It’s still possible to buy a Roots Poor Boy Olympic hat from the 1998 Nagano games on eBay. One previously worn example could recently be had for $25, which, if any bidder comes along to claim it, would be a pretty decent return on the original owner’s investment. I couldn’t say whether corporate sponsors feel the same way about their own ROI from the Nagano games. But to make the case for sponsoring London this summer, well, you really would have to be smoking something. Olympic sponsorship has never been so expensive, or worth so little.
Once upon a time, things were different. Consumers used to accept reflected glory as a sign of stature in a brand. Just to have your logo seen in the precincts of greatness gave it legitimacy. Furthermore, watching the Games was a tightly controlled, communal media experience—one you could enjoy only on the organizers’ terms. The athletes were as remote as gods, and audiences were rapt. That was probably worth paying a premium for.
Not anymore. Kodak’s famous ambush at the 1984 games in Los Angeles, in which it sponsored the U.S. track team and upstaged official Olympic sponsor Fuji, foreshadowed how hard it would soon be to own an Olympic audience. Meanwhile, even as those audiences have fractured and competitors have found ever-bolder ways to crash the party (see “How to brand-crash the Olympics,” page 18), the price of official sponsorship has only gone higher, faster, stronger.
Like all bubbles, this one is exhibiting the most ludicrous proportions just as it’s about to burst. From 1988 to 2012, the Olympic Partner program ballooned, seeing a tenfold increase in revenue, from $96 million for the Calgary and Seoul Games, to $957 million for Vancouver and London. It’s now so expensive that Visa, for example, has turned the London venue into a gated community for its payment products, as it tries to make some kind of justification for the program’s massive cost. Even the IOC can smell the coffee, deciding to write no new sponsorship deals past 2020 while it figures out how to continue extracting wealth from its own brand in the face of new realities. The IOC, at least, is not stupid enough to believe its own hype.
If marketers shook off the lust for corporate bragging rights and spiffy team wear, they would realize that whatever Olympic gold is left lies in the event’s massive television advertising audience (the Beijing Games were the most watched television event in history). Even this has become so expensive that there’s currently no Canadian bidder for the 2014 or 2016 broadcast rights. For most brands, it’s hard to see how sponsorship can ever be any more than a boardroom vanity. As is usually the case when fashion eclipses common sense, it’s expensive to be one of the cool kids—and almost inevitable that the investment will finally amount to little more than an embarrassing memory.
Bruce Philp is a brand strategy consultant and author of Consumer Republic, winner of the 2012 National Business Book Award.