Under the Influence

Marketing The Olympics

This week as the Sochi Winter Games get underway, we look at the long and interesting history of Olympic Marketing. From the original ad that appeared at the first modern Olympics in 1896, the need for sponsorship money has been an uncomfortable bedfellow for Olympic ideals. As the Olympics get more and more expensive, the need for more and...

This week as the Sochi Winter Games get underway, we look at the long and interesting history of Olympic Marketing.

From the original ad that appeared at the first modern Olympics in 1896, the need for sponsorship money has been an uncomfortable bedfellow for Olympic ideals.

As the Olympics get more and more expensive, the need for more and more revenue grows. As a result, sponsors have been invited deeper into the Games.

That desire for revenue has made for some remarkable stories, some surprising decisions, some controversial Official products, and a fascinating and tension-filled relationship.

At the 1948 Olympics in London, England, John Copley stood at the winners podium.

He had competed for Great Britain, and had won a Silver Medal.

John Copley and his wife, Ethel.
Source: wikipedia

These Olympics weren't just prestigious, they were symbolic, as these were the first Games since 1936. The conflict and destruction of World War II had interrupted the international event for 12 years.

So as John Copley waited for his medal, it was an extra special moment.

Not only was he winning a medal in his home country, John Copley was also 73 years old.

Making him the oldest Olympic medalist in history at that time.

He won his medal competing in the Mixed Paintings, Engravings and Etchings category.

Yes, John Copley had won a Silver medal for a piece of art he created, titled, "Polo Players."

Starting with the 1912 Olympics, art was a competitive category. The founder of the modern Olympics, Pierre de Courbertin wanted participants to compete in sport rather than war.

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The founder of the modern-day Olympics, Pierre de Courbertin. And his moustache.
Source: sportlecitoyenette.blogactiv.eu

He also wanted Olympic competitors to participate with both mind and body, and therefore wanted to combine both art and sport at the Games.

The "Art" competitions were divided into five categories:

And architecture.

There were rules.

Every piece of art had to have a sport theme. Which probably put a crimp in the architecture category.

There was also stiff competition. By 1928, judges had to adjudicate over 1,000 entries in the Painting and Sculpture categories alone. The competitors didn't have to create the works on the spot, they just had to submit them, providing they were new, previously unseen works.

But all good things must come to an end.

The 1948 Games were the last to have Art competitions. The reason? Most of the artists were professionals - meaning they sold art to make a living - and the Olympic charter now mandated that only amateurs could compete. So art was no more.

The Olympics have come a long way.

So has Olympic marketing. From the first ad at the first Olympics in 1896, to the $100 million dollar advertising contracts of the 2014 Games, sponsorship money has always been a contentious issue.

On one hand, the Olympics are one of the most expensive events to stage in the world. On the other hand, sponsorship money makes it possible.

But there's a price to pay when there's a price to pay.

And how marketing has evolved at the Olympics is a fascinating story...

The modern Olympics, as we know it, began in 1896.

The aforementioned Pierre de Coubertin had a plan to unite the world, and founded the IOC, which stood for the International Olympic Committee.

Inspired by the ancient Olympic games in Greece 1,500 years before, de Coubertin and the IOC decided to hold the first modern Games in Athens.

Screen Shot 2014-02-06 at 5.20.52 PM.png
The first modern Olympics were held in Greece in 1896.
Source: edgecastcdn.net

On April 6th, 1896, 241 male athletes from 14 nations - there were no women - participated in 43 events.

Since the games were brand new and not well publicized, contestants were not chosen by their countries. Instead, they came individually and at their own expense. Some of the contestants were even tourists who happened to be in the area.

While the first modern Olympics was getting off the ground, the first Olympic advertising was, as well.

Several companies bought ads in the first official souvenir program, including Kodak, who would continue to be a sponsor for many years to come.

Four Olympics later, the 1912 Games were held in Stockholm, Sweden.

Screen Shot 2014-02-06 at 5.30.22 PM.png
Stockholm won the 1912 Olympics because, well, they were the only city to make a bid.
Source: bryanpinkall.blogspot.com

2,408 athletes - including 48 women - competed in 102 events.

At the Stockholm Olympics, 10 different companies paid for the right to advertise at the Games.

The Granberg Industrial Art Company, for example, paid $3,600 for the right to use photographs of the competitions for commercial purposes. Another company paid to install their weight scales for the recreational use of the spectators. This early sponsorship money contributed to almost 5% of the total revenue at the Games.

Clearly, the concept of sports sponsorship was emerging, as companies were eager to get their logos in front of large sporting audiences.

One other important marketing opportunity became highly prized during the Stockholm games - it was the first time companies were given the right to use Olympic symbols on commercial merchandise.

The 1924 summer Olympics were held in Paris.

