Olympic sponsors fire up the torch relay

The longest, most commercialized in history

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SHANGHAI--The 2008 Olympic Games are still nine months away, but for three global sponsors--Lenovo Group, Coca-Cola Co. and Samsung Electronics--the starting gate is a lot closer. They are gearing up for the biggest, most commercialized torch relay in Olympic history.

"The relay forms a vital part of the strategy for these companies in the lead-up to the games and gives a sponsor more ammunition to work with, it helps take Olympic spirit into markets, locally and globally, to get closer to consumers,” said Scott Kronick, president-China at Ogilvy PR in Beijing.

The Beijing Organizing Committee for the Olympic Games has organized the longest-ever relay in Olympic history. After the torch is lit in Olympia, Greece, in March 2008, it will be carried by torchbearers in 23 cities in 20 countries on five continents, including an attempt to bring the Olympic Flame to the highest peak in the world, Mount Everest. It will also pass through 113 cities in China before the summer games kick off in Beijing on Aug. 8, 2008.

As official sponsors of the torch relay, Lenovo, Coke and Samsung can ride on the coattails of one of the most emotive aspects of the Olympics. Apart from the symbolic opening and closing ceremonies, it can be argued that no aspect of the games creates a lump in the throat of millions of people around the world as often as the sight of the torch as it passes from hand to hand.

Building bonds with consumers
“The torch relay creates so much emotion and is so engaging for consumers, the torchbearer nomination campaign has attracted many people through their desire to participate. That helps us to build a bond with consumers,” said Alice Li, VP-Olympic marketing and head of brand communications, China in Beijing for Lenovo, which acquired IBM's personal computer business for $1.25 billion in 2005. This week, Lenovo is in the final stages of nominating torchbearers for the 1,500 spots in China and overseas that the company was allocated by the Olympic Committee.

By stoking interest in the torch relay, namely by announcing the winners of hotly competitive torchbearer contests, Lenovo as well as Coke and Samsung are taking the games out of Beijing, where Olympic fatigue is already setting in, and into the countryside, where it’s heating up.

“Seventy-one percent of Chinese expressed an interest in taking part in the torch relay if they were given the opportunity in our latest wave of research,” said Greg Paull, partner at R3, a Beijing-based consultancy that tracks Olympic branding. “Three months ago, that figure was just 50%. The relay is one of the few ways people outside Beijing can see the Olympics coming to their country."

Despite spending “tens of millions of dollars” on the right to sponsor the torch relay (the amount is a closely guarded secret) all three companies, and quite a few other non-torch sponsors, are confident the investment of money and time on the relay is a good move, he said. “They see it as one of the few Olympic events that will reach so many people. It will touch 100 million on the ground in China, making it a unique marketing opportunity for concerts, sampling, VIP treatment of coveted suppliers and customers.”

Torchbearer contests
All three sponsors are eagerly leveraging one part of the torch relay that can connect its brands with consumers, partners and employees--competitions to become a torchbearer. Each can nominate 1,500 people to carry the torch during its global spin.

The torch relay “is only one part of our Olympics, but it’s very important,” said Juhwan Kim, managing director of Samsung’s Beijing Olympic office. “It has more extension for us than other activities, in terms of the timeline and geography. We can do marketing all over the world, plus in all of China, for three to four months.”

Samsung began its torch relay selection in August 2007 by using a mobile interactive platform. (Samsung also sponsored the relay for the Olympic Games in Athens in 2004 and Torino in 2006). This year's contest marks the first time the Olympics is using a mobile platform for efforts like an Olympics knowledge contest. Samsung China plans to select 1,112 torch bearers from mainland China alone, while the rest will be assigned to nine regions including North America and Europe. In an essay contest, Samsung will be looking for candidates who reflect the company's theme “Push the Limit for a Better Life.”

Coke, meanwhile, has launched a public voting program for its torchbearer selection on the internet, through which 1,188 Chinese citizens will become torchbearers and escort runners next year, according to David Brooks, VP-general manager of Coke's Olympic Project Group in Shanghai.

They can participate in the nomination and selection process through the iCoke Chinese web site, www.icoke.cn, as well as local selection activities organized by Coke's bottlers across the country, one way the U.S. beverage giant is leveraging the scope of its bottler network and national distribution chain within China. All 31 bottlers in the mainland are organizing marketing programs in their home markets to make next year’s torch relay a local event.

Apart from its own internal and partner programs, Lenovo has held open competitions by teaming up with CCTV in the local Chinese market, and with China Daily, the country’s state-owned English-language newspaper, to grant spots to expatriates living in the mainland. Lenovo is also partnering with Google to fill spots overseas in 10 major markets. Winners have included ambassadors and senior executives at multinational corporations, said Ms. Li.

In a sense, Lenovo has already held one torch relay. The company designed the torch itself and has taken it all over China on an elaborate road show that has attracted enormous attention from consumers and local media.

Since the torch was unveiled in May 2007, awareness of Lenovo’s sponsorship of the torch relay has grown “from zero to 35% of all Chinese consumers,” said Ms. Li. “This is a very effective development of awareness.” It hasn’t hurt sales either. Last week, Lenovo posted a better-than-expected 177% jump in net profit year-on-year for the third quarter.

Non-torch sponsors also activating relay
Other Olympic sponsors are tapping into the torch relay on a smaller scale. Depending on their level of sponsorship, and their status as a sponsor or a supplier, they received at most a couple dozen spots. Also, they are not allowed to promote their spots publicly and may only dole them out through internal contests or incentive programs, said William Zhang, Beijing-based director of H-Line Ogilvy, a joint venture between Ogilvy Group and a local PR firm.

Even so, companies like Visa International, Adidas and Volkswagen are finding value in the torch relay. The German automaker, for instance, is the exclusive provider of vehicles in China for the Olympic Games.

"We can see in the torch relay a huge challenge, it's almost a nightmare logistically. It will be very complex for the organizers to activate the different networks," said Pan Qing, director of Olympic marketing for Volkswagen Group in Beijing. VW is using its torchbearer slots "to motivate" its dealer network in China, said Mr. Pan. So is Adidas, one of the most active Olympic sponsors in China.

"We have torchbearer spots we can use as an internal motivation tool, like rewards for staff in China who best display the values of the Olympic movement," said Erica Kerner, Beijing-based director of the German sportswear marketer's Beijing 2008 Olympics Program.

For the three main sponsors, however, the torch relay simply offers superb on-the-ground marketing opportunities in China, said Ogilvy's Mr. Kronick. "This market is all about activation right now, and it speaks to that type of execution, getting into local markets, city by city, allowing sponsors to do things in those markets that it's already doing, but in a much more relevant way."
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