Return to Home Page 1997 Ambush Marketing Paul Herbig INTRODUCTION What is Ambush Marketing? Ambush Marketing means when companies try to pass themselves off as official sponsors when they are not. Most of the advertisements are done during major sporting events. Companies begin to advertise nationwide. The cost for advertising nationwide is often in the area of $40 million or even more by the biggest sponsors (Thomas,1996,P.B1). But that is not the only way to advertise on major events. There are alternatives that are available at much lower cost. Some companies advertise their products which would be unnoticeable to the public. On the other hand, top-of-the-line sponsorship give the companies more marketing power. For example, only high level sponsors have virtually unrestricted use of the event's logos and other recognizable items. Moreover, companies with lower tier affiliations often are prohibited from advertising in the mass market media. The definition of ambush marketing is pretending to be a sponsor of a major sporting events but actually not being a sponsor. In a research that was conducted indicated that the public does not like being fooled. The research reveals that once the public finds a company lying about being a sponsor, they begin to question what else is the company is lying about. If they are cheating the Olympics or the Super Bowl, the thinking goes, they're probably cheating me too. This paper will focus on how ambush marketing is related to marketing and the effects of it. Ambush Marketing would most likely occur during major sporting events such as NFL football games, the World Cup, and the Summer Olympics this year. Ambush Marketing and the NFL The hottest man in the NFL as far as ambush marketing is concern is Jerry Jones the owner on the Dallas Cowboys. Jerry Jones' new National Football League marketing philosophy doesn't add up to a lot of cents for the NFL's marketing and media partners. The NFL and the Cowboy's owner, Jerry Jones, continued their ugly and public feud over marketing matters with the league slapping Mr. Jones with a $300 million lawsuit for making ambush marketing sponsorship pacts with NFL non-sponsors Nike and Coca-Cola Co (Jensen,1995,P.7). The actions taken by the NFL may have derailed Mr. Jones marketing efforts for the moment that the negative publicity has prompted American Express Co. to reconsider its proposed deal with Mr. Jones to become a sponsor of Texas Stadium. The multi year deal has been said to be worth $15 to $20 million. Meanwhile, sponsors and media partners are concern that the negative publicity will alienate fans, but certain that Mr. Jones' way of doing business, with team marketing themselves instead of NFL properties, would not be the best for them. During the next few weeks, NFL Properties, sponsors, and media partners will create a television program with Visa USA-Fox teaming up to air it. The program "Call for Quarterbacks" will air during Fox's prime-time programming. Celebrity quarterbacks will guess star in the Fox program. A promotional contest will precede the program with Visa running a spot each night. This is set out to create a unprecedented program that brought together our sponsorship, licensing and television concerns in an entertainment marketing efforts designed to move NFL merchandise in a key selling season (Jensen,1995,P.8). Reports show that Mr. Jones disputes and ideas with the league are being supported by other owners. But sponsors say the value of the rights they own would be diminished if their deals didn't cover all teams. Moreover, sponsors say owners would be fooling themselves if they think can individually get the kind of deals the Cowboys have gotten. The conventional wisdom is that Pepsi and Nike wouldn't had paid what they did if Coca-Cola Co. and Reebok International didn't hold national rights. Mr. Jones way of doing things isn't best for marketers. For example, sales of NFL licensed products hit $3 billion last year. NFL Properties sells the rights and handles national and local marketing and promotions, quality control and trademark protection. If those tasks reverted to teams, it would be wreak havoc on the licensing business from which it may never recover. If sponsors and licensees were denied a one-stop shopping, a "Call for Quarterbacks" promotion would require Visa to do 30 separate deals instead of one. Same goes for True Value Hardware, which is teaming up with vendors to create a products bearing the marque of each market's team. Decentralization would also undetermined cross-promotion among sponsors and TV networks, most of which are initiated by NFL Properties. The Visa-Fox program or Shell Oil Co.'s "Drive to the Super Bowl Sweepstakes," a joint venture with Coca-Cola, Ford Motor Co. and Fleer Corp. trading cards, would more difficult, if not impossible. Moreover, sponsors say a decentralized system would allow for shortcuts to create national