Red Dirt RubyConf 2011

  • Keynote
    Aaron Patterson
    Open source contributions include:
    ARel, Nokogiri, and Mechanize
    Aaron Patterson - AT&T Interactive
  • Keynote
    Dr Nic Williams
    Open source contributions include:
    Hudson.rb, RoR Textmate Bundle, and ChocTop
    Dr Nic Williams - Engine Yard
  • Conference Themes
    nike id youth
    The Tricky Game of Olympic Sponsorship Lolo Jones, the American track and field star who is competingat theLondon Summer Games, has never won an Olympic medal. In 2008 in Beijing, she was the favorite to win gold in the 100 meter hurdles. She dominated the race, but tripped over the penultimate hurdle to finish in seventh place. Despite the heartbreaking loss, Jones has won over Madison Avenue. Her corporate sponsors include Asics athletic gear, Oakley eyewear, Procter Gamble consumer goods, and Red Bull, the high octane energy drinks company. In addition to being a talented athlete, Jones has a compelling life story she is the daughter of a single mother, and her father spent most of her childhood in state prison. She is personable and funny, not to mention 5 and beautiful. team in June her potential to attract even more sponsors will skyrocket. As the summer Games continue in London this week, corporate marketing departments and ad agencies are making a multitude of calculations about Jones and other hopefuls in an attempt to monetize the magic of the Olympics. A handful of companies, including Coca Cola, McDonald and Dow Chemical, have paid dearly to be official sponsors of the Games themselves. Most companies, however, forge marketing agreements with individual athletes or groups of athletes. These sponsorships tend to be cheaper, and they provide an opportunity for companies to link their brand with the personality and accomplishments of a particular Olympian. Olympics cultivate a particularly powerful feeling in us, says Americus Reed, a Wharton marketing professor. transcends any affiliation to a particular sport or event. It appeals to our sense of national pride. We connect with the athletes. There something about being the very best on the planet that speaks to us. These are not athletes who are making millions of dollars most of them, at least. They just like us: regular people with an Olympic dream. can understand why companies want to connect with that feeling, he adds. the question they need to address is: What is the purpose of sponsorship? The Olympics hold a special place in our global consciousness. The Games evoke our patriotism; they inspire us with tales of triumph over adversity. They expose us to new cultures and experiences. (How many times have you ever watched a canoe slalom race?) They excite us with perfect human specimens achieving things that have never been done before. And they get great ratings, too: The 2008 Beijing Olympics, for instance, drew an estimated global television audience of 4.7 billion over the 17 days of competition, according to Nielsen, the market research company. For advertisers, the Olympics represent an unmistakable opportunity. The precise cost of sponsoring the Olympic Games is a tightly guarded secret. But it is undoubtedly an expensive undertaking. According to various media reports, this year sponsors are thought to have paid some $100 million to the International Olympic Committee for a four year deal under which they are the only sponsors within their product category. This figure does not include the cost of participating at the Games or of promoting their sponsorship. Sponsorship enables companies to use the famed rainbow colored rings on their products and in their advertising. It a way for companies to bask in the glow of the prestige and excitement of the Games, says Andrew Brandt, sports business analyst for ESPN and a lecturer at Wharton who teaches sports law and negotiations. Olympics brand has great class and cachet. It is beyond any other sporting event. Companies want to be associated with those rings. But official Olympic sponsorship might not be the best use of a corporate marketing budget. It has found that while two out of three people say that Olympic sponsors are doing a good thing for the country, viewers seldom take notice of official supporters. The sponsorships of some companies are known by less than 10% of viewers. A salient example: Nike is the brand most associated with the 2012 Olympics, according to research by Jam, the digital marketing agency, but it is not an Olympic sponsor. A 1997 paper by Kathleen Anne Farrell at the University of Nebraska Lincoln and W. Treasury Department used stock return data to measure the value of sponsoring the 1996 Atlanta Summer Olympics. They found that the shareholders of nike shoes quality sponsoring firms earned negative average returns around the announcement of Olympic sponsorship agreements. There is an opportunity cost to sponsoring the Olympics, notes Wharton Reed. need to ask: Are there better ways to use our marketing resources other than putting the money into a sponsorship? while the immediate payoff of Olympic sponsorship may be elusive, in the long run, companies should see benefits, according to Ron Goodstein, a marketing professor at Georgetown University McDonough School of Business. of the event is purely equity building, he says. want customers to think, are good people; these are good companies. If companies think that sponsorship is going to get customers to purchase a product, they dreaming. It should be more about enhancing their image. for instance, BP, the oil company trying to burnish its reputation after its disastrous handling of the oil spill in the Gulf of Mexico. BP is an official London Olympic Partner. not to make you go buy gas from BP. It going to make you start to think that BP is doing things to make the world a better place, Goodstein notes. over time, sales might increase. of Champions Another way for companies to capitalize on the Games is by sponsoring a particular athlete, or group of athletes. Finding the right Olympic spokesperson is an easier feat for companies that have a native, natural connection to sports. For bathing suit and running shoe manufacturers, for example, the Olympic Games are an advertising bonanza. Other companies have to get creative. is where the fun part starts, says Goodstein. try to match their brands to the theme of the Olympics with commercials that blur the line between the program and the ad. If they match the theme, they keep the audience involved. The ad could be about an athlete or it could be about the Olympics bringing people together. what many companies have not paid enough attention to in the past is whether or not the ad and the athlete they feature match the product or service they are selling, he notes. it doesn fit, at the end of watching the ad, people feel duped. They feel like they been tricked into watching the ad, and the strategy backfires. is key. It makes sense, for instance, that Michael Phelps the gold medal swimmer who famously blasts loud hip hop music on his iPod before his races got a deal to pitch for a waterproof headphones company after the last summer Olympics. Chastain [the Olympic soccer player] is a great fit for PowerBar, but she has no particular fit for Gallery Furniture, and the effectiveness of her endorsement of that company is lower, says Goodstein. In choosing a spokesperson, companies look at the athlete name recognition, likability, image, personal story and sex appeal. are looking for a showman, notes Anthony Fernandez, a Florida based branding consultant who specializes in professional athletes. looking for someone who is passionate, who can entertain, who can bring folks to their feet. A lot comes down to personality. big factor: Companies want winners. about the Wheaties box, says David Reibstein, professor of marketing at Wharton. always the gold medal winner because Wheaties is breakfast of champions. It not the of champions and losers.' He adds that companies have an incentive to sign up athletes before they are winners. simply an economic thing. They cheaper before they win. There is a feeling of, sign them before their price goes up.' biggest draw for any company is a winning, attractive athlete. Maria Sharapova, the tennis player who was the first woman to car