SBJ/20100201/This Week's News

Revival of Olympic ambush marketing shows power of Games

Alleged ambush marketing campaigns by Subway and Verizon Wireless drew a strong rebuke last week from the U.S. and International Olympic committees, but they also delivered both organizations a strange sense of relief and validation.

After all, it has been a long time since either organization needed to rebuke an ambush campaign in the U.S. There were no significant ambush marketing campaigns prior to the Beijing Games, making it more than four years since the USOC last reprimanded a non-Olympic sponsor for infringing on Olympic rights.

“Does it validate the fact that the Olympics are still a powerful marketing tool? You could say that,” said Gary Pluchino, IMG senior vice president. “It certainly shows there is corporate interest out there and people want to associate their products as near as possible to the Vancouver Games.”

Prior to the 2008 Beijing Games, Olympic sponsors and non-Olympic sponsors alike were reluctant to associate with the Games because of criticism by human rights groups like Dream for Darfur and protests during the Olympic torch relay. But ahead of the Vancouver Games, there have already been two cases of alleged ambush marketing by Subway and Verizon Wireless, and Under Armour has tried to link itself to the event by using imagery of Olympic skier Lindsey Vonn.

The uptick in ambush marketing reflects not only the Olympics’ ability to move past the controversy that preceded the Beijing Games but also the success of those Olympics, which averaged a 16.9 rating and 27.7 million viewers over 17 prime-time telecasts on NBC. It also reflects the heightened interest anticipated for a North American Games with a friendlier time zone.

“You have to take it as a backhanded compliment,” said Timo Lumme, the IOC’s managing director of television and marketing services. “The Olympic telecast and the Olympic Games is an important event that attracts a lot of attention.”

Subway and Verizon’s campaigns are just the latest in a long line of efforts by companies hoping to benefit from the Olympic marks without paying to officially associate with the Games. Instead, each paid to associate with Olympic stakeholders who allowed them to affiliate with the Games.

USOC chief marketer Lisa Baird said the organization has contacted Subway and Verizon Wireless, but she declined to say whether or not those companies would change their ads in any way. The USOC has not contacted Under Armour.

Ads by Subway (top, with Michael Phelps) and
Verizon have drawn the ire of the IOC and
USOC and their sponsors.

“There’s clearly a right way to use [Olympic athletes] and a way that associates with the Olympics that is not OK,” Baird said. “We’re watching it very vigilantly.”

Currently, Subway is running a commercial that features swimmer Michael Phelps swimming his way across land toward Vancouver “where the action is this winter.” Though the idea of a swimmer churning through streets toward the Pacific Northwest might strike some as absurd, it struck worldwide Olympic sponsor McDonald’s as an inappropriate infringement on the company’s association with the Vancouver Games.

“It’s parasitic marketing because what Subway’s doing is creating the impression that somehow they’re affiliated with the Olympics and Olympic hopefuls,” said Rob Prazmark, a longtime Olympic marketer and founder of 21 Marketing. “If successful, they damage the very vehicle that generates real revenue for the training of Olympic athletes.”

A McDonald’s spokesman said the company backed the IOC’s effort to “defend against ambush marketing tactics, which only hurt the Olympic Movement and athletes.”

In a statement, Subway said: “Subway disagrees with the USOC’s perspective and the conclusions being drawn from it. We are well within our rights of utilizing our marketing assets, which include Michael Phelps who has been a fan of Subway for many years. Since late 2008, Phelps has been part of several Subway marketing campaigns and we are looking forward to continuing to work with him throughout 2010 and beyond.”

Peter Carlisle, Phelps’ agent with Octagon, said: “Subway’s been a great supporter of Michael and we abide by the rules. We try to make the most we can within the space left for athletes. Through deals we generate in that space, these athletes get the funding necessary to compete.”

In the case of Verizon Wireless, the company is airing a commercial that shows a U.S. speedskater being pulled to victory by the power of Verizon’s red, 3G network. That commercial has upset the USOC’s official telecommunications partner, AT&T, which is depicted in the commercial as the network slowing down the competing speedskater.

Verizon cut a four-month sponsorship agreement with U.S. Speedskating in order to develop the ad. Company spokeswoman Brenda Raney said Verizon believes the commercial merely exercises its right to acknowledge its U.S. Speedskating sponsorship. She added, “We are an ethical company and we take great pride in conducting our business ethically.”

Verizon’s deal with U.S. Speedskating is a challenge for the USOC. The organization annually contributes money to each national governing body, but it doesn’t fully fund NGBs or buy out NGB marketing rights. Because those NGBs are autonomous, they can look to non-Olympic sponsors to help fund their operations.

“If [Verizon] wants to sponsor speed-skating, they should support speedskating year-round and not just for four months,” Prazmark said. “But until the United States Olympic Committee figures out a way to subsidize NGBs’ lost revenue, they will be allowed to contract competing brands, and parasitic marketers will be able to market around the Olympic Games.”

Staff writer Terry Lefton contributed to this story.

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