programs like using a single team with national appeal, or just focusing on teams in the markets (Jensen,1995,P.8). Ambush Marketing and The World Cup During the World Cup a couple of years ago, the companies had their hands tide with ambush marketing. The Institute of Sports Sponsorships, which represents commercial sponsors of sports, is moving to where media sponsors hijack events sponsored by other companies. hijacking is one of the key issues addressed in a ten points code of conduct to be launched by the ISS. The code, which aims to ensure fair dealing between commercial sponsors and sporting organizations, is intended to instil greater discipline in the unregulated $250 million market (Benady,1994,P.6). Furthermore, the code calls on ISS members to refrain from program sponsorship of sporting events, unless it has first been offered to the event sponsor and declined. One example of hijacking occurred during the 1991 World Cup when event sponsors headed by Heinz were hijacked and eclipsed by Sony, which had the broadcasting rights. The code also calls on sponsors to exercise restrain in branding at events and addresses issues of compliance with legislation, fair dealing and safety. ISS is also trying t create a reasonable discipline that apportions rights. This is part of the process of sponsorship coming of age as a marketing communication tool. Still anything that raises standards in sponsorships area must be a good thing. Ambush Marketing and the NBA Pepsi Co. again is proving that there is plenty of room for non-league sponsors in the world of sports marketing, whether sports leagues and their sponsors like or not. The most recent move made by PepsiCo units Taco Bell Corp. and Pepsi Cola Co. to capitalize on professional basketball icons. Which are challenging the gentlemen's rules of official sponsorships, making what was once called ambush marketing more commonplace than ever. Some observes still cry out foul as marketers from PepsiCo to Burger King Corp. launch high profile sports campaigns without ponying up the once requisite heavy sponsorship dollar (Whalen,1995,P.3). But most deals become more routine when official sponsors like Coca-Cola Co. and McDonald's Corp. do not defend their positions with more powerful tie-ins or re-evaluation to their sponsorships altogether. Following Pepsi-Cola Co.'s surprise $50 million sponsorship deal with the Dallas Cowboys' Texas Stadium, ambushing the National Football League sponsor Coca-Cola, Taco Bell took advantage of the National Basketball Association labor dispute to organize a pay-per-view bout between endorser Shaquille O'Neal and Hakeem Olajuwon. Taco Bell hinted at a live match up months ago starting the two NBA centers in a TV spot months ago. But it wasn't able to organize the event until labor talks between NBA team owners and players collapsed in July. The two stars will compete for a $1 million prize later in the year. Other marketers are being wooed for secondary sponsorship positions, including Shaq's footwear sponsor, Reebok International and Spalding Sports Worldwide, which has endorsement deals with both stars. A marketing agent for several NBA's biggest marketing stars said that the match is tacky and that he wouldn't advise is clients not to be involved in such silliness it cheapens the NBA brand name (Whalen,1995,P.3). Pepsi and taco Bell can run effective publicity campaigns, McDonald's and Sprite can create a fully integrated marketing efforts that can move products. Sprite has had a 15% surge in sales since it became the NBA's official soft drink sponsor last year. Taco Bell isn't content to use the match up as a pure publicity stunt. It will sell specially priced food packages and give away collectors cups. The merchandising possibilities is endless. Taco Bell is considering rebroadcasting the event and possibly selling it on video. People know that McDonald's is the NBA sponsor and they have done a great job, but the world of sports is big enough for a lot of players (Whalen,1995,P.3). Ambush Marketing and The Summer Olympics This year's Summer Olympics Games in Atlanta promise to be the most monumental sports marketing event in history, which is why a legion of marketers from Amheuser-Busch to Xerox Corp. have invested $40 million each for global or domestic ring rights, and why rivals are crafting marketing subterfuges that ride the coattails of the Games without doling out sponsorship dollars. There's a growing concern among sponsors like general Motors Corp., IBM Corp. and Sara Lee Corp. about this year's Olympic marketing mayhem. But these worries about ambush marketing in current Olympic jargon are starting to focus more on activities with the ranks of Olympic sponsors than the threat of international ambush efforts from outside. A 1.6 billion problem The blame is being place on the Olympics which in their need for more money to stage a 1.6 billion mega event, create an environment