Is Olympic Sponsorship Worth the Money?

Global corporations such as Coca-Cola, Johnson & Johnson and Adidas, along with Chinese businesses like China Mobile and Bank of China have paid a total of $850 million to be official sponsors of the Beijing and Turin Olympic Games.

With Western economies slowing down, one of the main aims of this spending spree is to gain a foothold among China's middle class (numbering approximately 250 million).

But research by the China Marketing Research Group, reported in Forbes Magazine, has investigated the effectiveness of Olympic sponsorship as a tool for developing brand awareness, brand loyalty and sales. This research suggests that on these measures, Olympic sponsorship may not be justified.

The vast majority of Chinese consumers interviews “did not care” who the official sponsors were, and “did not consider official Olympic sponsorship” when buying. According to the publishers of the research, it is more important for multinationals to reach out to Chinese consumers by fitting “their image of the ideal life” and focusing on longer-term brand image than looking for a quick Olympic fix. Indeed, the research appears to contradict a prevailing belief that Chinese consumers and not brand loyal and would be easily swayed by association with the Olympic Games.

An example of this insight is that consumers, when asked to identify the official sponsor from a number of choices, often plumped for the brand that they considered “best” in the market – using already developed perceptions. Specifically, unless they could recall a specific Olympic ad for Adidas, they tended to believe that Nike (perceived to be the superior brand) was the official sportswear sponsor. Rather than splashing out on offical sponsorship, Nike appear to have gained from their association with Liu Xian, the World and Champion (and World Record Holder) in the 110m hurdles.

Perhaps this will lead to a change in tack over branding in China, and may even influence future decisions to pay huge sums to sponsor the Olympics. But then again, maybe the multinationals are not as naïve and narrowly focused as the publishers of the research imply. Perhaps for many of the Olympic sponsors, there are other strong benefits – for example the potential cost of allowing competitors to have the global platform provided by the games – or even the feelings of pride and prestige that may be experienced not by consumers, but by employees, of the official sponsors.

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