Sponsors Feel the Heat as Torch Protests Mount

Marketers Face Increasing Pressure to Take Stance on Human-Rights Issues

By Published on .

San Francisco: Torch relay route became an impromptu parade route for Free Tibet demonstrators.
San Francisco: Torch relay route became an impromptu parade route for Free Tibet demonstrators. Credit: David McNew
CHICAGO (AdAge.com) -- The protesters bedeviling the Beijing Olympics' "Journey of Harmony" may be garnering a few million dollars worth of free publicity, but the media storm hasn't yet torched relay sponsors and other marketers involved with the games, even if they might be starting to feel a little singed.

Last week, San Franciscans and the world saw chaos envelop the Olympic torch yet again. Sponsors' names were on flags draped along the planned relay route, which became an impromptu parade route for "Free Tibet" groups. International Olympic Committee President Jacques Rogge labeled the torch-relay protests a "crisis" for the games. That's seemingly bad news for the relay's sponsors -- Coca-Cola, Lenovo and Samsung -- but thus far they seem to have avoided major damage from their involvement. (Representatives from all three torch relay sponsors planned to meet in Beijing this week to discuss the situation.)

More Beijing Olympics Coverage:

Survey Takes Pressure off Sponsors
Most Are Familiar With Concerns; Think Politics and Games Don't Mix

But the damage so far seems to be contained. Evan Morgenstein, president of Premier Management Group, said that since San Francisco is the only torch stop in North America, he wasn't worried about the protests spreading throughout the U.S., but noted: "If this sort of stuff starts happening in Des Moines, we got a problem."

"There's not enough people who know who the sponsors are, so while [the sponsors] didn't get their money's worth, they won't be facing a boycott either," said Patrice Motley, principal at the executive search firm PR Motley & Associates.

The Nike approach
Farther up the West Coast, Kobe Bryant was supposed to be fielding easy questions and showing off his new ultralight Hyperdunk basketball shoe, but instead he found himself being asked for his opinion of the continuing violence in Tibet.

"There's been a lot of discussion about what our country should do ... I think we should use the opportunity to raise awareness," Mr. Bryant said. "The role that we play is to raise awareness."

His candor and eloquence drew raves from the media gallery, but it also invited an awkward follow-up about his corporate sponsor: What exactly is Nike doing to raise awareness of China's myriad human-rights, environmental and economic abuses? The short answer: not much.

"All of these issues are important, but it isn't Nike's role," said Kris Aman, general manager of the marketer's Olympics effort. "There are athletes who've been training their whole lives, and we have a responsibility to them."

Nike's predicament is hardly unique among the major sponsors of the games, who find themselves standing by the Beijing Olympics -- and, implicitly, standing by their business relationships with China -- at a time when protesters worldwide, European leaders and even all three leading U.S. presidential candidates are talking about boycotting at least part of the competition. Given that awkwardness, some marketers are now following Mr. Bryant's and Nike's approach: Call for change or awareness, but don't mention what, specifically, you'd change and don't do much of anything to spotlight trouble spots.

Take Johnson & Johnson, a top-level Olympic sponsor. Asked if the vociferous protests that met the Olympic torch in San Francisco last week gave it pause about sponsoring the games, a spokesman said, "We hope to lead by example and influence change in areas relevant to our business expertise." Asked what, specifically, it would like to change, J&J steered clear of Tibet, Darfur and Beijing smog, pointing instead to a health-education program it launched in China in early 2007.

Torch-relay sponsor Samsung said in a statement that the spirit of the relays "is alive and well" and that it looks forward to "supporting the message of peace and global harmony that the Olympic Torch embodies."

To the extent that any brand is at risk in sponsoring the Games, Lenovo is all the more so: First, it's a new brand that was hoping to build awareness through the torch relay. Now that the relay has become a referendum on China's human-rights and media-freedom policies, that's at best a wash. And, if there is ill-will aimed at brands associated with the torch or the games, Lenovo is owned in part by the Chinese government, making it a possible target rather than collateral damage. In a statement, the company struck a note similar to other sponsors, it "is proud to play a role in spreading the important values the Olympic Games embody" and that it respects "the right of people to express themselves peaceably."

Another Olympic marketer, Kimberly-Clark, found some wiggle room in its sponsorship of the U.S. team: "We're not actually sponsoring the Olympics," a spokesman said, noting that the marketer's Kleenex brand is actually sponsoring the U.S. Olympic Committee. "At this point, we are still staying committed to sponsoring them and supporting them."