that fosters ambush activity. These concerns were brought to the attention at a recent Sportsmanship Forum, a roundtable on sports marketing issues that included Reebok International and ABC sports, as well as, GM, IBM and Sara Lee. The forum was organized by Clarion Performance Properties in Greenwich, Conn. (Jensen,1995,P.25). Sponsors stacking up That's no laughing matter at IBM. IBM occupies a sponsorship category technology that is undergoing drastic change and convergence, pushing companies like AT&T and Xerox, both also Olympic sponsors, into competition in the computing and communications area. BellSouth Corp. and Scientific Atlanta Inc., potential competitors in fast growing entertainment and communications technology, also hold ring rights. Surprisingly, when it came down to efforts to stop ambush marketing, there was little disagreement among endorsement activities. A well run ambush is a fantastic marketing exercise. Ambush marketing as a viable alternative in every sponsorship opportunity. Among the reason to applaud clever ambush marketing is that it's cheaper and more easily implemented at the last minute. TV deals promotes ambushes The Games also allow for ambush efforts because their need for a large TV rights fees makes it impossible for a network to sell media only to Olympic sponsor, opening the doors to non-sponsors with advertising inspired by Olympic imagery. If network spends $450 million for an Olympics, as NBC spend for the '96 Summer Olympics, they have to make money back (Jensen,1995,P.25). Olympic organizers intend to go after ambushers with aggressive public relations campaign. They also look for celebrity endorser and a great deal of cross-promotion among sponsors to reinforce their official rights holder status. Ambush protection for Olympic Games It's the "Rosie Ruiz" of the corporate sponsorship, in which an advertiser tries to show up at the finish line of an event without any sweat on its gym shorts. This is how ambush marketing was recently defined by Darby Coker of the Atlanta Committee for the Olympic Games (Florin,1995,P.22). Another definition of ambush marketing is the practice by which an advertiser tries to associate itself with a particular event without paying the sponsorship fees. For example, in the 1994 Winter Olympics in Norway, American Express's advertising campaign was "If you're traveling to Lilehammer, you'll need a passport, but you don't need a Visa." Of course, Visa was the official sponsor of those Olympic Games. for the 1996 Summer Olympics, the Atlanta Committee has establish a sponsor protection program. If a non-sponsor attempts to ambush the Games, the protection program will present the ambusher with market research within 48 hours of the ad's first appearance, indicating that its advertising is deceiving the public. If the ad is not immediately pulled, the program is prepared to call a press conference announcing the ambush incident. It will also run ads in major publications condemning the ambusher for exploiting the Olympic Games without paying the sponsorship fees that are used to pay for, among other things, the training of Olympic athletes (Florin,1995,P.22). These measures will create a publicity nightmare that most non-sponsors will want to avoid. However, not everyone is convinced that the Olympic Committee's approach will have the desired effect. Protecting the name One of the strengths of Olympics is its guarantee of exclusivity. Sponsors are willing to pay more to be official Olympic soft drink, Olympic credit card, or Olympic delivery system. Xerox is candid about wanting to be the only document processor, and defense of its role has even played a part in Kodak's continued presence ( Protecting the Name,1996). If companies weren't sponsoring the Games, there competitors would be. So when a company that is not a sponsor suggest that it is, the Olympic family, especially the sponsors become very angry. Companies that do not put a dime in staging the Games but try to cleverly associate themselves with the Olympics to confuse the consumer are stealing from Olympic athletes. For example, After rejecting TOP in 1985, American Express promoted medallions supporting an "International Olympic Heritage Committee," something totally unconnected with the Games; then it retouched photos of Seoul's Olympic Stadium from the Asian games to make them resemble the 1988 Olympics (Protecting the Name,1996). The Olympic sponsor from a marketing point of view is spotting his competitor $40 million. They would rather not have the five rings and have the $40 million in their pocket to chase this guy who does have them. But not all companies feel the same way. Visa International know's that its expensive, but they think that it is a good investment. Visa's market share in the U.S. has gone from 45% to $49.4%. Also they think that it is important to people to feel good about them and what they do. Sponsoring the