Winning from London 2012 sponsorship

Host City finds out what LOCOG and two of its major sponsors, BP and Visa, really think about sponsoring the Games in the current climate

The prospect of buying into one of the most recognised brands in the world has a wide appeal. Consultant Michael Payne, who was marketing director at the International Olympic Committee for more than 20 years, says: “For new sponsors coming in, the value of the Olympics and the value of the UK market is huge.”

Michael Payne was marketing director at the
IOC during a period of massive growth

With such a colossal event, it can be hard to identify precisely where the added value lies in the relationship. Does British Petroleum expect to sell more fuel through its status of “Official Partner” to London 2012 – or are the benefits more complex than this?

For Mike Sharrock, BP’s London 2012 partnership director, it is not just a simple buy-sell relationship. “We might [sell more petrol] but that’s not why we’re doing this. For us it’s a much bigger story than that. First and foremost it’s about BP thinking about ourselves as Britain’s biggest company – we’ve been here 100 yrs – it seemed absolutely the right thing to do to be supporting what is going to be an amazing event in 2012.”

The brand that touches hearts
The Olympics allows companies to touch millions of people, Sharrock says. “Of course it’s about consumers, but it’s much wider than that, it’s about how much we can use that association to really connect with millions of people over the next three years. We really want to create some really exciting opportunities to engage with our consumers.”

Visa worked with the Olympics for many years, since taking the contract over from American Express. As Michael Payne puts it: “In the early 1980s, Visa had American Express’s lunch and has never looked back.” The company sees the Olympics as a chance to connect with millions of customers.

Colin Grannell, Visa’s executive vice president of partnership marketing, says: “This is the one that gets to embed in people’s values. We have a chance to communicate to all of our customers in all of our markets and every retailer. We are expecting to surprise and delight our customers and to give them an experience of what the Olympic Games is all about.”

As a payment system provider, Visa is directly involved in the operations of the event. “We play a big part in making the games smooth in operation and convenient in terms of payment. The whole world wants to come to London and we’re going to help bring them there.”

For companies whose services are not directly connected to event operations, a successful sponsorship is often one that draws a parallel between the event and the company’s area of business. Sharrock says: “We feel there’s a really close association between Olympics and Paralympic values and what we are trying to do with BP. They represent this idea of mobilising millions of people in a really positive way. We see the opportunity to demonstrate BP as a company that can make a difference and that is operating at the frontier and that delivers.”

Fostering a close relationship
Not all sponsors make the most of this massive opportunity. Payne says: “If you can invest the time up front it is one of the most powerful marketing tools you can have. The problem is at least a third of the partners don’t invest the time to properly understand it, and then wonder about their investment.”

Establishing a constructive bond between the organiser and the sponsor is crucial. Chris Townsend, commercial director at LOCOG says: “We don’t position our relationship as a sponsorship – a ‘lunch, launch and logo’. We work with our partners before and after signing an agreement to develop a business plan as to how this relationship can deliver their marketing objectives over three or four years.”

These sentiments are echoed by Sharrock. “We don’t see this as a sponsorship. It’s a business partnership, which means that you have both sides working together to understand what we want to do and what they want to do.”

Communication is the key throughout. Townsend says: “We review our relationship on a monthly basis. The team meets our clients on a daily if not weekly basis.”

Working so closely inevitably puts strain on the relationship. Sharrock says: “Of course there are tensions – on the one hand you have teams within LOCOG who are responsible for delivering certain aspects of the programme. Then you also have a commercial team within LOCOG to get revenue for the Games – but that’s a positive tension.”

So far all is good, says Townsend. “At the moment we are ahead of the game. The sponsors are ahead of track in many cases. There’s no doubt we’re going to have big issues coming down the line, but up until now they’ve been relatively minor – nothing like the problems that came from Beijing.”

How big a deal is it?
There is little doubt that hosting the Olympics is the biggest thing to happen to London in a very long time. Grannell says: “I don’t think people who live here have really begun to understand what’s going to happen. It will be even bigger than the 1966 World Cup. I guarantee that the surge in national pride will be something we haven’t really experienced before. The expectation to do it right will be enormous.” Payne dispels fears that London has already been upstaged by Beijing. “The beauty of the Olympics is the way the brand is so defined in each host country. There was some concern of ‘I’d hate to follow China’. I admire the way London’s performing and the expectation on building on some of the areas where China didn’t perform – notably in the area of street celebration and turning this into one big party.”

Another worry is where to find the cash in such challenging economic times. Payne says: “I would hate to be in the market now. London did very well to get out there with the sponsorship programme when they did, ahead of the curve and be able to lock down some of the deals.”

Sharrock is very hopeful. “The view that we have is that the timing could be perfect in terms of the world coming out of its current downturn. 2012 is an opportunity for real celebration. For BP, this is the biggest event we’ve been involved in.”

Grannell is also optimistic that London 2012 will take the Olympics and Visa to new heights. “This one will be the biggest and best by a distance. The interest and excitement globally in marketing – we are already there. We are having to accelerate our plans to accommodate that.”

The question remains: is biggest always best for all sponsors? Michael Payne says: “There is no bigger event than the Olympics. Is it the best from a sponsorship standpoint – yes, depending on what you want to achieve. Something like the Formula 1 has very different properties and will achieve very different things. A lot of new sponsors coming in don’t appreciate the flexibility of the Olympics to touch so many different people until they are well down the road. It’s unlike any other sponsorship.”

This article is based on a panel discussion at the ATR Newsmaker Breakfast chaired by Ed Hula and attended by Host City