SBJ/August 6-12, 2012/Olympics

IOC courts Google, Facebook as it eyes social/digital space

Segment could become TOP sponsor category

The International Olympic Committee is looking to become the first sports property to land a marketing deal with Google or Facebook.

The organization hosted Google Executive Chairman Eric Schmidt last week during the London Games and has worked closely with the company since it launched a YouTube, video-on-demand channel in 2008. It worked with Facebook ahead of the London Games on a dedicated page for athletes to post personal updates during the Olympics.

The IOC played host to Google Executive Chairman Eric Schmidt in London last week.
Photo by: AP IMAGES
The work with both outlets, and the explosion of Twitter’s popularity, has prompted the IOC to consider turning social and digital media into a new category of The Olympic Partner program, which includes brands such as Visa and Coca-Cola, and had a price tag of $100 million for the 2009-12 quadrennium.

One concern, though, could be in how much a social or digital media category overlaps with a traditional broadcast agreement.

“We’re interested in that space,” said Timo Lumme, IOC managing director of TV and marketing services. “Does that mean it will translate into a broadcast rights deal or that it translates into a marketing agreement? It’s a little too early to say, but it’s something in general we’re looking at, absolutely.”

Lumme declined to say whether the IOC had held conversations with Google’s Schmidt or other companies about a deal.

Google has been considered by some properties to be a potential bidder for broadcast rights in the future, but the company has said repeatedly it’s not interested in pursuing rights deals.

The idea of signing a sponsorship deal with Google or Facebook comes as the IOC begins to re-evaluate the TOP program. The organization has not changed its worldwide sponsorships or the rights that come with it since creating TOP in 1985.

Headlines from the SBJ/SBD Olympics website


The site, which is accessible at www.sportsbusinessdaily.com/SB-Blogs/Olympics/London-Olympics, is free and will run through Aug. 13. Here is a sampling of last week’s news from the site:

Chairman Mark Lazarus defends NBC Sports’ decision for tape delay
Gymnastics agent Sheryl Shade hopes to strike gold with Gabby Douglas
Missy Franklin’s decision to remain amateur costs her $1.5M, agent says
NBC releases more Olympic ad inventory after solid ratings start
Adidas’ Hainer: Olympics help close gap on Nike, boost growth in China

Lumme said the organization will sit down after the London Games and look at ways the program could change after 2020. It will look at the way it prices deals, what assets sponsors get and how it defines categories.

Sponsors already are asking to be included in the discussion. Scott McCune, Coca-Cola’s worldwide vice president of sports and entertainment marketing, says that as brands have begun developing their own video content to promote products, they need additional rights from the IOC, including the ability to integrate their brand into swimming highlights or have access to the Athletes Village so they can film interviews with Olympians.

“The business model has to change,” McCune said. “We have to have access to content consumers are interested in.”

The IOC also has to look at the way it prices sponsorships. Deals with local organizing committees have soared in recent years. For example, Nissan reportedly spent more than $250 million to sponsor the Rio Games. By comparison, Coca-Cola and Visa will spend $100 million to sponsor both the Sochi and Rio Games.

Lumme hypothesized that the local deals were rising fast because of the markets hosting the Games. Beijing, London, Sochi and Rio are all in markets that are highly valuable to local and international companies.

“These [TOP sponsors] are getting an incredible deal,” said Michael Payne, a sports marketing executive who used to head the IOC’s marketing program. “The biggest challenge facing TOP is price disparity between global and local numbers.”

The IOC also has to decide what it plans to do with the electronics category. Acer is leaving TOP after this year, but both Samsung and Panasonic have deals that end in 2016. With both companies making tablets, the IOC has to decide how to redraw the category so that either both sponsors stay or the IOC moves to a single electronics partner.

Lumme said all of that will be done in the early part of 2013. He hopes to have a proposal developed by next summer when the IOC will elect a new president.

“We will lay our wares there [before the new president] and have a strategic discussion based on what the new president’s political mandate is,” Lumme said. “I expect an evolution, not a revolution, there.”

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