Centennial Olympics open as $5 bil event of century

By Published on .

Most Popular

"Without a doubt, this is the biggest marketing orgy I've ever seen," said a veteran sports-marketing executive reporting from Atlanta, host city for the 1996 Summer Olympics, which get under way July 19.

By the time the Centennial Olympiad ends Aug. 4, an estimated $5 billion in Olympic-themed and targeted media, marketing and related expenditures will have been spent worldwide, most of it this year.

$4.2 BIL FROM SPONSORS

Of that, the more than 40 companies that have paid up to $40 million to be associated with the Olympics will spend $4.2 billion to leverage their sponsorships.

These Olympics, the first in the U.S. since 1984, are shaping up to be the marketing event of the century, marked by excess and intense competitiveness. The "clutter factor" has every sponsor worried about getting shown up or overshadowed by every other sponsor.

"It used to be enough just to stand out among your competitors. This year, it's become a battle between sponsors," said Mark Dowley, exec VP-managing director at McCann-Erickson Worldwide's event-marketing subsidiary, Momentum IMC, New York, which works for Olympic sponsors AT&T Corp., Coca-Cola Co. and General Motors Corp.

NBC's broadcast will be the most high-profile battleground for sponsors and non-sponsors.

HANCOCK, MCDONALD'S EPICS

During the opening-ceremon-ies telecast, sponsors John Hancock Financial Services and McDonald's Corp. both will break epic 90-second spots. The McDonald's "100" spot from Leo Burnett USA, Chi-cago, shows a kid running around a track and morphing into an Olym-pic athlete, being cheered on by the crowd.

During NBC's Games coverage, Coca-Cola will air up to 30 different spots in its "For the Fans" campaign, created by Wieden & Ken-nedy, Portland, Ore.

Nissan Motor Corp. USA breaks a brand campaign during the Games with a new tagline, "Life's a journey. Enjoy the drive." The campaign from TBWA Chiat/Day, Venice, Calif., will start with teaser ads culminating in a 2-minute commercial opus airing during the closing ceremonies.

"It's bigger than 'Ben Hur,' " said an executive familiar with the commercial.

Other powers in the auto industry will use the NBC broadcast as a platform for product introductions. GM's Pontiac nameplate launches its 1997 Grand Prix July 19 with a spot from D'Arcy Masius Benton & Bowles, Bloomfield Hills, Mich. Oldsmobile will introduce its Bravada sport-utility vehicle with advertising from Burnett. BMW will promote its 1997 line of 7-Series cars in a spot from Fallon McElligott, Minneapolis.

NBC can't be accused of contributing to clutter by packing in the advertisers. In its 1992 Summer Olympic broadcast, 130 advertisers sponsored 161 hours of coverage; its '96 broadcast boasts 50 advertisers supporting 171 hours of coverage.

27.5 MILLION VIEWERS

NBC paid $450 million for '96 broadcast rights and has sold $675 million in advertising. Average price tag for 30 seconds in prime time: $550,000. Ad agency experts predict 27.5 million people will watch the Olympics each night.

Yet while Olympic sponsors like Coca-Cola, Eastman Kodak Co. and Visa International step-ped up to buy out their categories on NBC's broadcasts, most others didn't--forcing NBC to sell time to some 20 non-sponsors to meet margins.

Other non-sponsors, such as Nike, Toyota Motor Sales USA and its Lexus division, and Chrysler Corp.'s Jeep/Eagle division are getting into the Games via local ad deals with NBC owned-and-operated stations and affiliates. Total Olympic sales for NBC's station group have reached $125 million. Of the $5 billion expected to be spent on the Olympics, $2.1 billion is coming from the 10 global sponsors.

Most will spend their Olympic marketing money in the next three weeks. But sponsors like Sara Lee Corp., whose apparel and meat divisions are attached to the Games, have been integrating the Olympics into their marketing mix for months.

Sponsors are using their rights in one of three ways: brand building, consumer promotions and touting their contributions to the staging of the Games.

'EXPERIENTIAL BRANDING'

Momentum IMC is helping AT&T and GM bring their brands alive by building "experiential branding" venues in Centennial Olympic Park. Just outside this expanse of marketing mayhem in downtown Atlanta, Nike is building Nike Park, a sports theme park. Such facilities cost $10 million to $20 million, if not more, to erect.

McDonald's has one of the highest-profile efforts with a "When the USA-wins-you-win" watch-and-win promotion, in which consumers match game pieces found on packaging for soft drinks and the Arch Deluxe sandwich. Ad support began July 14 with three spots, but continues into the Olympics with 10-second promos featuring various Olympic athletes.

Sponsor IBM Corp.'s contribution of technology, products and services to the Games, and its promotion of that support to consumers and trade, is the crux of its $420 million Olympic marketing outlay.

IBM's marketing goal is to come out of the Olympics with the image as the world's hottest Internet company, said John Patrick, VP-Internet technology.

IBM BRINGS CROWDS

"I would expect that some people will begin to say that," he said, adding that, like other companies, IBM will bring "thousands" of customers for four-day visits to Atlanta to see the Games and the technology.

"The marketing of these Games represents a quantum step forward in the way companies are talking about their involvement with the Olympics," said Michael Payne, director of marketing for the International Olympic Committee. "We have very few companies merely slapping on 'official widgets of the Games' tags to their ads."

The efforts that have disappointed the IOC come from sponsors brought aboard by Atlanta Centennial Olympic Properties, the marketing arm of the Atlanta Committee for the Olympic Games. Those sponsorship deals were "slapped together at the last minute to generate revenue," Mr. Payne said.

NO PUBLIC FUNDS

ACOG decided to raise the $1.7 billion needed to build the venues and stage the Games from ticket sales, sponsorship/licensing broad-cast rights revenue and private donations, and not to take any public money.

Mr. Payne is also critical of the city of Atlanta for its efforts to market the metropolitan area to companies, increasing the clutter factor and bringing non-sponsors to the city, from the House of Blues to a bevy of beer companies.

In general, non-sponsors will spend upwards of $500 million in marketing to reap Olympic benefits. The IOC detests so-called "parasite marketers" such as Fuji Photo Film USA, which last week incurred the wrath of Olympic organizers about outdoor boards featuring U.S. decathlete Dan O'Brien. Angotti, Thomas, Hedge, New York, is Fuji's agency of record.

Actually, Atlanta is practically in the past for the IOC, already looking ahead to the next century.

Coca-Cola, IBM, Kodak and Visa are signed up for the 1998 Winter Olympics in Nagano, Japan, and the 2000 Summer Olympics in Sydney.

$100 MILLION SPONSORS

And as soon as the Salt Lake City Organizing Committee finalizes its sponsorship strategy for the 2002 Winter Olympics, the IOC will assist the U.S. Olympic Committee in selling unprecedented eight-year USOC sponsorship packages, valued at upwards of $100 million.

Joining them on these sales calls will be NBC, which has paid about $4 billion to broadcast the Olympics from 2000 to 2008.

"We're looking for longer-term deals," said Dick Ebersol, president of NBC Sports. "There's a rich pool of about 12 advertisers that we'll be concentrating on."

Contributing: Kim Cleland, Alice Z. Cuneo, Jean Halliday, Bradley Johnson, Judann Pollack, Todd Pruzan and Michael Wilke, as well as Jennifer Waters of sister publication Crain's Chicago Business.

Copyright July 1996 Crain Communications Inc.

In this article: