The Olympic Games can be a unique opportunity for international brands to advertise their products or services to a truly worldwide audience. However, barriers have been constructed by International Olympic Committee (IOC) to make that task quite difficult unless the brand is spending $200 million for a 4 year sponsorship.
Brands that wish to become true sponsors, but pay less, have the opportunity to associate with individual countries through their respective Olympic Committees. For instance, official sponsorship relationships with the U.S. Olympic team run roughly $40 million. It is still a large spend, and many brands have determined that the exorbitant payment is not justified by an anticipated return on investment.
Why do brands have such a tough time with ambushing the Olympics?
Ambush marketing is typically defined as a tactic brands employ to raise awareness of such companies through covert mechanisms. It is a concept tested by smaller brands that do not have the requisite funds to spend massive quantities of money on official sponsorship as well as more established brands that simply want to save money and attract eyeballs through creative means. There are risks inherent, including the potential of liability based on litigation filed by an organizing body (i.e. the IOC) as well as that the plan will fail to accomplish its goals.
Despite health issues (i.e. Zika), performance enhancing drugs (i.e. Russia) and other issues surrounding the 2016 Olympics, the IOC is continuing to go to great lengths to protect its brand. Brazil has enacted new laws to strengthen rules around ambush marketing and the U.S. Olympic Committee (USOC) is paying closer attention to social media posts from athletes.
The USOC is particularly diligent in protecting against infringement and has warned companies about "stealing" intellectual property such as "Olympic," "Olympian" and "Go For The Gold." Warnings can be following up by legal action if the threats are not taken seriously.
How can brands still take advantage of the Olympics movement?
"Brands can avoid the risk of running afoul of the relevant laws by producing generic, yet relevant, marketing materials, which could focus on the love of sport generally and/or include incorporating past performers of the Olympic Games," says Chris Chase, a Partner at law firm Frankfurt Kurnit Klein & Selz. "If they acted before January 27 of this year, brands could also have availed themselves of the new Rule 40 waiver system, which could have enabled them to use current participants of the Olympic Games in marketing as long as the USOC approved such planned materials."
Rule 40 of the Olympic Charter precludes Olympians from allowing third parties to use their publicity rights (i.e. name, image and likeness) in advertising during a window that runs from 9 days before the start of the Olympics through 3 days after the Games' conclusion. Thewaiver system referenced by Chase allows non-sponsors to run certain advertisements during the aforesaid window as long as the marketing is generic and does not use trademarks that the USOC and IOC will vigorously enforce.
"It appears that Under Armour (which produced materials featuring Michael Phelps and members of USA Gymnastics) and Gatorade (which produced materials featuring Usain Bolt and Paul George) have taken advantage of the waiver process," added Chase. "Even those brands with waivers, however, are seemingly not allowed to produce real-time posts if one of their endorsers performs well at the Rio Games, as the waivers only applied to materials pre-approved by the USOC."
Thus, expect crafty ambushing to be in full force surrounding the Rio Olympics, led by many brands that failed to apply under the waiver system referenced above.