Rio Rakes in Record Sponsorship Haul, Even amid Turbulent Lead Up

Despite price tags reaching $200 million, the Olympic Games remains a rare opportunity for sponsors.

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Based on research by Gita Johar, Michel Tuan Pham, and Kirk Wakefield
The Maracanã Stadium in Rio de Janeiro, home to the opening and closing ceremonies of the 2016 Olympic Games

marchello74 / Shutterstock.com

Every Olympics has its share of controversy, but the drum-beat of bad news leading up to this summer’s games in Rio de Janeiro seemed especially worrying. Political instability and a sharp economic downturn in Brazil compounded ongoing concerns over Rio’s readiness to host the games. The outbreak of the Zika virus convinced several top athletes to pull out of the event, including American basketball stars like Steph Curry and LeBron James. A group of Brazilians, citing ISIS as inspiration, were arrested on suspicion of plotting a terrorist attack just days before the start of the games, and some Olympic venues, like, the city’s Guanabara Bay, are reported to still be badly polluted.

All of that could be particularly worrying for Olympic sponsors that shelled out millions to have their name associated with the games. But once the Olympics start, the spectacle of a truly global competition tends to eclipse whatever problems led up to the event.

Jarrod Moses, an adjunct professor of marketing at Columbia Business School and the president, CEO and founder of United Entertainment Group explains, every Olympics brings concerns over the events’ cost and possible negative social impact on their host cities. But the positives tend to outweigh the potential risk for sponsors, both at this and previous Olympic Games.

The games are an event that people want to enjoy, and companies have become adept at tapping into the Olympics’ wellspring of positivity, Moses explained. “As a brand, once you’re involved in the Olympics you can’t do it haphazardly. You have to invest in the idea of the Olympics,” he said. “It’s not just a billboard on a venue. You need to have a plan around it that you then have to activate in the most effective way possible.”

Procter & Gamble has been notably successful in forging an unlikely connection between its range of home cleaning and personal care products and the games with its award-winning “Thank You, Mom” campaign. The campaign largely eschews images of the athletes, focusing instead on the stories of their mothers. Now in its sixth year (and fourth games), the brand has rolled out an online film series, “Raising an Olympian,” on-site activations – the P&G “Family Home,” a “home away from home” for athletes and their families – and direct spending in support of Olympians’ mothers and youth sports leagues all under the slogan “Proud Sponsor of Moms.”

P&G’s 2016 Thank You, Mom ad, “Strong.”

As Moses notes, the Olympics is, by any measure — whether of scale, scope, or the sheer goodwill the games generate — no ordinary sponsorship opportunity, and the demands that the games make on companies are altogether different from what organizations like the NFL or the English Premiere League require. Just to be named an Olympic sponsor for a single four-year cycle a company has to pony up a reported $200 million. By contrast, General Motors reportedly paid half that, $25 million a year, for their sponsorship deal with the NFL, which boasts a viewership nearly three-quarters that of the Olympics and a much longer (and more frequent) season.

This year’s Olympics has twelve official partners, including long-time sponsors like Visa, McDonalds, and Coca Cola. Below the partners sits a panoply of official “sponsors” and “supporters” alongside sponsors of individual countries’ Olympic committees. The 2016 Olympics is expected to bring in an eye-popping $9.3 billion in marketing revenue — $1.3 billion more than the preceding 2012 London games — including $4 billion just for broadcast rights and over $1.5 billion in official sponsorships.

In return, the International Olympic Committee takes unusual steps to protect its sponsors’ investments. The IOC is notoriously strict about banishing the presence — even the mere image of — non-sponsor companies and their corporate logos from official venues. In a slight loosening of the rules, this year, for the first time ever, non-Olympic sponsors can use Olympic athletes in ads during the games, but the IOC’s “Rule 40” prevents them from using Olympic footage or iconography or otherwise referencing the games in any medium. Some athletes at this year’s games have further taken the step of blacking out the logos of non-sponsors on their gear.

For those companies that can afford it, the opportunity to buy a piece of the Olympic ethos — and the chance to formulate a narrative around their brand suffused with those positive feelings — is one that almost no other event provides.

“There are not many things that unify the world like the Olympics do,” says Moses. “If you’re a brand that wants to talk about unity, togetherness, and the acceptance of all people of all kinds, it’s a great platform on which to market yourself.”

