The Olympics are coming to London - we all know that. Whether we think that our capital can cope (in particular the underground, but that's a whole different topic of conversation) with the world's biggest sporting event, the fact is that it is coming. Along with the Olympics comes the huge possibilities for brands to associate themselves with the Games to benefit their businesses.
The business of the Olympics is known as the 2012 Economy and one agency that is seeking to advise brands on how best to capitalise on the opportunities this ever growing economy offers is Vero where John Zerafa is a Director. I spoke to him on Thursday and here is the interview:
The 2012 Economy
John, could you tell me exactly what you mean by the 2012 Economy?
LOCOG which is the organising committee for the 2012 Olympic games will be trying to raise £750 million in sponsorship money in order to fund the games. This £750 million will be the result of 6 or 7 major deals, each of between £50 and £100 million.
We expect the first and second of these deals to be announced at the beginning of 2007 and the rest over the course of next year and beyond.
The 2012 Economy revolves around the acquisition of these sponsorship rights and the benefits they bring.
So what role does Vero have in the 2012 Economy?
Vero has the opportunity to work with potential sponsors to help them understand the narrative of the 2012 Games and Seb Coe's vision that was behind our victory in Singapore. The vision was all about re-engaging the youth of the world and the future of the world lying with the youth.
We will provide help and guidance to brands seeking to engage in sponsorship to ensure that the story they want to tell the world matches up with the story of the games. This 'story' is known as a brand narrative and it is whatever lies at the very core of a brand.
For any brand to get the most out of an association with 2012 they have to have a synergy with the goals and vision of the games, which were deeply entrenched in youth, sustainability and respect. We aim to find the core of brands and ensure that if they want to be associated with the games, their core propositions will be able to stand up and be counted.
OK, so what about the organisations that can't afford the £50 million price tag to be official sponsors?
They have a number of options. For example, Siemens sponsors the GB rowing team. They have looked internally at their brand narrative and objectives and have tried to work out how they can be skewed more to tie in with world-class sport.
Why would they do that?
Well if LOCOG (Games organising committee) is faced with a choice between two businesses who are bidding for the same contract, if everything else is equal they will choose the business whose narrative and objectives most closely fit with those of LOCOG and the games.
Isn't it a bit early to be worrying about the Games? They are still 6 years away...
Over the next 5 and a half years, we will see a significant increase in the sponsorship of sport in the UK. Companies will begin to skew more and more of their marketing spend towards sport. The next 5 and a half years are going to be without doubt a major period of growth for sports related marketing and advertising. We know when the Olympics are going to happen, there is no way that it won't be anything other than a significant period of growth.
London is one of the most creative centres in the world in terms of marketing, advertising and pr and while the official sponsors are protected I think we will see an increase in the number of brands being creative in gaining an association with the Olympics.
For example at Sydney 2000, Ansett Airlines were an official sponsor of the Games, while Qantas was not. However because of a cunning deal Qantas struck with one of the TV networks the vast majority of the public thought that Qantas were the official sponsor of the Games. (Check out an article all about this here).
We will definitely see a lot of companies sponsoring specific teams at the Olympics and trying to muddy the waters in the minds of the public about who are official sponsors and who aren't. The most important factor in the whole thing is activation, i.e. how do brands activate their sponsorship to get the most from their association?
With all the opportunities to be associated with the Games without paying, is it worth spending all that money to be an official big-time sponsor of the Games?
Again it goes back to activation - if as one of the companies that pays £50 million for sponsorship and you activate it properly, you are in a far stronger position than a company trying to get an association by other means. As an official sponsor you basically have carte blanche to do what you want with Olympic imagery, the rings, the 2012 logo, you have links with venues, all sorts of things not available to non-sponsors.
However there will definitely be companies who come up with very creative ways to bend the rules.