They were the first to be broadcast live on the new-fangled medium called Radio.

The Olympic village was also created for these Games, and the motto of "Faster, Higher, Stronger" was used for the first time, a phrase that was coined by a Dominican priest.

The Olympic village was created for the first time at the 1928 Games.
Source: YouTube

The 1928 Olympics were held in Amsterdam and are important in the history of the Games for several reasons.

The parade of nations began at these Games, starting with Greece, and ending with the host nation, a tradition that continues to this day.

Screen Shot 2014-02-06 at 5.42.10 PM.png
The Olympic flame was lit here for the first time.
Source: wikipedia.org

There were important marketing firsts, as well.

Balance sheets from the games indicate revenue from advertisements on access routes and kiosks close to the stadium.

It was also the year Coke came onboard as a sponsor. This would mark the beginning of the longest continuous relationship between an advertiser and the Olympic Games in history - a relationship that is contracted to the year 2020.

In 1928, Coke not only provided soft drinks, it sold them through restaurants and kiosks they were allowed to operate during the Olympics.

Screen Shot 2014-02-06 at 5.43.32 PM.png
Coke is allowed to sell product on the grounds of the Olympics for the first time at the 1928 Games.
Source: wikipedia.org

That was a significant development in the parameters of Olympic sponsorship. Advertisers were now allowed to make money on the Olympic grounds.

The 1932 Los Angeles Olympics were the first to post a profit.
Source: YouTube

The effect of growing U.S. sponsorship revenues is evident during the 1932 Olympics in Los Angeles. A local company called the Helms Bakery paid for the right to produce an Olympic-themed product, called, "Helms Olympic Bread." The success of this product convinced the IOC to investigate further commercial possibilities.

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Helms Olympic Bread was an official product that showed there was big money in sponsorships.
Source: qma.com

But it was the next Olympics held in Berlin in 1936 that would see the introduction of a technology that would not only transform Olympic audiences, but also impact Olympic marketing revenue for all time.

The 1936 Olympics were very controversial because the Nazis had come to power.
Source: YouTube

The IOC chose Berlin to host two years before Adolph Hitler came to power. As a result, with the Nazis now in place, the 1936 Olympics became very controversial, with many Jewish athletes eventually boycotting.

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The Olympic torch was first introduced during the 1936 Berlin Olympic Games.
Source: news.bbc.co.uk

But the 1936 Olympics offered an even bigger technological milestone - they were the first to ever be televised.

The opening ceremonies of the Berlin Games were the first to be televised.
Source: YouTube

The opening ceremony of the Games was shown live on closed-circuit television in halls and cinemas in and around Berlin. Over 100 hours of competition was watched by 162,000 viewers.

That seminal moment would impact the Olympics for all time, as we'll soon see.

It would also transform the world of sports from that moment forward.

The very next year, the BBC began televising the Oxford/Cambridge boat race. In 1939, NBC televised a Columbia/Princeton basketball game.

Suddenly, advertisers had the ability to reach thousands of people that went far beyond the stadium. As author Joseph Puig stated in his analysis of Olympic marketing, television turned sport into spectacle for mass consumption, and the Olympic Games would never again be solely a sporting event.

But the momentum the Olympics was now enjoying would soon come to a complete and utter stop...

British Prime Minister Neville Chamberlain declares war on Germany.
Source: YouTube

As British Prime Minister Neville Chamberlain declared war on Germany in 1939, the Olympic Games - that international gathering of peaceful nations - were cancelled, and would not resume again until 1948.

The Olympic Games didn't resume until 1948.
Source: YouTube

A record 49 nations competed at the 1948 London games.

The Olympic competitions were televised by the BBC, and these games were the first to set a price for television broadcast rights.

It's reported that the BBC paid the equivalent of $3,000 dollars for those rights, airing over 60 hours of programming, watched by over 500,000 viewers.

Throughout the 1950s, the Olympic games picked up momentum... and advertisers. At the 1952 Helsinki games, 25 companies advertised. At the 1956 Melbourne games, 112 companies sponsored the event.

The Rome Olympics of 1960 saw a young Cassius Clay win a gold medal in boxing, the future King of Greece won a gold in sailing, and it was the last time South Africa would be invited until they abolished apartheid in 1992.

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A young Cassius Clay wins gold and hints at his future greatness.
Source: americanheritage1.com

These were the first summer games to be broadcast live via satellite to 18 European countries, with the tapes being shipped to North America a few hours later.

The cost of TV broadcasting rights was starting to make its climb, as CBS paid the equivalent of almost $400,000 to secure them. It also marked the first time the Games were broadcast in Canada, on CBC TV.

The Rome Games were also the first to offer "sponsorship" by modern-day definitions, as companies were now permitted to use such designations as "Official Supplier," and "Official Sponsor."

