BUSINESS

OLYMPIAN FINDINGS

SOME OLYMPIC SPONSORS FOUND THAT THEIR MESSAGES DID NOT MAKE A BIG IMPRESSION

D’ARCY JENISH November 28 1988
BUSINESS

OLYMPIAN FINDINGS

SOME OLYMPIC SPONSORS FOUND THAT THEIR MESSAGES DID NOT MAKE A BIG IMPRESSION

D’ARCY JENISH November 28 1988

OLYMPIAN FINDINGS

BUSINESS

SOME OLYMPIC SPONSORS FOUND THAT THEIR MESSAGES DID NOT MAKE A BIG IMPRESSION

Their dazzling performances at the 1988 Winter Olympics in Calgary lasted only a few minutes.

But millions of Canadians still remember that Ottawa figure skater Elizabeth Manley won a silver medal and that Banff,

Alta., skier Karen Percy captured two bronzes. Most of their fellow Canadian team members, however, are not as firmly etched in memory.

At the same time, a Decima Research Ltd. study of 1,700 people across Canada suggests that some of the 96 companies that paid $87 million to become official sponsors, licensees and suppliers of the Games mirrored that outcome. According to the private Decima survey commissioned by a number of Olympic sponsors and obtained by Maclean’s, Calgary-based Petro-Canada was one of the most successful companies in the Games. For other firms, Decima figures indicate that their messages tended to get lost in the barrage of Olympic advertising, although John Labatt Ltd., for one, spent $10 million promoting the company’s ties to the Olympics. As a result,

Barry Snetsinger, former Labatt national promotion director during the Olympics, says that major corporations may reconsider their role in future Games. Said Snetsinger: “There is going to be a shaking-out period. Corporations will have to reassess if they are content to be lost in the advertising clutter and only achieve a warm glow for a few employees.”

Decima’s senior research consultant, David MacMartin, told Maclean ’s that most sponsors simply lost their multimillion-dollar messages in an avalanche of advertising and promotions surrounding the Olympics. Following the Games, public awareness of sponsors dropped sharply and suddenly, particularly outside Calgary. Some sponsors said that they were “ambushed” by competitors who developed Olym-

pic promotions even though they were not official sponsors. For companies paying a minimum of $2 million to become a sponsor, the failure to stand out was particularly galling because the Calgary Olympic Organizing Committee (OCO) sold exclusive sponsorship rights to only one company in the different product categories. And some advertising executives say that the media glut resulted from the fact that the OCO sold the right to officially associate with the Olympics to too many firms. As a result, the firms’ advertisements were lost in a flood of messages and didn’t have an impact on their intended audience.

Despite the results of the Decima survey,

most corporations stand behind their expenditures in the Olympics, saying that their promotional campaigns were highly successful during the actual Games. And even if they did not increase product sales, they helped raise company morale and the firm’s image. But if sponsoring the Games was intended to produce long-term improvements in company performance, the Decima survey suggests that only a few may benefit. According to the report, “the data confirms that Petro-Canada and CocaCola Canada Ltd. have indeed maintained a high level of recognition across the board.

They have the best potential for maintaining a significant degree of public memory of their Olympic involvement.”

The key to Petro-Canada’s success was its sponsorship of the 88-day Olympic torch relay, which began in St. John’s, Nfld., on Nov. 17, 1987. The relay concluded on Feb. 13, 1988, when the torch was used to light the Olympic flame at the opening ceremonies of the Games. A series of four surveys, which Decima began just before the Olympics began and concluded last May, revealed that Petro-Canada had gen-

erated what Toronto event-marketing analyst Gordon Hendren called an “excellent level.” But because corporate support of an Olympic event is a relatively new business, it is difficult to put the Decima result in perspective. Hendren, senior vice-president of Christopher Lang and Associates Ltd., Canada’s largest event-marketing firm, said that by comparison with other major corporations that support sporting events, Petro-Canada had done extremely well with the Olympics. And the results of the last survey indicated that 20 per cent of the 1,700 Canadians surveyed in May were still aware of PetroCanada’s Olympic involvement. Other major sponsors ranked well below Petro-Canada in public recognition of their Olympic involvement. The Royal Bank of Canada, an official sponsor that advertised its Olympic-coin series extensively during the Games, achieved only a oneper-cent awareness rating across Canada.

Other sponsors who apparently achieved only low or modest recognition achievements were Labatt (six per cent), General Motors of Canada Ltd. (five per cent) and Kodak Canada Inc. (three per cent). In results from Western Canada only, where the Games should have had the greatest impact, official sponsor Shell Canada Ltd. had a three-per-cent recognition factor, while nonsponsor Imperial Oil Ltd. also had a three-per-cent rating. The only firms close to Petro-Canada’s consistent 20-per-cent rating in the West were CocaCola, which had a 12-per-cent awareness rating, and Canada Safeway Ltd., which reached eight per cent. According to the Decima survey, some firms did badly I because consumers simply ¡5 forgot, or did not know, that S they were Olympic sponsors. Indeed, despite the fact that Labatt, the giant London, Ont.-based brewery, spent $10 million on its Olympic campaign, and even paid the fares for the families of Canadian athletes to go to the Games, Labatt’s recognition factor, just three months after the Olympics, had fallen to sue per cent nationally from 11 per cent in February.