Olympics Games does that for Visa (Protecting the Name,1996). As mentioned earlier, to become a n official sponsor of the Olympics will cost the company $40 to $100 million. but there is an alternative that will qualify as ambush marketing. For example, McDonald's Corp. is the official sponsor of the Olympics which will provide McDonald's restaurants in Atlanta for athletes and coaches, but they are not the"food server manager" of the 1996 Atlanta Olympic Games. That title belongs to Aramark Corp. an official supplier of the Games, the cost to Aramak: is between $5 million and $10 million goods and services for its dinning facilities (Thomas,1996,P.B1). Becoming the official supplier, which may cost less than $1 million in products and services, is just one way for small companies market themselves using the Olympics. But being a top-of-the-line sponsor like McDonald's gives them more marketing power than being a lower tier sponsor. Still, Aramark does not care about reaching the general public. They are more interested in reaching their clientele mainly executives of big companies and institutions. So the company is holding 26 banquets across the country where top clients and prospects will listen to Olympic athletes speak, sample food from a "world menu" developed for Olympic athletes and hear Aramark's part in the Olympics (Thomas,1996,P.B5). Kodak vs. Fuji It wasn't Kodak's ideal moment. In New York, an elaborate display honoring 100 years of track and field will be unveiled, featuring past Olympic athletes along side 1996 hopefuls. The exhibit journeys across the U.S. landing in Atlanta in time for the Summer Olympics. Called Images of Excellence, it is full of photos and not surprisingly cosponsored by a photo company Fuji Photo Film of Tokyo. But Fuji is not the official sponsor of the Olympics That title belongs to arch-rival Eastman Kodak of Rochester, NY. Kodak reportedly spend about $40 million to be the sole imaging sponsor of the 1996 Games (Bounds,1995,). The concern is that people will walk away thinking that another film company besides Kodak is an Olympic sponsor says Darby Coker, a director of marketing for the Atlanta Committee for the Olympic Games. It erodes their ability to raise funds from paying sponsors in the future. The Atlanta committee is promising to crack down on non-sponsor who feed off the Olympics, and Images of Excellence could become on of the first tests of the committee's hardball stance. Fuji which will advertise on the radio and on newspaper, believe that the promotion will take advantage of the country's strong interest in sports. Fuji also plans to offer a poster series and desk calendar featuring athletes such as Dan O'BRIEN and Michael Johnson, both strong contenders for the Olympic team. Although Fuji as sponsor the track and field since 1990, Images of Excellence show just how blurry the line is between savvy marketing and blatant ambushing can become. Conclusion In conclusion, today sponsors are more aware of the necessity to ensure their brands as well as their money that is attached to the event. They have woken up to the risk of ambush marketing in which other companies, not the event's main sponsors, step in to exploit the potential of a major event. The aim to stop marketing ambushes of the event, ranging from rogue products bearing the event's logo to big campaigns by companies have not paid a penny to be associated with the sports event. Furthermore, there are some actions that are being taken to reduce the use of ambush marketing the sports world market. The Atlanta Olympic Committee is will enforce a penalty for companies that follow the ambush marketing tactics. Ambush marketing not only happens in sporting events, but ambush marketing occurs during the sporting events the most. Sporting events are consider one of he biggest markets of today, and when there viewers there will be money involved. And sponsorship requires a large amount of money. As for the future of ambush marketing, I think there will be less ambush marketing in the next couple of years. There will be more restrictions on ambush marketers that will prohibit companies from exploiting the consumers. And if the companies continue to ambush the market organizer will try to give bad publicity to the ambusher. Reference Benady, Alex. 1994. "ISS Wants Code on TV Hijacker" Advertising Age. 29 September P.6. Bounds, Wendy. 1995. "Fuji Move May Miff Kodak at Olympics" Florin, Ken and David Carlin. 1995. "Ambush Protection for Olympic Sponsor" Advertising Age P. 22, 24. Jensen, Jeff. 1995. "Ambush League" Advertising Age. 24 April P.25. Jensen, Jeff. 1996. "Jones Fails to Snare More NFL Renegades" Advertising Age P. 7-8. "Protecting the Name" 1996. Thomas, Emory Jr. 1996. "Thrifty Businesses Exploit Cheap Links to Olympics" The wall Street Journal 11 April P. B1,B5. Whalen, Jeanne and Jeff Jensen. 1995. "PepsiCo Units Play the Ambush Game" Advertising Age P.3.