Those two words would become very lucrative for the Olympics in years to come.

The 1964 Games in Tokyo featured a number of Olympic firsts.
Source: YouTube

The 1964 games in Toyko were the first to be broadcast internationally, without the need for tapes to be flown overseas as they were in the 1960 Olympics.

At this point in Olympic sponsorship, there was no exclusivity, so competing brands were allowed to advertise at the same event.

But even with more and more advertisers coming onboard, the local Olympic committee still needed more revenue. That led to a decision to actually license a brand of cigarettes, called Olympias.

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Smoke 'em if you got 'em. Remarkably, the Olympics issued "Official cigarettes" at the 1964 Games.
Source: cigarettespedia.com

The cigarettes ended up being one of the most successful Olympic products ever - generating over one million dollars in revenue. And that was big money in 1964.

Four years later at the winter games at Grenoble, the organizers again licensed two brands of cigarettes to use the Olympic logo.

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Faster. Higher. Stronger. Smokier.
Source: cigarettespedia.com

That decision prompted then IOC President, Avery Brundage, to write IOC members to complain about the "rampant commercialism" beginning to encompass the Olympics.

His stand would be a line in the sand that emphasized the inherent tension within the Olympics. The tension that existed between needing revenue to stage the games, and inviting corporate sponsorship that didn't undermine the overall Olympic ideal.

IOC President Brundage used his influence to try and keep commercialism at bay for the next 12 years.

During the 1968 summer games in Mexico City, another marketing controversy revealed itself.

The Adidas and Puma shoe companies were owned by feuding brothers, Adolph and Rudolph Dassler. Their sibling rivalry exploded into a full-fledged war during these games.

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The feuding Dassler brothers started the first sneaker wars.
Source: carolinastylemag.com

The shoe companies furiously tried to outbid each other to induce track athletes to wear their brands.

As author Joseph Turrini details in his book titled The End of Amateurism in American Track and Field, the competing footwear companies offered cold hard cash to athletes to switch brands - usually in the form of thousands of dollars - stuffed into their shoes.

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Joseph Turrini's book details the Puma/Adidas scandal.
Source: booktopia.com

The shoe companies blatantly ignored Olympic amateur regulations and distributed over $100,000 in cash, and over $350,000 in shoes and equipment.

The bribes created a public scandal, yet most athletes were unrepentant. They felt they were providing publicity for the shoe companies, and should be rewarded. The Olympic committee realized it would be impossible to police the situation, so they mandated that only all-white non-branded shoes could be worn in competition.

Athletes immediately protested stating they wanted to wear the shoes they trained in. Black athletes protested at having to wear all-white shoes. The shoe companies simply ignored the mandate, brand wars at the Olympics escalated, and sport apparel sponsorships would expand exponentially into the 1980s.

The 1976 Olympics in Montreal would leave that city with a three-decades long debt.
Source: YouTube

By the time the Queen opened the 1976 Olympics in Montreal, IOC President Avery Brundage had retired. His stand against commercialism now a thing of the past, the Games looked to maximize television broadcast rights and explore lucrative advertising opportunities.

628 advertisers participated in the 1976 Games, and an estimated half billion people watched on TV. Yet, the Games left Montreal with such a big debt, it took three decades to pay it off.

It was a lesson not lost on the 1984 Los Angeles Games, as it would turn the marketing of the Olympics upside down...

The LA Games in 1984 changed Olympic sponsorships forever.
Source: YouTube

It was in the city of marketing dreams that the IOC realized the full potential of marketing a mega-event like the Olympics.

The Los Angeles organizing committee realized that real revenue success didn't lie in attracting ever- larger numbers of advertisers, but that the exact opposite strategy was the key.

So they reduced the number of advertisers from hundreds down to 35, but greatly increased the amount each paid. For that steep price, they offered one more important carrot - exclusivity.

Even though advertisers were paying more than they had ever paid before, category exclusivity and the massive international television audiences the new deal provided, made it a bargain.

The strategy was so successful, the LA games posted a huge profit. That success led the IOC to create a Global sponsorship program known as TOP - which stood for "The Olympic Partners. It gave a small select group of advertisers the rights to use Olympic symbols worldwide in return for lucrative fees.

The first time the TOP program was successfully implemented was at the Calgary Winter Games in 1988. By then, over 80% of Olympic sponsorship support was coming from North American advertisers.

The Games in Atlanta saw the concept of "Official" products go off the rails.
Source: YouTube

At the Atlanta Olympics, 10 companies signed up as TOP sponsors, spending $40 million each for the privilege.

While many of the sponsorships were a good fit with the Olympics, the cost of staging the games soared to $1.8 billion. Using the 1984 Los Angeles corporate model, Atlanta organizers looked to more and more sponsors for more revenue. That led to some "interesting" sponsorships.

