LONDON: Up to $1 billion (€643.1m; £508.5m) in sponsorship expenditure could fail to deliver the return on investment hoped-for by Beijing Olympics marketers and sponsors, warns the Olympics Sponsorship Effectiveness Report recently released by London-headquartered Fournaise Marketing Group.
The upcoming spendfest in China is likely to be the most commercially supported Games of all time, with a record twelve worldwide and twenty-one local sponsors/partners predicted to spend over $2 billion in sponsorship and endorsement.
In addition, an estimated $5 billion will be spent on Olympics-related ads in the run-up to the event in August, with millions more in advertising revenue expected during the Games' sixteen-day tenure.
But, cautions the report, when it comes to delivering results Beijing 2008 could also set a record for the highest marketing sponsorship wastage since the resurrection of the Olympic movement in 1859.
Fournaise bases its pessimistic assessment on two main factors:
- Sponsorship and endorsement [in general] are respectively ranked by marketers in ninth and tenth positions in the firm's global Marketing Effectiveness Ranking.
- Four in every ten US dollars spent on marketing are believed to fail to deliver results according to China-based marketers surveyed by Fournaise for its 2007 Global Marketing Effectiveness Report.
Enlarging on this Marketing Wastage Rate
(MWR), Fournaise ceo Jerome Fontaine
reveals: "Out of the thousands of ads [we] have been measuring and auditing in China for our clients during the pre-Olympics build-up, a whopping 75% did not deliver the results expected by the marketers in charge and were way above the estimated 40% MWR in China.
"While the increase in spending is a goldmine for the traditional and online media industry, the apparent lack of results has already started to create boardroom battles between marketing and finance teams and is definitely putting more pressure on marketers to deliver hard, tangible results."
Says Fontaine: "To put the issues in context, we must go back to the most basic of questions: Why be an Olympic sponsor?
"Beijing 2008 is going to be the most brand-cluttered Games of all times. So relying on the traditionally media-heavy (and expensive) 'awareness-creativity-visibility' sponsorship model, and on the equally media-heavy 'high-profile athlete' endorsement strategy to stand out from the clutter – and get incremental customer demand – is going to be marketing suicide."
Fountaine concludes: "Behind closed boardroom doors, that [strategy] could lead to Olympics sponsorship budgets being cancelled and rerouted to maybe less flamboyant but more result-proven areas in the future."
Data sourced from multiple origins; additional content by WARC staff