The Olympic Games provide golden opportunities not just for sports men and women but also for companies aiming to secure a mass audience by sponsoring such events. The Games give companies the opportunity to promote their brands to a potential worldwide audience as well as to benefit in image terms from being associated with that event and with the real heroes. For sports events organisers, whose aim is to maximise the generation of income, corporate sponsorship is one of the most lucrative sources of revenue together with broadcasting rights, merchandising and, to a much lesser extent, ticket sales.
"Sponsoring is a tradition that goes back to Ancient Greece, where wealthy Athenians would contribute financially to expenses related to culture, defence, the state and sports, in order to make them more accessible to all citizens. In return, the state honoured them by engraving their names on marble tablets. This tribute was a mark of respect, value and high appreciation by the city".
In modern times, corporate sponsorship is a commercial arrangement under which a sponsor pays a sponsorship fee and in return receives certain exclusive rights. In most cases, in addition to the payment of the fee, the sponsor also supplies the sponsored party with their products or services. In return, corporate sponsors of a particular event expect to have exclusivity in the use of the official marks, logos and other designations, be given unique advertising and promotional opportunities, on site concessions/franchise and product sales together with the right to describe themselves as the official sponsors of such event in their marketing and promotional campaigns. However, without exclusivity the value of sponsorship is diminished.
Companies such as Coca Cola, Samsung, McDonalds, Panasonic, Kodak, Xerox, Swatch and Visa have paid significant amounts of money for their exclusive deals as sponsors of the ATHENS 2004 Games.
Ambush marketing practices
Ambush marketing, sometimes referred to as “parasitic” marketing, is a phrase that describes the actions of companies which seek to associate themselves with a sponsored event without paying the sponsorship fees. Their aim is to give the impression to consumers that they are actually sponsors or that they are somehow connected to the event. While ambush marketing does not occur solely in the sports marketing arena it is here that it is most prevalent, partly due to the potential worldwide audience and the phenomenal number of followers that these global sports events attract.
Ambush marketing is not a recent phenomenon, it has been going on for a long time. In the early days it consisted of merely giving away promotional items in each of the ambushers’ products or free trips to the event. However, the tactics used nowadays by ambush marketers to suggest sponsorship involvement have become more “sophisticated” and cover a wide range of scenarios such as: the placement of billboards displaying the ambush marketer’s name, mark or logo at strategic locations near the site of the event; the use of pictures or photographs of buildings, locations etc that are associated with the hosting city as the background of the ambusher’s marketing campaign; the sponsorship of individual participants of the competition and the purchase of TV and radio slots during the coverage of the event to promote their products. By means of illustration the following are examples of “successful” ambush practices in recent years:
- In the 1984 Los Angeles Olympic Games where Converse was an official sponsor, Nike built huge murals near the Los Angeles Coliseum displaying the Nike logo and several athletes wearing Nike sporting clothes.
- Reebok was one of the official sponsors of the Barcelona Olympic Games in 1992. When the US basketball Dream Team went up to the podium to receive their gold medal, two of its most famous players, Michael Jordan and Charles Barkley, who had lucrative sponsor contracts with Nike, covered the Reebok logo of their tracksuits with the US flag.
- In the Atlanta 1996 Olympic Games, Reebok was also an official sponsor. They were not pleased when at a press conference the British 100 metres runner Linford Christie appeared wearing blue contact lenses with the highly recognisable Puma logo in white in the centre of each lens. The Puma logo lens received world wide coverage and was front page of most international newspapers.
- In the same games Nike handed out to the crowds paper flags bearing Nike’s logo. The TV cameras captured the crowds waving the Nike flags to the despair of the official sponsors.
Legal aspects of ambush marketing
While the unauthorised use of a registered trade mark, logo, slogan, the copying of any artistic work protected by copyright or misleading the public by calling themselves official sponsors would constitute straight infringing actions under the intellectual property laws or trade practices of most countries, the legal position of ambush marketing practices is certainly unclear.
Ambush marketing campaigns do not in most cases use third parties’ trade marks or designs. Ambush marketers refer to the event and to their own names and products in an ingenious and creative manner, so in most cases they manage to circumvent the law. This is not assisted by the fact that most countries lack adequate legal provisions to combat ambush marketing.
The laws currently available in most countries to official sponsors and event organisers to stop ambush marketing are not adequate. Most jurisdictions still rely on the traditional laws of trade marks, copyright, unfair competition, trade practices and advertising to stop ambush marketers from appropriating some of the exclusivity reserved to official sponsors. These traditional forms of protection are in most cases ineffective against the creativity of ambush marketers who also know the wording of the law and are careful not to trespass it.
As the organiser of the major sport event in the world, the International Olympic Committee (IOC) together with the national Olympic Committees and the Olympic committee of the hosting state have in recent years worked very closely together to protect the position of the official sponsors by adopting specific measures to combat ambush marketing. The 1996 Atlanta Games introduced for the first time a “name and shame” campaign in an attempt to denounce ambush marketing practices. Although this measure managed to create a certain awareness of ambush marketing practices among the public, it failed to stop competitors from ambushing official sponsors. For the next Games the Australian authorities took the ambush marketing issue very seriously and developed and adopted a series of particular measures to directly combat ambush marketing in the 2000 Sydney Olympics.
Following the Australian example the IOC together with the Greek authorities have implemented additional legislative measures to combat ambush marketing in preparation for the ATHENS 2004 Games.
Despite the above examples, it seems that countries are only adopting specific measures to combat ambush marketing on an ad hoc basis, i.e. whenever a country hosts a global event and the event organisers require the hosting country to adopt specific measures to guarantee the integrity of the event and the exclusivity of official sponsors.
Ethical aspects of ambush marketing
Any discussion about ambush marketing raises the question of whether these practices by ingenious advertisers are unethical or just imaginative marketing. The answer however, seems to depend on whether the response comes from a corporate sponsor, an event organiser, or a marketer.
Corporate sponsors and event organisers obviously regard the piggybacking of non-sponsoring companies as unethical and claim that it threatens the integrity and future of these events. In particular, corporate sponsors claim that ambush marketing tactics reduce the effectiveness of their promotional efforts and event organisers are concerned that these practices will diminish their ability to retain top paying sponsors, thus jeopardising their ability to fund these events at all.
On the other hand, ambush marketers argue that it is all fair game and that we live in an open market claiming that it is up to the official sponsors to promote their sponsorships and brands and the image they want to project to the public.
In any case, critics of the current trend of multimillion-dollar sponsorship deals in the sporting world argue that the increasing dependency of athletes and event organisers on corporate sponsorship diverts both athletes and the public from the spirit of sport. In very similar ways both official sponsors and ambush marketers use these events to intrude upon the public consciousness to promote their brands and their goods and services. The only difference is that only one of them has paid for the right to do it and is officially authorised to do so.
Accordingly, it is not possible to draw a clear conclusion as to whether ambush marketing is an ethical marketing tactic or not. In particular when it remains to be seen whether ambush marketing is in fact having as much of a negative impact on sponsors’ investment as its critics would have us to believe. However, what is clear is that ambush marketing has become, and will continue to be, an irritating fact of life for sports organisers. What is also clear is that the traditional intellectual property laws and trade practices are ineffective against these practices. Therefore, if ambush marketing is to be stopped or at least diminished, additional and specific measures need to be adopted.
Also published in the April 2004 issue of the British Spanish Law Association newsletter.
Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.