. High-level schmoozing in Sydney, apparently, is every bit as valuable as a traditional b-to-b ad campaign. In fact, they say, it is as targeted a marketing opportunity as a company can get.
ââWeâre using the Games to host a number of people from key third-party distributors, and tying in business meetings,ââ said Steve Burgay, VP-corporate communications for John Hancock. The Boston-based company is in the midst of a massive push to get more third-party distributors, such as independent financial advisers and brokerage firms, to sell its financial products.
Hancockâs is a fiercely competitive--and immensely lucrative--business where glad-handing is valued much more highly as a marketing tactic than traditional advertising.
A few months from now a broker will presumably remember his complimentary front-row seats at, say, a U.S.-Russia water polo match, or sipping a brisk chardonnay while overlooking Sydneyâs Darling Harbour, when deciding whether to sell his client a Hancock fund or some other companyâs fund.
It is also notable that all those interviewed said that last yearâs Salt Lake City IOC bribery scandal has cast little or no pall on the Sydney Games or its b-to-b sponsors.
ââSalt Lake was a behind-the-scenes prelude, a regretful situation. But for any company sponsoring the Olympics in Sydney, it will have no affect at all,ââ said Jeff Taufield, senior partner at Kekst & Co. In fact, only one top b-to-b sponsor--Hancock--stopped using the Olympic rings in its advertising when the scandal erupted. It has since reinstated them.
ââWe, at the time, were very unhappy with the IOCâs reaction to the scandal,ââ Burgay said. ââAnd the reforms the IOC enacted in December we felt were a step in the right direction.ââ
Also, the corporate garishness so associated with the 1996 Games in Atlanta does not resonate with the marketers in Sydney. Nor has it made them curtail Olympic spending for fear of an advertising backlash, as some marketing hand-wringers predicted would happen. Indeed, sponsorship for the 1998 Nagano, Japan, and Sydney Olympics hit a combined $605 million, up from $400 million for 1994 Lillehammer, Norway, and 1996 Atlanta Games.
At least one b-to-b marketer, Visa, cited advertising as the top reason it became a global sponsor.
Visaâs global reach
Visa Internationalâs Sydney sponsorship is being put to use in advertising campaigns around the globe. The Foster City, Calif.-based organization for the past year has been running Olympic-themed ads not only in the U.S. on NBC, which is broadcasting the Games, but also on local TV networks throughout Europe, South America, Asia and Australia.
ââWe can leverage the Olympic brand in 200 countries. Weâre in 53 now, an all-time high for us,ââ said Scot Smythe, Visa VP-international event marketing. Visa began sponsoring the Olympics in 1986, prior to the 1988 Games in Seoul, South Korea.
The ads have resulted in huge boosts in commercial and consumer card business, Smythe said. For example, Visa has recorded a 31% jump in b-to-b and retail card usage in the U.K. since 1998.
Visaâs Olympic advertising clout is compounded by its unique corporate structure. It is jointly owned by some 21,000 financial institutions, all of which may use the Olympic rings in their advertising. Many international b-to-b banks, such as the International Commercial Bank of China, Bank of America, and Barclays plc, have done just that.
UPS is flaunting its rings in TV ad campaigns on NBC and the Canadian Broadcasting Corp., which is also televising the Sydney Games. UPS has also done Olympic-themed direct mail campaigns in some 30 countries, said Susan Rosenberg, Olympic spokeswoman for UPS. ââWeâre focused on raising awareness of UPS as a global company with operations and employees around the world,ââ she said.
Kodak is using a similar global advertising strategy. It is running Olympic ads on NBC and local Australian networks, said Manuel Rivera, director of corporate partnerships.
IBMâs last Olympic fling
Big Blue executive Bridgeâs Olympic accolades notwithstanding, IBM says the Sydney Games will mark its final Olympic sponsorship. Officially, company brass cites the Olympic Gamesâ high cost as one reason for pulling out.
ââThe reason is that, looking forward, we could not justify the enormous investment based on the available marketing return,ââ said Craig Lowder, director of communications-IBM Olympic and sports sponsorships.
ââOne of the reasons we go to the Olympics is for brand awareness,ââ Bridge said. ââItâs at a very high cost for a message weâve already presented.ââ
The executivesâ contentions ring true. IBM has been an Olympic sponsor since 1960. Surely there is little to be gained this year that couldnât have been had in Olympics past.
Another reason for IBMâs cutoff, however, is an ongoing technology dispute it has had with the IOC.
Since 1993, IBM has been the IOCâs Worldwide Information Technology Partner. This has meant that IBM has, among other things, handled most of the on-site technology at Olympic events. In 1998 IBM asked to extend this relationship to include sponsorship of the IOCâs Internet projects, some of which Big Blue had built, including the main Olympics Web site (www.olympics.com).
The IOC balked and also tried to charge IBM extra for Web-related Olympic marketing privileges, prompting IBM executives to end the relationship. IBM does mention its building of the main Olympics Web site in some of its TV advertising.