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Welcome to the Danger Games

As the Olympic Games gear up in Sochi, the volatile climate around the LGBT community is a reminder to brands to be authentic and honest.
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For most businesses, large or small, a chance to advertise at the Olympics is probably too good to pass up. The visibility and revenue opportunities are worth billions of dollars, plus there's all of the goodwill that association with the global sporting event engenders.

This winter at Sochi, however, things are a bit different. The largest consumer brands in the world are advertising there, for sure. But the political environment surrounding the Olympics is fraught with the specter of human rights abuse. 

This summer, Russian President Vladimir Putin passed draconian national laws forbidding public displays of homosexuality--deemed propaganda--under threat of imprisonment and heavy fines. The laws have already led to significant violence against the LGBT community in Russia, and anger among LGBT people at home and abroad.

The risk is that any brand that's advertising in Sochi is likely to have its image smeared by the bad feeling engendered by such laws and actions, and that's exactly what's happening to some. So much so, the Winter Olympics is being dubbed the Danger Games in some circles.

A Branding Dilemma

McDonald's recently had its social-media campaign CheersToSochi commandeered by activists angered by McDonald's failure to acknowledge the bad situation for its gay customers there. Similarly, activists angered by the Coca-Cola logo appearing in news images of LGBT people being roughed up by security guards, many of whom wore the company's logo on their jackets, insisted that Coke give some response. Coca-Cola was also forced to take down an interactive social-media campaign that let customers write their names on images of Coke cans and share them with friends, after it came to light that users were not allowed to enter the word gay but could enter the word straight.

The LGBT population is about an $800 billion market, according to the most recent data from Harris Interactive, and it's an attractive selling opportunity to big brands.

Large companies are in something of a quandary. The LGBT population is about an $800 billion market, according to the most recent data from Harris Interactive. Yet big brands like Coca-Cola and McDonalds are often locked into multi-year advertising contracts with the International Olympics Committee, which reportedly raised $8 billion in sponsorships and broadcasting rights in the last two Olympics, that they can't easily break.

The New Marketing Landscape

As for small-business owners, you can learn plenty from larger brands' marketing difficulties during the games. Primarily, you have an obligation to be truthful with your customers. If there are problems, acknowledge them. You also have the advantage of being small. You are the public face of your company, so you can typically pivot and respond in quick succession.

"Small businesses tend to be more nimble and are able to react with more immediacy to a tricky situation," says Andy Bagnall, executive vice president of strategy at PrimeMedia, a niche marketing company. The firm notably is one of the first companies to successfully pitch the potential of the LGBT market in the 1990s to a Fortune 500 company, AT&T.

"It is not only the risk of alienating their LGBT customers, but people who, generally speaking, believe in fairness and equality, who may or may not be LGBT themselves," Bagnall says.

Just days ahead of the Winter Olympics, AT&T broke new ground again by becoming the first large corporation to publicly condemn Russia's anti-LGBT laws. AT&T is historically not a games sponsor, but it has sponsored the U.S. Olympic Committee for 30 years.

In a lengthy statement on AT&T's consumer blog, the company said:

AT&T has a long and proud history of support for the LGBT community in the United States and everywhere around the world where we do business. We support LGBT equality globally and we condemn violence, discrimination and harassment targeted against LGBT individuals everywhere. Russia’s law is harmful to LGBT individuals and families, and it’s harmful to a diverse society. 

Lessons of directness and honesty are something Robin Chase, founder of Zipcar, knows firsthand. Shortly after launching her company in 2000, she realized she had made a pricing miscalculation on her daily rate, which was much lower than it should have been. Chase had already signed up about 400 customers on the basis, in part, of that price point, but she quickly realized she would not succeed as a company if she didn't adjust the cost.

Many of Chase's employees said she would lose customers if she raised prices, because Zipcar had set up with different assumptions. But Chase says she chose to be forthright and honest, and sent her customers an email describing in detail her pricing mistake, and explaining that she had to raise her daily rate by 25 percent.

"I was very direct," Chase says. "I said we completely screwed up. I said we can't afford it; it was the wrong price point. Here's what it should be." The upshot was that only two members complained, and by reaching out to them directly, she was able to keep even those two on as customers.

"If the brand was doing the right thing all along, they can make apologies and be believed," Chase says.

Reflecting on the Olympics, though, Chase says things are a bit different for larger companies.

"If the brand was doing the right thing all along, they can make apologies and be believed," Chase says. "But if they have a history of jerkiness, which might be what provokes some of the bad feelings, well then, (there's) not much they can do about it."

Honesty and Controversy

Similarly, Antonia Opiah, the founder and owner of un'ruly, a site devoted to African-American women's hair and hair care products, decided last year she wanted to launch an awareness campaign for her business. She chose an unconventional method--she placed three women in New York City's Union Square Park with signs that said, "You Can Touch My Hair."

Opiah wanted the campaign to spur a dialogue about race.

"My parents' friends and I talk about how this occurs a lot in our lives, of people wanting to touch our hair," Opiah says. "I realized we could use this subject to have a conversation in a bigger way."

It certainly did spark a conversation, particularly on Twitter, where hundreds of people posted comments either supporting or angrily denouncing the exhibition. Some accused Opiah of creating something akin to a slave auction or a petting zoo.

But Opiah did not retreat, and after a week or so, the emotions died down.

"One thing I learned: If you don't respond to something controversial like this immediately, you lose the audience and the attention of the people you are trying to reach," Opiah says. More important, she learned you have to continue having the conversation with customers.

As un'ruly grew to include a network of related sites, the campaign helped bring Opiah's Web business to the attention of about 250,000 regular viewers. It also changed the company, investing it with more seriousness and a sense of mission than it had before, Opiah says. She adds that Coca-Cola could do something in Russia like what it did after the devastating hurricane in the Philippines this fall. Rather than advertise in the Philippines, Coca-Cola suspended its campaign there and donated those funds to helping victims of the devastation.

"The best way to show authenticity is to commit to the conversation you are trying to have," Opiah says. That's something about which brands large and small can agree.

IMAGE: Getty Images
Last updated: Feb 5, 2014

JEREMY QUITTNER | Staff Writer | Staff Writer, Inc. and Inc.com

Jeremy Quittner is a staff writer for Inc. magazine and Inc.com. He previously covered technology for American Banker and entrepreneurship for BusinessWeek.




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