For example, Jeopardy became the "Official Olympic Game Show." There was an official Olympic onion sauce and an official toilet seat cover. When the Atlanta organizing committee announced it was granting a license to the "Official Feminine Hygiene Product" - the IOC stepped in and said enough.

The image of the Games was being tainted. Not long after, it was discovered that some IOC members had accepted bribes to vote for Salt Lake City in 2002, and the problem of doping was never far from the headlines.

The Olympics desperately needed to re-brand itself.

One of the ways it did that was to look to advertising. So the IOC hired top creative advertising agency Chiat/Day to create a series of messages to help promote Olympic values.

The resulting commercials featured very moving and memorable images from past Olympics. Robin Williams supplied the voiceover:

The Olympics creates its own advertising campaign to re-establish the tarnished ideals of the Games.
Source: YouTube

The commercial ended with the line, "Celebrate Humanity."

Media companies around the world embraced the message. CNN ran it thirty times a day for eight months leading up to the Games, 30 airlines showed it as part of their in-flight programming, it appeared in cinemas across three continents - all at no charge - generating an estimated $120 million in free advertising.

But changing a perception is a process, not an event. So the IOC restructured their sponsorship strategies, put stricter guidelines in place, overhauled many of their practices, and the advertising campaign did its bit to help resuscitate the Olympic image.

The 2012 London Games cost over $14 billion to stage.
Source: YouTube

In 2004, the BBC estimated that it now cost $10 billion to host the Olympic Games.

By the time the Olympics arrived in London, England, in 2012, that figure had risen to $14.5 billion.

NBC paid $1.2 billion for the broadcast rights to the London Olympics.

But even with those enormous windfalls, the London Olympics needed billions more in sponsorship money.

Adidas paid over $172 million dollars to be one of the lead sponsors. With the help of Montreal advertising agency Sid Lee, Adidas arguably became the most visible sponsor at the Games.

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Adidas is still a major sponsor at the Games, and dominated the London games with their clever marketing.
Source: myukcompetitions.com

Britain's most successful athletes in over 104 years sported Adidas uniforms. TV commercials blitzed screens and posters adorned buses and billboards. Viral videos attracted millions of views on YouTube.

Samsung, the official and exclusive worldwide partner for wireless communications equipment, gave out 2,500 free phones to the athletes, who then used them in the opening and closing ceremonies to take pictures and videos in front of millions of viewers worldwide.

In one of the funniest moments, the London Symphony Orchestra started playing Chariots of Fire. As the familiar, repetitive organ note began...

Mr. Bean steals the limelight at the London Games, with his co-star, a Samsung phone.
Source: YouTube

...we see that it's comedian Rowan Atkinson, ala Mr. Bean, sitting in with the orchestra, playing the note with one finger. In true Mr. Bean fashion, he becomes bored and pulls out his Samsung phone. He checks emails, becomes completely distracted, and starts taking selfies. It was a virtuoso performance... starring Samsung.

BMW supplied the cars, Coke the sodas, McDonald's was the only restaurant allowed to sell French Fries on the grounds, all ATM machines were changed to VISA, and Omega provided all official timing.

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BMW was an exclusive sponsor at the London Games, so no other automotive brand could be associated with the Games.
Source: blogspot.com

And even though the worldwide sponsorship partners paid over $100 million each to participate, with the next tiers paying $40 million each, all this sponsorship revenue still only covered 40% of the cost of staging the Olympic Games.

While it is one of the great honours to host the world for an Olympics, it comes with a great price tag.

And Faster, Higher, Stronger has no option but to become Pricier, Steeper, Costlier...

The Olympic Games were founded on the principle of uniting the world peacefully through sport.

And one underlying, and perhaps ironic, aspect of that principle is tension.

The tension as nations compete against nations. As athlete competes against athlete.

And the tension as the need for sponsorship money competes against the Olympic ideal.

The cost of mounting an Olympic event is staggering. The 1928 Games cost $25,000. The 2012 London Games cost $14.5 billion.

Every host country feels the pressure to put on a world-stopping show, and to pull it off they need massive revenue intake.

And that is why advertisers will have a larger and greater presence in the Olympics as time marches on.

Governments can no longer foot the bill. Ticket sales provide only a small portion of the revenue, and even though Comcast just bid $4.4 billion for the broadcast rights to the next four Olympics, it's still not enough to pay the bill.

I predict we'll see sponsorship money tip over the 50% mark by 2018. There's no other way to pay for the Olympics, unless we all agree to scale down our expectations.

But that won't happen. The Olympics demand spectacle. Spectacle demands sponsors. And sponsors demand international audiences.

And one thing is for certain - the cost of the Sochi Olympics will set a new world record...

...when you're under the influence.


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