China's Record Leaves Sports Advertising in Dilemma

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China's Record Leaves Sports Advertising in Dilemma

Business Daily (Nairobi)

July 2, 2008

Analysis Article By Wanjiru Waithaka

Some politicians and activists have asked their countries to boycott the 2008 Beijing Olympics citing China's human rights record in Tibet.

The Olympic torch relay was marked by protests in London and Paris and organizers rerouted it at the last minute in San Francisco to avoid pro-Tibet protesters. Now, where does advertising go from here?

An advertising boycott of the Olympics is unlikely as it remains the world's biggest sporting event in terms of showcasing brands.

For one, full-fledged Olympic sponsors and media buyers are tightly locked into the event as part of costly long-term commercial deals with Games organizers.

But that aside, for marketers the potential gains from participating still outweighs the disadvantages caused by the turmoil.

And with the games just six weeks away the marketing juggernaut harnessed to the sport is rolling and all indications are that advertising revenue for these Olympics - expected to hit the $1 billion mark (Sh65 billion) - is going to break previous records.

The feeding frenzy by marketers in modern day sporting events is illustrated by the extent to which companies are willing to pour money to create special advertisements with a shelf life that does not last beyond the event.

A good example is the Super Bowl in the US in which a 30 - second spot cost as much as $2.6 million (Sh169 million) last year.

Is it worth it? "This event has a very high TV audience and the number of eyeballs is sufficient to register your message. Many companies also hype up the event and the ad they will show so that on the material day everyone is waiting to see it," says Sameer Ambegaonkar, managing director of Lowe Scanad.

For advertisers it's a platform to showcase their creativity which has led to the Super bowl being described as a string of entertaining adverts interrupted from time to time by a football game. But few local companies can afford to invest large sums in an advert with a shelf life of just a few weeks.

Nakumatt Holdings is one of the few and had a World Cup advert developed ahead of the 2006 tournament. "Given the passion that such seasons as the World Cup, Diwali, Christmas, and Easter elicit, it's important to connect with the consumer," says Mr Thiagarajan Ramamurthy of Nakumatt.

Mr Ramamurthy says the company cannot afford to recycle it due to consumer dynamics, which keep changing.

Although he's not willing to disclose the cost of the advert, he says the investment is worth it as it helped the company to connect with consumers.

"Such seasons present opportunities for organizations to reconfirm their human face to their consumers. To remain relevant, we listen to our consumers and strive to meet their expectations," he says.

Coca-Cola on the other hand says its support of the World Cup is a reflection of its brand essence, "The Coca - Cola company recognizes the appeal of the world's largest soccer tournament," says Judy Kairo, strategic marketing manager, Coca- Cola East and Central Africa.

The company has been an official sponsor of the World Cup since 1978 and develops its adverts for use around the world.

"While ads have been previously used for more than one World Cup, the company usually develops new ones every four years as we always wish to remain relevant, to tap into trends and what appeals to our consumers," says Ms Kairo.

The company has also been a partner of the Olympics since 1928.

Earlier in the year the official sponsors were under pressure to withdraw their support for the games because of the situation in Tibet.

In a Press statement the company expressed deep concern for the situation on the ground in Tibet but said it would be inappropriate for sponsors to comment on the political situation of individual nations.

Analysts at Wharton Business School say that events like the Olympics, World Cup and Super bowl are not for pumping up short term sales and are best used as part of a broader advertising strategy. Some sporting events showcase more than advertising creativity.

Super Bowl adverts have transcended their marketing function and are now viewed as a cultural reflection of America at a particular moment in time.

During the height of the dot.com era, the adverts celebrated young and irreverent slacker-millionaires; in 2001, just months after the terrorist attacks on New York City and Washington, the adverts took on a sombre, patriotic tone.

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