A dozen multinationals such as Coca-Cola, Lenovo, McDonald’s, and Samsung have laid out as much as $100 million each to be global sponsors of the Beijing Olympics this summer. An additional 11 — including Volkswagen, Adidas, and Air China — have paid as much as $50 million each for the right to link ads within China to the Games.

Dozens of other companies have less extensive tie-ups, ranging from the ‘official wine supplier’ (Great Wall) to Guangzhou Liby Enterprise Group, which is an official provider of detergent for sheets, shorts, and other laundry.

The problem for sponsors is that plenty of other companies think the Olympics are just as attractive — and are finding unofficial ways to link their brands to the Games.

Nike has endorsement deals with Athens gold medal hurdler Liu Xiang and other Chinese athletes. Part of its campaign is in our illustration.
Sneaker-maker Li Ning (named after its founder, an Olympic gold medalist in gymnastics) runs TV spots featuring gymnasts and basketball players and is sponsoring the U.S. Olympic Ping-Pong team.
PepsiCo got 160 million online votes from mainlanders in a contest ranking mug shots sent in by fans; the winning entries will be printed on cans cheering on Team China. And Pepsi has replaced its traditional blue cans in the mainland with red ones ‘to show our respect to the year of China,’ says Harry Hui, Pepsi’s marketing chief in China.

It works.

Qantas did it to Ansett Airlines in the 2000 Olympics. Ansett died, Qantas went from strength to strength.

Most ambush marketers do what Qantas did and simply deploy images of athletes. Thousands of Chinese polled by research firm Ipsos say they believe Pepsi, Nokia, and Li Ning are linked to the games, though they aren’t. That’s important because roughly three-quarters of Chinese consumers say they would give preference to products they associate with the Olympics, Beijing consultancy R3 reports.

It doesn’t help that the Beijing organizing committee offers five levels of sponsorship, and a total of 49 companies have signed up.
Source: BusinessWeek

Billions of dollars that will be spent on Olympics-related advertising — directly by sponsors, and indirectly by marketers seeking to bask in the reflected glow — and this could smooth the bumpy ride the American advertising industry is now enduring.

There are fears that the economic problems in the American economy may lead marketers to cut budgets for next year. Swooping in to save the situation come the Olympic campaigns.

Universal McCann media agency has made a prediction that sees a 5.5% increase in worldwide advertising spending next year compared with 2007.

The recent Global Entertainment and Media Outlook report from PricewaterhouseCoopers is forecasting that ad spending in China in six major media will increase to $22.5 billion in 2011, from $13 billion this year.

The Olympic torch relay, scheduled to begin in March, is planned as the longest ever. The sponsors are a Chinese company, Lenovo, along with Coca-Cola and Samsung.

Lenovo has cunningly worked the symbol into a complete range of products inspired by the games. The first of these products is the notebook Xiang, shown here, that has the same graphic patterns found on the Olympic Torch.

The competition among agencies for work for Chinese advertisers is almost a separate Olympic Games.

JWT, part of the WPP Group, has announced it has landed five assignments to create campaigns in China to appear during the Olympics.

Three are sponsors, Lenovo, China Unicom and the Yili Group, which is China’s biggest dairy.

The remaining two assignments are from Chinese companies that are not official Olympic sponsors but will run campaigns in the country during the Games One is Anta Sports Products, which sells athletic footwear and apparel. The other is from Lilang, a maker of men’s wear.
Source: New York Times

Coca-Cola is helping China select torchbearers and escort runners for the Beijing Olympics.

In August, Coca-Cola launched two bottling plants in China’s eastern Jiangxi Province and the northwestern Xinjiang province, which made the total number of Coca-Cola’s factories in China reach 37.

Coca-Cola entered China in 1928. In the same year, Coca-Cola became the Chinese Olympic delegation’s sponsor.

Now, the world’s largest beverage company, which recently launched an $80 million global research center and new China headquarters in Shanghai, is planning to boost investment in sales infrastructure and product range in the country, a market that could become Coca-Cola’s largest, the company says.