The Olympics presents a diverse range of companies with a number of possible ways to reach consumers’ hearts and minds. The games are a moment of nearly worldwide good feeling and relatively benign nationalism, involving thousands of individuals whose courage, ambition, and dogged determination brands are eager to be associated with in the minds of the general public.

As Moses explains, a few companies have been especially far-sighted in how they’ve integrated the Olympics into their brand identity. Kellogg’s, which has sponsored the US team and the games as a whole off and on since 1976, regularly includes the Olympic rings on cereal boxes and uses its products to highlight US Olympians even in non-Olympic years. Having held the broadcast rights to the summer games since 1988, the Olympic rings are practically part of NBC’s logo, helping to distinguish the network from its corporate media competitors. NBC is using Rio this year to heavily market its lucrative fall primetime schedule as it seeks to recapture the top spot in the ratings after slipping last year. Even DeVry University — the for-profit university and late-night advertising juggernaut, which, in 2011, became the official education provider for the games — prominently features its nine US student Olympians in a range of ads, a focus that directly links the brand to individual Olympians’ aspirational stories.

Kellogg's support of Olympians stretches through the four-year cycle, including events like this 2012 champions tour.

Even the most carefully crafted campaign may not pay off for sponsors, though. As Gita Johar, a professor of marketing at Columbia Business School, points out, for brands, the risks of an Olympic sponsorship have more to do with the inherent gamble of shelling out millions of dollars for a single corporate partnership than any negative splashback they may face due to health or terrorism-related threat to the games themselves.

Sponsorship identification among consumers is often unrelated to a company’s actual involvement in a specific event. In one study, referenced by Johar and Pham in their work, half of British soccer fans who watched or attended an average of 13 matches (over 75 percent of the tournament) during the 2000 European Championships couldn’t recall a single event sponsor. In another survey conducted by the advertising agency Leo Burnett, subjects on average could correctly identify only 11 of the 20 sponsors of the 1998 Olympics.

That’s not just down to viewers’ faulty memories, says Johar, who has researched sponsorship identification with fellow Columbia Business School professor Michel Pham.

The factors that determine whether viewers actually associate a brand with an event they sponsor are deeply rooted in a brand’s public perception and identity, and how closely that relates to the event. “We tend to assume people will recall specific things like sponsorship ads,” says Johar. “But that’s not the way human beings work. We tend to use the easiest way available to come up with the answer.” The “easiest way” typically means drawing a connection between the event and the most prominent brands in the most closely related categories.

For a brand already strongly associated with an event, like Nike and track and field, for example, viewers will often simply assume they were sponsors, rather than referring to their memory of the event for guidance. That’ a potential free ticket to ride — and one that Nike famously capitalized on, giving Michael Johnson a brand new pair of $30,000 gold spikes for his world-record-breaking 400-meter sprint at the 1996 Atlanta games. The shoes caught the eyes of millions of viewers, all without costing Nike a cent in Olympic sponsorship fees.

Michael Johnson's $30,000 gold spikes were a marketing coup for Nike, which did not sponsor the ’96 Atlanta games. Rules on the appearance of non-sponsor brands have subsequently grown much stricter.

Opportunities like the one taken by Nike have grown rare as the IOC has clamped down in recent years, making it far more challenging to avoid the financial burden of sponsorship. At the same time, sitting out an event as big as the Olympics carries risks of it its own. Even in light of Johar’s research, and with Zika and terrorism potentially tainting the games, some companies are simply expected to be involved in the biggest event on Earth and risk having their brand identities erode if those expectations aren’t consistently met. “The games provide a positive halo effect for brands, and that can be a costly opportunity to miss out on, even if brands don’t always get correct attribution for sponsoring the event,” says Johar.

It’s counterintuitive, given the bad press surrounding the lead up to the Rio Olympics, but based on the multibillion-dollar marketing haul, brands expect the Olympic halo to shine brighter than ever for them this year.

About the researcher

Gita Johar

Gita V. Johar (PhD NYU 1993; MBA Indian Institute of Management...

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About the researcher

Jarrod Moses

Jarrod is the Founder, Chief Executive Officer, and President of United Entertainment Group. 

A seventeen-year veteran of creating brand deals...

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