Eye on the Olympics : Sponsors Seeking More Bang for Their Bucks

In 1984, a young Wisconsin bobsledder asked Domino’s Pizza to sponsor his efforts in the Winter Olympics at Sarajevo, Yugoslavia.

Domino’s, looking for full value, agreed to give the athlete half the money up front. The rest would be paid only if he could get the company some exposure--no easy task since Olympic rules forbid the display of corporate trademarks in arenas or on athletes’ uniforms.

But the deal paid off when a prominent Sports Illustrated photograph of the figure-skating competition showed a big Domino’s logo in the background. The bobsledder and friends had smuggled a 10-foot banner into the arena and hoisted it at the critical moment.

Other companies are thinking like Domino’s this winter, unwilling to commit millions of dollars to Olympic sponsorship simply for the warm feeling that charity provides.

“Five or 10 years ago, sports sponsorship was a nice thing to do because maybe your CEO liked golf or something,” said Ed Slade, marketing director for Evian Waters of France, the U.S. subsidiary of the French bottled-water concern. “But today you’ve got to justify everything with sales results.”

Sponsorship also has become something of a zero-sum game this Olympic year because of the nagging recession, experts say. Rather than boost spending, companies are holding their sponsorship budgets level. The result: Whatever goes to the Olympics means less for tennis tournaments, road races or art shows.

“Everyone else in the sponsorship world gets nervous because so much money is siphoned off by the Olympics,” said Joyce Julius, whose Ann Arbor, Mich.-based consulting firm analyzes the exposure that sponsorship brings companies.

Olympic sponsorships vary widely in price. Top-level International Olympic Committee sponsorships range from about $10 million to $30 million. National sponsorships, through the U.S. Olympic Committee, cost from $1 million to $5 million.

IOC and USOC sponsors have exclusive rights to use the word Olympics and the game’s five-ring symbol in their advertising. Firms with smaller budgets are able to find cheaper exposure through the national governing bodies of individual teams--the route chosen by an advertiser calling itself, for example, “official sponsor of the U.S. Ski Team.”

It’s pricey, but as USOC Executive Committee member Anita DeFrantz puts it: “Inspiration is very hard to buy.”

And the initial outlay covers only the sponsorship itself. If you want the world to know about it, that’s extra. Richard Adler, vice president of ProServ, an Arlington, Va.-based sports management firm, tells clients to expect to pay twice as much promoting their sponsorship as they spend to obtain it.

“I don’t think the consumer cares if you’re the official lock of the Olympics or the official hammer,” said Will Hadlock of the Leo Burnett advertising agency in Chicago. “You’ve got to find a way to use it.”

The U.S. Postal Service, a first-time sponsor, has worked for three years to get the maximum bang for its Olympic dollar.

The Postal Service is nearing the climax of a three-year, $122-million campaign tied to the Olympics, which is designed to boost its parcel delivery business. It includes a multimillion-dollar advertising push, capped by the hard-sell “2-2-2” (“Two pounds! Two days! $2.95!”) television ad that has been everywhere lately.

A $10-million IOC sponsorship with a huge ancillary spending program is an unusual step for an outfit that reports to Congress. But Postmaster General Anthony Frank projects a $55-million profit by the end of the Summer Olympics, most of it from the sale of commemorative stamps.

“We don’t deal with imagery and warm fuzzies,” Frank said. “We’re in it for the same reason as other sponsors--pride and profit.”

Already, Frank can point to one tangible payoff: He credits the TV spot with boosting Postal Service priority mail revenue by 22% in the most recent accounting period.

Since free publicity can be even better than the purchased kind, sponsors have numerous strategies to attract attention:

* Bristol-Myers Products created the Nuprin Comeback Award to promote its analgesic brand. Clairol, another unit of Bristol-Myers Squibb Co., sponsors the Clairol Personal Best award.

* Evian invented the “Evian Peak Performance Team,” integrating such Olympic athletes as speed skater Bonnie Blair and figure skater Kristi Yamaguchi into advertising that tells how drinking water--especially Evian, of course--promotes good performance in all kinds of activities.

* Maxwell House, a unit of Kraft General Foods, set up a 900 number that allows callers to leave a message of support for the Olympic athlete of their choice. Callers also absorb a plug for Maxwell House coffee in the process. A portion of the proceeds goes to the U.S. Olympic Team.

Sometimes even non-sponsors try to catch a little of the Olympic glow. Federal Express was an international Olympic sponsor in 1988 but didn’t bid for the rings this time around, giving the Postal Service its opening.

Nevertheless, the Memphis-based shipper’s current television campaign seems designed to evoke Olympic impressions. The ads use sprinters at a track meet to convey Fed Ex’s speed in the longer-distance “dashes” of international delivery service.

There will be some familiar names at this year’s games. Coca-Cola is the world’s biggest Olympic sponsor in terms of overall spending and the number of countries in which it is a sponsor--154. Coke has been with the Olympics since 1928.

Despite the recession in much of the English-speaking world, some countries are doing well economically. So Coke’s overall campaign isn’t fundamentally different from previous ones, said Peter Sealey, senior vice president and director of global marketing.

For Coca-Cola, Sealey said, the Olympics is the only event that provides the same emotional punch in every corner of the globe. That’s an important consideration for a company that wants to deliver a uniform message worldwide.

True, Coca-Cola must re-evaluate its sponsorship each time an Olympic year approaches, but it isn’t a tough call. Sealey offered this analogy:

“I’ve been married for 25 years. I guess in a sense I have to make a decision every year whether to stay married, but it’s not something you have to think about much.”