Next year's Summer Games in Atlanta promise to be the most monumental sports marketing event in history, which is why a legion of marketers from Anheuser-Busch to Xerox Corp. have invested $40 million each for global or domestic ring rights, and why rivals are crafting marketing subterfuges that ride the coattails of the Games without doling out the sponsorship dollars.
There's a growing concern among sponsors like General Motors Corp., IBM Corp. and Sara Lee Corp. about the next year of Olympic marketing mayhem. But these worries about ambush marketing-or "parasite marketing," in current Olympic jargon-are starting to focus more on activities within the ranks of Olympic sponsors than the threat of intentional ambush efforts from outside.
A $1.6 billion problem
The blame is being placed on the Olympics, which, in their need for more money to stage a $1.6 billion mega-event, create an environment that fosters ambush activity.
These concerns were among hot topics at the Sponsorship Forum, a roundtable on sports marketing issues held earlier this month that included Reebok International and ABC Sports, as well as GM, IBM and Sara Lee. The forum was organized by Clarion Performance Properties, a sports marketing agency in Greenwich, Conn., and co-sponsored by Advertising Age.
"You're never really sure with the Olympics just how many categories they have to sell," said Tom Carmody, senior VP-general manager, North America, for Reebok, which has been struggling to close a sponsorship deal long in the works. The deal has been held up in large part by conflicts with Sara Lee. Reebok's problem is that it wants to market Olympic apparel, but that would infringe on Sara Lee's rights.
Mr. Carmody joked: "The Olympics will create a new category for you. `Athletic footwear is gone, but gee, we don't have [a sponsor for] technical fabrics in midsoles. How about a million dollars for that?'*"
Sponsors stacking up
That's no laughing matter at IBM. "We're very concerned about ambush coming from within," said Elizabeth Primrose-Smith, director of worldwide Olympic and sports operations. "They're trying to slice this roll of bologna as thin as they can, so we're all smacking up against each other."
IBM occupies a sponsorship category-technology-that's undergoing drastic change and convergence, pushing companies like AT&T and Xerox, both also Olympic sponsors, into competition in the computing and communications arenas.
Ms. Primrose-Smith said IBM has already taken exception to certain Xerox Olympic ads and is concerned about a clash with AT&T over Olympic Internet activities.
BellSouth Corp. and Scientific-Atlanta Inc., potential competitors in fast-growing entertainment and communications technologies, also hold ring rights.
Surprisingly, when it came to efforts to stop ambush marketing, there was little disagreement with Mr. Carmody's endorsement of the activity. "A well-run ambush is a fantastic marketing exercise," he said. "....I see ambush marketing as a viable alternative in every sponsorship opportunity."
Among the reasons to applaud clever ambush marketing is that it's cheaper and more easily implemented at the last minute, he said.
For its part, Atlanta Centennial Olympic Properties has been trying to minimize the oft-used and less ethically troublesome ambush tactic of sponsoring individual sports federations by coordinating those sponsorship sales with its own. Eastman Kodak Co., a global sponsor, has taken advantage, striking deals with 23 U.S. sports federations.
TV deal promotes ambushes
The Games also allow for ambush efforts because their need for a large TV rights fee makes it impossible for a network to sell media only to Olympic sponsors, opening the door to non-sponsors with advertising inspired by Olympian imagery.
"If a network spends $450 million for an Olympics [as NBC did for the '96 Summer Games], they have to make that money back," said Keith Ritter, VP-marketing for ABC Sports. "If a sponsor isn't willing to take a category off a network's hands, the odds are you'll end up with a competitor in the Olympics."
Olympic organizers intend to go after ambushers with an aggressive public relations campaign. Last week, the International Olympic Committee held a meeting in Switzerland with all sponsors to discuss PR strategy. Also, look for celebrity endorsers and a great deal of cross-promotion among sponsors to reinforce their official rights-holder status.
Some marketers believe ambush marketers should be met head-on.
"I don't think Sara Lee is willing to risk that kind of depiction in the press, that we took this tack [as an ambusher] because we didn't want to pay the money for the rights," said Jeff Bliss, president-CEO of the Sara Lee Olympic Partnership, who called upon fellow sponsors to get more aggressive with their PR to promote the Olympic movement and demonize ambushers.
Still, Mr. Bliss-pondering the potential of ambush marketing-added: "But if we could decrease the risk .... "