One of the world’s top experts on Olympic marketing thinks that Olympic sponsors will be able to profit from their support of this year’s Games in spite of the myriad problems in Tokyo.
Involved with Olympic sponsorships for close to 40 years, CEO of 21 Marketing Rob Prazmark among other things helped create and sell the IOC’s worldwide Olympic Partner Programme. Sponsorships bring the IOC around $5 billion every four years, and a record number of domestic and international sponsors had lined up to support Tokyo 2020 before the COVID-19 pandemic hit. While there have been some major setbacks to sponsor revenue, particularly with the lack of spectators at Games venues, Prazmark told Around the Rings founder Ed Hula that the situation is far from lost.
“While the fans are not in the stands and the best laid out marketing plans in the host country have gone awry, I believe that the viewership, if you include mainstream media and streaming around the globe, will be very, very strong. I like to tell people you could put these Olympic Games on the moon, and it would be a success in terms of the people back on Earth watching it, and I think when all is said and done, they will have some great stories”, Prazmark maintained.
The Opening Ceremony, Prazmark acknowledged, was far from a success for sponsors. Held at a time when public opinion about the Games in Japan was overwhelmingly negative, TV and streaming viewership dropped to new lows, and some sponsors including Toyota and Bridgestone even pulled out of the ceremony for that reason. However, Prazmark stated that there is room for sponsors to salvage profits, since “now the competition is underway that the global audience, especially the United States, will become more and more involved as the competition heats up.”
Analyzing the long-term impact for sponsors, including what the IOC might do to make it better for them going forward, Prazmark believes the multinational sponsors of the IOC can recoup their losses over the course of future Games, but is less optimistic about the prospects of Japan-based companies.
“As long as I’ve known the IOC and the sponsors involved, everyone has a very long term view. So you may have to go through a couple of hiccups – and this was a big one and postponement – but these brands and these broadcasters are in it, like NBC, through 2032. So for every hiccup... you’ll have something spectacular coming out of Los Angeles or something spectacular coming out of Beijing in a few months.”
“The problem with Japanese based companies is they don’t have the ability to recover on a long term basis because the Games are gone”.
Looking toward upcoming editions of the Games, Prazmark views both Paris 2024 and Los Angeles 2028 as very attractive for potential sponsors, while Brisbane 2032 also has promise despite its time difference presenting a challenge for those in the United States. As far as sponsor revenues at Beijing 2022 go, a lot hinges for Prazmark on how much of a physical presence spectators, as well as the sponsors themselves, are allowed to have at the venues. According to him, concerns such as human rights abuses will likely not cause sponsors to abandon the Beijing Games despite pressure from governments and advocacy groups.
“We had the same human rights concerns going into the 2008 Games with Beijing and we seem to have weathered it very well. It’ll probably be the same thing going into these Winter Games”.
“On coronavirus... I would hope that the organizing committee and the IOC come up with a plan of making it easier to get into Beijing for some of these sponsors, clients and customers and employees because that is a big asset that they are buying”, said Prazmark, referring to the Chinese consumer market which is the largest by population in the world.
He also says business-to-consumer companies like Coca-Cola will be hurt the most by strict coronavirus regulations at the Games. Meanwhile business-to-business companies, such as Atos and others in the technology industry, “will still be able to tell their story” to clients, so “are not as damaged” heading into Beijing.
All in all, with a record 15 companies now part of the Olympic Partner Program he helped launch, Prazmark is convinced that the future for Olympic sponsors looks bright, praising the IOC for keeping up with the times and evolving the kinds of companies it partners with.
“10, 20, 30 years ago I never would have thought Airbnb or that type of company would be able to step up. You have Salesforce, another one that you know is more intellectually based, and of course there’s always an evolution. The original [Olympic Partner Program] had companies like Kodak and Xerox – it’s just the evolution of these corporations that you’ve got to stay with the times. I applaud the IOC and their sales team for going out and getting the next generation like Salesforce and Airbnb to replace those other brands that may have moved on”.
“But social connectivity and streaming and all that stuff that we couldn’t even imagine 10-15 years ago: that’s going to really be the future of keeping the Olympic Games relevant. The audience is up because the marketplace will follow where the audiences are.”