To hear Publicis Groupe Chairman-CEO Maurice Levy tell it, it seems sponsors -- who want to do business in China -- are in a similar boat as politicians when it comes to the Olympics. He predicted that despite pressure, world leaders will attend the opening ceremonies. "Economics are working against any kind of boycott. They can't take a chance with the economy. China represents so much nowadays that there is no one single president who can take a risk with China. To put it in a negative way, they will have to swallow it."

A Coke spokeswoman said the soft-drink behemoth doesn't regret its role in the games. "We understand that some groups are using the Olympics as a vehicle to promote their agendas, and we support their right to express their opinions," she said. "We have been an Olympic sponsor for 80 years, and are more committed than ever to the values of the Olympic Movement -- unity, pride, optimism and inspiration."

But those values seem to be getting lost in the controversy over China.
Rich Silverstein
Rich Silverstein Credit: Darryl Estrine

"For me, it's no different than Hitler and the Nazi Olympics," said Rich Silverstein, co-chairman, Goodby, Silverstein & Partners, San Francisco, referring to the 1936 Berlin games. He argued that marketers would be better off if the Games were held only in Greece, insulating marketers from controversies, but also from potentially lucrative exposure to large, mostly untapped markets. "The United Nations doesn't rotate around the world," he said.

While Mr. Bryant and other professional athletes (as well as their sponsors) likely will ride out the storm, the controversy is putting a squeeze on one group of athletes, said Premier Management Group's Mr. Morgenstein.

"If you're a lesser-known Olympic athlete, you're getting crippled by this," said Mr. Morgenstein, who represents more former Olympic champions than any other firm. He's helped turn medalists such as Mark Spitz, decathlete Bruce Jenner and diver Greg Louganis into high-paid endorsers, and also works with current Olympians such as swimmer Amanda Beard.

Explained Mr. Morgenstein: "Small to midsized companies can't afford to buy 'the Rings,' but they usually can do a deal with a smaller Olympic athlete. But lots of them are saying, 'It's not worth it to have to be defending yourself from Darfur PR, or 'What about Tibet?' and they're reinvesting in traditional advertising."

But one thing is clear: The value of the publicity for activists is "in the hundreds of millions of dollars, I imagine," said Aaron Cohen, exec VP-media negotiation officer for Horizon Media, adding, "This could become the centerpiece of protest."

The "Journey of Harmony" isn't likely to live up to its name elsewhere in the world. The organization that's helped unleash the global chaos, Students for a Free Tibet, says it plans to continue its protests globally. "Our India network has been mobilized for protests and more civil disobedience," said director of campaigns Kate Waznow. Ms. Waznow painted a stark picture for Coke, Lenovo and Samsung. "The [torch] corporate sponsors know that if the torch goes to Tibet, they will have blood on their hands," she added.

~ ~ ~
Contributing: Alice Z. Cuneo

Will Marketers Stay Away?

As the tumult rises, so does the specter of whether marketers might stay away from advertising on NBC's broadcast of the Olympic Games.

"Will there be an impact on advertising spending? No," said Publicis Groupe Chairman-CEO Maurice Levy, who spoke last week at the IAA World Congress. "We will see some issue demonstrations here and there, but it will not [impact advertising on the games]. I think we have seen the peak."

The sentiment was echoed by a fellow IAA speaker, NBC Universal President-CEO Jeff Zucker. Asked if was worried about the protests' impact on viewers or advertising, he said repeatedly, "No."

According to NBC, the Olympics are about 75% sold, which the company said is "on pace with past games and pricing is very strong."

But media buyers suggest concerns about the economy may make selling the rest of that time more difficult than normal, and that the recent protests don't make the task any easier.

"I don't know if 75% is a great number or not at this point. They obviously have a big nut to fill there and I think a lot of what might be a challenge for them is more just marketplace driven than anything else," said Jeff Gagne, VP-account director at Havas' MPG, where he oversees sports buying.

TV executives suggested that marketers that have already committed to the Olympics will stay with the event, but those who might be sitting on the fence will sense they can wait longer and still be able to pick up ad time if they need it -- perhaps even at a bargain price.

-- Brian Steinberg and Ira Teinowitz
Most Popular
In this article: