For sponsors, 2008 Olympics have already begun
Source: China Daily By GEOFFREY A. FOWLER and WENDY LEE (WSJ) Date: 2006-08-09
China's 2008 Olympics are set to open exactly two years from today, but advertisers have gotten a running start.
TV ads show Olympic hurdler Liu Xiang racing with kangaroos to pitch Visa cards to the nation's yuppies, who like their Australian vacations.
Viewers can also see Mr. Liu with a can of Coke, drinking Yili milk, wearing Nikes, and hawking China Mobile cellphone services in separate advertisements.
That the 23-year-old Mr. Liu already has marketing deals with Visa International Ltd., Coca-Cola Co., Yili Group and Nike Inc., plus several others, underscores both the allure and the challenge of advertising at the Games in Beijing.
China's market is so immense that the 2008 Games are drawing a larger-than-usual field of corporate competitors. The Olympics traditionally are home to one official brand of credit card, one computer, one wristwatch. But the 2008 Games already boast three official beers: Tsingtao, Yanjing and Budweiser.
"One beer cannot cover all China," says Liu Jun, deputy director of marketing of the Beijing Organizing Committee, or Bocog. He says China's huge number of beer drinkers and the fragmented market justified the sudsy trifecta. Each of the beer companies established a different target audience, Mr. Liu says.
"Our point of view is this is the first time that China will conduct the Olympics," says a Tsingtao representative. "We believe it is a great thing that many Chinese brands and businesses are able to participate."
By now it's a truism that China's economy is red-hot and boasts 1.3 billion consumers. Johnson & Johnson, never an Olympic sponsor before, has climbed on board as a partner in the 2008 Games. Sir Martin Sorrell, chief executive of marketing heavyweight WPP Group PLC, reckons that by the time the Games come along, China could be the world's second-largest advertising market, moving into the slot behind the U.S. and ahead of Japan. Sir Martin has said it is "difficult to think of any sporting or cultural event in the world that could be bigger."
But in some ways, it may be too big. Thirty-six companies have by now snapped up marketing rights to the 2008 Games, and Bocog is still at it, choosing a final round of suppliers. Already, travelers on Beijing's ring roads see the 2008 logo splashed across billboards for dozens of different companies. To launch its new Sagitar model, Volkswagen China Group, which coordinates the activities of Volkswagen AG and its two joint ventures in China, made a splash over several months by giving away a new Sagitar to every Chinese gold medalist at the Torino games this past winter in Italy.
"If anybody starts now, it's a bit too late," says Sheng Li, Visa's head of marketing in China, who began his Beijing Olympics campaigns in 2004.
Getting started isn't cheap. Beijing-specific partnerships in some categories have cost advertisers as much as the fees for multiple games. In the hotly contested car category, Volkswagen China Group eventually put in the winning bid of about $100 million in cash and kind, according to people familiar with the matter.
The group's director of Olympic marketing, Anthony Laver, estimates that in the 12 months before the Games begin, official sponsors will spend as much as $2 billion on advertising just in China.
The investments can be risky. In China, sports marketers can find the rug pulled out from under them. For example, the nation's "diving prince," Tian Liang, who won a gold and a bronze medal in Athens in 2004, was kicked off the Chinese national team after appearing in too many commercials. Advertisers that had hired him for his Olympic luster, including direct-sales company Amway Corp., were left in the cold, although the ousted star still did the ads.
Then there is the case of the omnipresent hurdler/hawker, Liu Xiang. When Mr. Liu recently broke the world record in a competition in Lausanne, Switzerland, Nike -- which is not an official sponsor of the Games -- made him a T-shirt featuring his 12.88-second time to wear as he stepped off the plane back home. Nike says it was one of the fastest campaigns it ever produced. Yet one of Mr. Liu's other sponsors, dairy brand Yili, soon launched its own campaigns touting the 12.88 figure.
Chinese consumers find all this confusing. A new survey released today by Chinese marketing consultancy R3 and research firm TNS found that, without prompting, Chinese consumers associated Mr. Liu with no fewer than 19 brands.
"Few companies are succeeding right now in building unique associations," says R3's principal, Greg Paull. There is "tremendous potential for star associations to be overcooked," he says.
Visa is dealing with Mr. Liu's overexposure partly by featuring him in unconventional settings, like with the Australian marsupials. In addition, since 2004, Visa has sponsored the low-key national women's field hockey team. Field hockey isn't a particularly popular sport among Chinese women, who shun the sun. The company's marketing manager, Mr. Li, says ads featuring the team, which came in fourth in the Athens Olympics, underscore Visa's commitment to sporting, not just celebrities.
International brands seem to be off to a slower start than their local rivals, although marketing experts disagree on exactly when and how brands should use their Olympic association. Eight of the top 10 brands that Chinese consumers associate with the Olympics are local, according to the R3 and TNS survey, even though only one of 11 world-wide IOC Olympic partners is Chinese.
Many of the Games' international sponsors, such as McDonald's Corp., have relied on their long-term associations with the Games to build goodwill. But Chinese media have been closed to foreign content for so long that few consumers here get the connection. In the survey, McDonald's ranked 27th among brands that Chinese people associate with the Olympic rings. The fast food giant came in right after Chinese textile maker Heng Yuan Xiang.
Donald Chan, the China national managing director of Publicis Groupe's Leo Burnett ad agency, is advising some of his clients, which include McDonald's, to start planning -- but wait on delivering ads until the second half of 2007. "Local brands are now trying to build a competitive presence against multinationals," he says. "But in terms of Olympic experiences, there is nothing going on right now. A lot of multinationals were using the World Cup to stay engaged instead."
The multinationals and Chinese brands may be on different schedules because they are looking for very different results from their expensive marketing rights. "The message for the multinationals is that we are here in China, and we are going to be part of this transformation that is taking place," says Scott Kronick, the president of WPP Group's Ogilvy PR agency in Beijing. "The message for local companies is that we are a famous Chinese company that has the potential to be a global brand."
And, of course, China's poor record with intellectual property rights has left some brands nervous about "ambush marketing," or fu ji shi ying xian, in which brands either steal the Olympics logo or find ways to work Olympic images into their ads. "It's a very tough job for Bocog. We must protect rights at the same time, so many companies in China want to be associated with us," says Bocog's Mr. Liu.
The group has already shut down some unauthorized use of its logo and is considering launching educational campaigns on state TV to inform the public about the phenomenon. The campaigns may even feature hurdler Liu Xiang.
