by Alastair Macdonald | 6:30 AM August 6, 2012
If a senior executive recommended to his Board that it invest $50m acquiring another company, and when asked what the company's numbers look like he said: "I don't know, there aren't really any figures, it just feels right to me," you might suspect that the senior executive would be invited to spend more time in his garden.
But if the same senior executive approached the Board and recommended it spend $50m on sponsoring the Olympics, and when asked if sponsoring the Olympics actually works he said: "I don't know, there's very little evidence to go on, it just feels right to me," how would the Boards react? In dozens of real-life cases, by approving the investment and asking how much more is needed to promote the association.
A gross simplification, of course. The Olympics sponsors' roster is a Who's Who of the world's leading brands and organisations, and they clearly did not get where they are by making rash, emotional decisions on multi-million dollar investments.
But, at the same time, it's a fundamental truth that there is little evidence that could show potential new sponsors the impact of previous sponsorships.
And, while LOCOG (the London Organising Committee of the Olympic Games) had great success in achieving its target of £700m in sponsorship revenues, it's also true that many brands didn't pay the asking price — even those that were keen to be persuaded — because they couldn't make a robust enough business case.
Havas Sports & Entertainment (HS&E) provided advice to a number of brands considering sponsorship of the 2012 Games. Some signed up, others didn't. As strategic sponsorship consultants, though, we were conscious that while we provided analysis and evidence, we weren't working with as much hard statistical fact as we would have liked for the scale of the decision. So, we decided to do something about it.
It was too late to source information relevant to 2012 decision-making, so we're using these Games as our test bed to determine the effect that sponsoring the Olympic Games has on sponsors' brands.
The Study
We're focusing on a dozen different sponsors in detail — covering a range of sponsorship levels and market categories — to understand the impact of their sponsorships on consumer attitudes and behaviour towards their brand:
- Does the sponsorship actually affect how people feel towards the brand?
- Does it make people more likely to purchase the sponsor's product?
Comparing results between different audience segments is key to revealing the impact of the sponsorship, if any. So, the study is designed to identify and isolate different audience groups such as:
- Those aware of the Olympics sponsorship versus those not aware
- Existing customers versus non-customers
- People attending Olympic events versus non-attendees versus non-TV watchers
- Londoners versus Rest of Country
And so on — including combinations of the above.
We have also included the same brand measures for the sponsor's key competitors. This will enable us to identify whether the effects we are seeing are either:
1. Specific to the sponsor's brand only — indicating that sponsoring the Games has indeed affected attitudes towards the sponsor's brand
or
2. Common across all brands — indicating that the pattern is simply a reflection of how that audience group feel towards all brands in that category anyway
We launched the survey in March 2011 to give us a base point 16 months before the Games commenced. It will continue till August 2013, a year after the Games conclude, to identify how much of the effect endures over the long term.
Initial Findings
Of course, it's too early to say what the full effect of 2012 Games sponsorship will be. But, even before the Games commenced, we saw powerful effects for a number of brands. The evidence suggests this can be attributed to their Olympic sponsorship. For example:
- Association for sponsors' brands with attributes such as "World Class", "Trustworthy," and "Inspiring" are, on average, 25-50% higher amongst those aware of the companies' sponsorships
- Consideration to purchase sponsors' products is, on average, 50% higher amongst those aware of the companies' sponsorships
- Looking at a sponsor such as BP specifically, the Olympics has made a significant contribution to helping build more positive brand imagery — helping build perceptions that over the past 12 months BP has been "Working towards a cleaner planet" and "Trying to make a positive difference to society". The same trends are not apparent for Shell and Exxon — indicating a genuine Olympic effect.
- Making the association between Games and sponsor relevant can create a really powerful effect amongst consumers. Some of the biggest gains in cut-through in the final weeks before the Games were achieved by P&G, off the back of their "Proud sponsor of Mums" campaign
- Despite the media's best efforts, people feel remarkably warmly towards the sponsors: three times as many agree as disagree with the statement "The Olympic Games are better as a result of the money received from sponsors"; and twice as many disagree as agree that "The Olympic Games shouldn't have any sponsors."
This doesn't necessarily say that all Olympics sponsorships are equally powerful, though. To take one example, Acer invested millions as one of the IOC's TOP partners, but one week before the Games began, only 10% of respondents were aware that it was a sponsor. This is a similar level of recognition to Holiday Inn, which invested significantly less as a Tier 3 partner.
Sponsorship of the Olympic Games involves such a significant business investment, it seems astonishing that so little evidence has existed to help inform the decision-making process. As our study continues to unfold into August 2013, we'll see how these effects play out after the closing ceremonies bring these Games to an end.