Doug Jackson, who became president of Coca-Cola China in April, said, ‘Our goal in the next few years is to sustain the current strong growth momentum. The non-alcohol drink market grows by 14 to 15% a year in China, and we hope we can outdo the average market performance to increase our sales volume and market share. We are also planning to expand our product range and provide more choices for our customers.

‘We believe that China could become the largest market for Coca-Cola, however, it is hard to predict when it will happen, but it certainly will. Our long-term vision is to make China our largest market.’

And one way of making the vision happen is spending a considerable amount of its marketing budget on the Olympics.
Source: China Daily

When Coca-Cola executives met with the Beijing Olympic Committee in 2002 for a status report on the first anniversary of the city’s winning bid, China was Coke’s sixth largest market. Today, a year away from opening ceremonies for the 2008 Summer Olympic Games, China has moved to No. 4 — and is still growing.

(It is no part of this editorial to discuss the health effects of Coke consumption and whether such a product should be associated with an important sporting event of world stature.)

Per capita consumption in China has grown as follows.

2002: 10; 2003: 12; 2004: 15; 2005: 18; 2006: 20

Coke’s sponsorship of the Games is a key component of the company’s global sports marketing program. Coke wishes to push its 200 brands deeper into consumers’ consciousness.

Paul Etchells, deputy group president for Coca-Cola Pacific, said, ‘This will be the biggest Olympics ever as well, I think, in terms of almost any measure. The number of athletes, the number of spectators, the number of media people who are forecast to come to China during the games.

We talk about the legacies in relation to the Olympics. In other words, what is it about our Olympics activation that’s going to survive the Olympics and is going to make a difference beyond August 2008. And the principal legacy has got to be the consumer view of our brands.

‘There are a very large number of outlets and it’s a three-week window during which these outlets are open and you have to ensure that you are up and running by the opening of the Olympics and that the execution during the Olympics is flawless. You realize there is a very large behind-the-scenes element in terms of the logistics . . . You visage immediately selling products to consumers, to spectators, but you have to provide products to the whole Olympic family — all the athletes, all the team managers, etc. So, a very large number of people, quite a complex logistics exercise.’

The mind boggles.
Source: AJC

There is no expense being spared for the 2008 Olympic Games. The Games will be an important point in China’s history, a living example to the world of China’s impressive economic success and growing prosperity.

As a result the Chinese Olympics promises to be the most expensive sports event in human history.

The summer 2004 Olympics in Athens cost RMB32 billion. It pushed the country’s budget into a deficit. A lot of money. The 2008 Olympic Games in Beijing can break this record.
In official estimates, in the 2002-2007 period investment in the Olympic preparations should reach about RMB138 billion, $18 billion. But that is a budgeted figure and it is well known that budgets — especially government budgets — get broken.

But the money as it is spent brings benefits to China. The construction of housing and transport facilities; the development of domestic high-tech companies working in electronic instrument-making and machine-building. Beijing’s economy has been streamlined and the environment has been improved although there is much work still to be done in this area.

In official figures, the Beijing economy can attribute a 2.07% addition to the annual growth rates solely to the projects created by the Olympic Games. The programs already implemented are bringing more than $1 billion a year to the municipal budget.

Most of the spending has been government spending but companies have also been adding to the investment. Some companies are sponsoring the Olympics, for example General Electric and Eastman Kodak. Others have invested in sports hoping for future dividends.

After the games Olympic facilities will be used for trade and entertainment as well as for sport. This is what has happened in Australia where the Olympic centre is used for a wide range of activities including the annual agricultural show.

The Beijing Organizing Committee is not worried about the quite massive investment and its ability to recoup it. A high-ranking Chinese official said: ‘The main goal of the Olympic investment is to create an infrastructure that will serve the people of Beijing after 2008 as well. We will make the Olympic budget profitable. We are doing all we can for our Games to be one of the best, and they will bring us money.’

Add up all the benefits, throw in the rights to television broadcasting of competitions, add sponsor incomes and money from ticket sales (worth almost $1 billion.) Beijing will come out of these games with a much improved city. And, very possibly, a profit.
Source: Rian Novosti