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Assessing the brand fallout from Olympics delay

Adage India 2020-03-24 23:28:45

Advertisers, already dealing with the loss of March Madness and the pause of National Basketball League games, must now scramble to fill an Olympic-sized hole in their marketing plans with the suspension of the 2020 summer games in Tokyo to 2021 in response to the coronavirus pandemic.

Olympics-themed marketing is often plotted months–if not years—in advance of the games, especially for the 14 global sponsors such as Coca-Cola, Visa, Procter & Gamble, Samsung, General Electric, Toyota and Intel that shell out big money in deals with the International Olympic Committee for the rights to use Olympic trademarks. In most cases, brands line up endorsements with Olympic athletes, whose relevance will drop if they are not competing.

“This is a big deal for advertising because it represents over $1.2 billion in advertising,” Fred Chasse, senior VP at Analytic Partners, whose specialties include marketing optimization, said in a statement. “It’s going to be impossible for advertisers to take that Olympics money and spend it, last minute, to have anywhere near the kind of reach, brand and sales impact that the Olympics buy would deliver for them—especially in an election year.”

The postponement comes 114 days before the games were set to begin. Most brands begin their marketing 90 days out, says Jim Andrews, a Chicago-based sponsorship consultant, meaning plenty of campaigns are likely already produced. While some of the footage could still be used—either now or for Olympic campaigns that run in 2021— there’s a good chance that most of it will never see the light of day, considering the need to make ads fit the moment.  

“You want it to be fresh. There might be some things you could reuse that are evergreen,” Andrews says. But “most likely if you are these sponsors, you are going to start over,” he adds, noting that “there is no doubt” money has been spent that “they will not be able to recoup.”

However, Matt Powell, VP and senior industry advisor of sports at market research firm NPD Group, says he doesn’t expect the event’s postponement to result in a “major negative impact” for brands because the “marketing is cumulative not visceral.” Brands will see a dent though, if they were using the Olympics to showcase a new technology or product, for example, as Speedo did with its LZR swimsuit in 2008. Such products will still be launched on their planned timetable, but won’t have as much awareness as they would have with an accompanying Olympics ad, Powell says. 

Working with the International Olympic Committee, toymaker Mattel had planned to unveil a line of new Barbie dolls and Hot Wheels this year to mark the new categories in the Tokyo games: baseball and softball, sport climbing, karate, skateboarding and surfing. A spokeswoman for Mattel did not immediately return a request for comment regarding the timing of the new collections. Tech brand Intel, which had a drone light show in 2018, had also been planning to feature several new technologies at the 2020 Games including facial recognition security. A spokeswoman says Intel will “take advantage of the additional time to innovate when the Games resume.” The company plans to still have new technology at the 2021 event.

The company that might be forced into the most changes is Japanese automaker Toyota, which spent a reported $835 million in 2015 to sign on as a top sponsor of the games through 2024 and has since poured millions of dollars into developing a fleet of electrified, new-mobility vehicles to roll out for the event, as Automotive News recently documented. The automaker began publicizing its Olympics ambitions in 2017 with a campaign called "Start Your Impossible" from  Saatchi & Saatchi in the U.S. and Dentsu in Tokyo. A U.S. Toyota representative did not immediately respond to a request for comment.

In the past, food marketers have used Olympic campaigns to launch new packaging such as Kellogg cereal boxes, and even new products, such as Hershey's Gold, a candy bar launched 100 days before the 2018 Winter Games that was featured in a campaign starring eight-time Olympic medalist Apolo Ohno. Neither Kellogg nor Hershey returned requests for comment on this year’s plans. 

Coca-Cola way back in September announced its “6-Pack” of Olympic athletes that it planned to feature prominently in its marketing, including soccer star Alex Morgan, gymnast Laurie Hernandez and swimmer Simone Manuel. Still, the brand lucked out in that it had yet not shot its Olympic TV ads for a planned U.S. campaign from Wieden & Kennedy, a spokeswoman confirmed. Of course, that campaign was expected to account for a substantial part of the brand’s summer marketing plans, so now Coke must come up with a Plan B.

Andrews suggests there still might be ways for brands to leverage the Olympics this year, including their endorsers, such as creating digital marketing around stories about how athletes are dealing with the delay. “It might make for some nice viral content to show you are still supporting these athletes,” he says.

Chasse offered another silver lining of the delay: “For some brands that are hit hard by the pandemic and upcoming economic downturn, this could be a blessing if consumers aren’t in the market for their products,” he stated. “For example car companies including Toyota, Chevrolet, BMW, Ford and Honda were all big advertisers during the 2016 Rio games, and are sensitive to recessions. Those companies will take a good portion of those dollars and take to the bottom line or put towards more appropriate marketing for the economic conditions (such as promotions).”

Contributing: Jessica Wohl