Chinese firms shy away from London Games
Updated: 2012-05-04 11:05
By Li Gang (China Daily)
Few events are comparable to the Olympics in terms of spectacle, sporting grandeur and universal appeal. It is, then, not at all surprising to see companies try very hard to put their names next to the colorful five-ring logo. Significantly, from Los Angeles 1984, the first ever profitable Games, the playground has not only been an arena for star athletes to compete and celebrate, but also a battlefield for companies to vie for attention and goodwill.
As a reflection of the economic center of gravity shifting from the developed world to emerging economies, companies from the Asian Dragons and the BRICS are now joining the global sponsorship of the Games, with Acer and Samsung as notable examples. Over the years, firms from the Chinese mainland, as well, have shown considerable interest in partnering with the Games. In 2004, PC-maker Lenovo became the first ever participant from China in the Olympic Partner Program (TOP). Three-fourths of all official sponsors of the 2008 Beijing Olympic Games, including TOPs and other tiers of sponsors, were local firms.
Yet it is interesting to observe that, in contrast to the passion to participate in the 2008 Beijing Games, Chinese companies are ultra cautious about the London Games this year. With only about three months left for the Summer Olympics' opening ceremony, there is only one Chinese mainland firm among the 11 TOPs and 42 other partners. The firm, Crystal CG, is a third-tier partner and will provide digital images and other visual services.
This cool attitude of Chinese firms is perhaps unsurprising. The global economy is not where it was four years ago. Not only are the United Kingdom and some of its European neighbors in trouble, but also the once sizzling-hot Chinese economy is now showing signs of slowing down. The gloomy global economic prospects weigh on the financials of Chinese firms, and many of them have turned to the domestic market for growth. Expanding overseas by sponsoring the Olympic Games or other grand global events is therefore not on their priority list.
Some logistical difficulties may also have held back Chinese firms from the 2012 Games. Beijing is seven hours ahead of London in summer time, which means when London hosts the opening or some finals and semi-finals during the evening, most people in China would be asleep. Chinese audience may miss a large part of the live broadcasts in London, which may lead to a discount in TV commercials targeting Chinese customers. Moreover, sending Chinese staff or volunteers to London has proved to be time consuming and troublesome.
In April, a group of Chinese volunteers selected by the London Organizing Committee of the Olympic and Paralympic Games (LOCOG) were denied entry to the UK because they could not obtain permission to work from the European Union. For Chinese firms without a permanent subsidiary in London, staffing and equipping an advertising campaign for the Olympic Games would have cost dearly.
Another factor to consider is the ever-increasing cost of sponsorships initiated by the IOC and its affiliates. The cost of a four year TOP member grew more than three-fold during the past two decades, peaking at $87 million (66 million euros) for the term of the Vancouver/London Games.
Lastly, Chinese firms learnt some hard lessons from some of their failed attempts in grand sports events. Now they do their math before rushing into such expensive campaigns. For instance, a manager from Aokang, a leading Chinese shoe maker and third-tier partner/supplier of the 2008 Summer Olympics, reportedly said the firm's 300 million yuan (35 million euros) marketing campaign during the Games was "roughly the revenue of selling 750,000 pairs of shoes". However, that "750,000 pairs of shoes" seem to do a somewhat poor job in helping Aokang expand overseas. With export orders contracting lately, the value of spending heavily in sponsoring an international sports event is more uncertain than it was four years ago.
Therefore, Chinese firms' attitude toward the 2012 London Games is understandable and may not necessarily be a bad sign. Rather, it shows they are maturing and learning fast from past misadventures, and showing tact in dealing with situations. Also, this attitude should not be misinterpreted as Chinese firms losing interest in expanding overseas or giving up their attempts at advertising campaigns in large international sports events. For those who will again attempt to promote their brands overseas when the time is right, a moment of reflection on the classic list of "dos" and don'ts" in sports advertising campaigns can be helpful.
Connect to the Games. To intuitively relate a company's product to the sports field has proved to be the most effective way to leave a memorable image in customers' heads. Sportswear manufactures are naturally advantaged. The Puma shoes on Usain Bolt's feet and the Speedo Fastskin suits for Michal Phelps were repeatedly shown in all kinds of media all over the world during the 2008 Beijing Olympic Games. Other firms, though, can also hint such a connection, being it an explosive sprint as a metaphor for engine power, or a hot and sweaty training paired with soda drinks to quench thirst.
Align your brand image or corporate culture to the spirit of the Olympics. Fairness, sportsmanship, cultural diversity, and respect for tradition, Olympism relates to a rich philosophy of life and humanity. A firm can position itself as part of these values and benefit from Olympism. Take Procter & Gamble's latest P&G Thank You Mom campaign as an example. By thanking athletes' moms for all they do, the campaign recognizes and celebrates its core customers and, more importantly, aligns itself to the humanity and the spirit of giving back embedded in Olympism. As put by P&G's global chief marketing officer, Marc S. Pritchard, in a press statement: "P&G is in the business of helping moms. So we're using our voice at the Olympic Games to thank moms everywhere."
Find the right channel to deliver. The advertising industry is in a churn. While alternative channels such as social networking sites are booming, traditional paper media and TV commercials face a decreasing audience. With this in mind, Lenovo smartly combined its products, social media, and sports events in its 2008 "Voices of the Olympic Games" campaign. This campaign provided support for 100 athletes from 25 countries upon one condition: that they have to blog about their daily life during the Games. This campaign proved to be a social media masterstroke. It engaged a huge audience, notching up 10 million hits for Lenovo across Twitter, Flickr, YouTube and other social media accounts.
Joining the multi-tiers of sponsorships by no means guarantees a successful advertising campaign. Knowing your audience and predicting their interests are the keys to tag your logo at the right place.
The author is research fellow at the Samsung Economic Research Institute (China). The views do not necessarily reflect those of China Daily.