Patricia Bowles, a partner at Toronto-based MacLaren: Lintas Inc., which prepares ad campaigns for some of Canada’s top companies, said that the performance of Olympic sponsorship in raising corporate profiles will force many executives to re-examine those programs. She predicted that they will adopt a

“once burned, twice shy” approach. On the other hand, Robert Wilson-Rogers, president of The Rogers Group, a Toronto sports promotion consulting firm, argued that most large companies will still find it difficult to abandon an event like the Olympics to their competitors. Said Wilson-Rogers: “When you’re number 1 in your industry, there is a lot of pressure on you to participate.”

In fact, corporate sponsorship of sports and cultural events has become one of the fastestgrowing segments of the entire advertising and promotions business in Canada, according to several experts. Christopher Lang, chairman of Christopher Lang and Associates, said that in 1987 about 600 companies spent $1.5 billion ' buying the rights to sponsor and promote different events, including amateur sports.

In assessing sponsorship of the Calgary Olympics, almost everyone in the advertising industry says that Petro-Canada was far more successful than any of its rivals. Said WilsonRogers: “When you look at the Olympics as a whole, there’s one company that stands out— Petro-Canada.” But Petro-Canada, headed by company president Kenneth Lakusta, sponsored an attraction that literally spanned the country, at a cost estimated as high as $20 million. Indeed, advertising-industry experts contend that the Crown corporation has turned a two-week event into a five-year promotional triumph. Robert Foulkes, Petro-Canada’s vicepresident of public relations, said that the corporation reached an agreement with the OCO to sponsor the torch relay in September, 1985, on a budget of $5.5 million.

In November, 1986, Petro-Canada launched its first television and radio advertisements to promote the relay. At the same time, the company launched the first of six sales promotions tied to the relay. Motorists were entitled to buy a tall glass bearing the Olympic rings and OCO symbol for $1 with every fill-up of 25 litres or more. Currently, the company is running another sales promotion, in which the motorist can buy a brandy glass bearing a stylized reference to the Olympics. To date, PetroCanada has sold a total of 38 million glasses and donated 10 cents from each sale to the Olympic Torch Relay Legacy Fund. The full details of how the rest of the earnings from the sales will be distributed are not known. Each year, the fund will distribute close to $250,000 to Canadian athletes who are training for the Olympics.

The relay itself also turned into an enormous promotional bonanza for the oil company. About 6.5 million Canadians applied to carry the torch, although only 6,950 were selected. Foulkes said that the relay received coverage in The Toronto Star on 82 days, in the Montreal Gazette on 40 days and in the Toronto Globe and Mail on 23 days. The relay was extensively covered by Maclean ’s and network TV, and a Petro-Canada crew that covered the relay daily fed footage to every outlet in Canada by satellite.

By November, 1987, even before the start of the relay, 42 per cent of Canadians and 76 per cent of Calgarians knew that Petro-Canada

was sponsoring the event. While the Games were on, 55 per cent of Canadians were aware that Petro-Canada had sponsored the relay and 92 per cent of those surveyed said that they “approved” of the company’s involvement. By comparison, according to Decima, General Motors and Shell got only a six-per-cent recognition factor during the same period. Although Petro-Canada’s promotional efforts were unrivalled, Labatt found that its message was somewhat diluted by Montreal-based Molson Breweries of Canada Ltd., which had no official status at the Games. In 1985, Molson began sponsoring Canadian national Winter Olympic

teams and eventually signed contracts with a total of 13, including the men’s alpine ski team, the bobsleigh team and the speed skating team. Molson sponsored 23 international competitions hosted by Canada in the three years before the Games. As a result, Molson developed advertising campaigns around its sponsorship of national teams. Said Molson promotions director Jacques Burelle: “We definitely did a number on them.”

John Hudson, Labatt’s director of media properties, said that his company’s sponsorship program involved covering all the costs of bringing athletes’ parents to Calgary for the Games. He recalled that the brewery created a TV-advertising campaign featuring some of the parents and their children and ran a hospitality centre in Calgary for parents. Hudson maintained that Labatt’s market research over a one-year period ending in March, 1988, revealed that Canadians had not confused Labatt and Molson. But Molson executives contend that their campaign was effective and gave the brewery excellent exposure, although the com-

pany was not an official sponsor. And according to Decima, three months after the Games, three per cent of people polled nationally associated Molson with the Olympics, compared with six per cent for official sponsor Labatt.

Enhancing the corporate image, and earnings, was also the objective for General Motors, the transportation sponsor for the Games. Blair Upton, project manager for the Calgary Olympics, said that the company lent the OCO about 2,000 cars over a three-year period ending in June, 1988. The vehicles were used to transport athletes, event judges, journalists and VIPs. But like many other firms in

the Decima survey, its recognition factor remained fairly constant before and during the Games.

Still, despite the risks involved in sponsoring sporting events, most advertising-industry experts predict that the trend will continue. Petro-Canada’s Foulkes said that most companies are finding it increasingly difficult to get their message across through conventional media advertising, which includes radio, television, newspapers and magazines. In particular, TV audiences are becoming more and more fragmented as new channels become available. The advent of video cassette recorders has led people to spend less time watching commercial TV, and the popularity of hand-held channelswitchers means that many viewers flip to another program rather than watch commercials. As a result, Snetsinger said, despite the risks, many corporations will continue to be lured by events that promise to raise their products above the crowded playing field.

D’ARCY JENISH with John Daly in Toronto