Let the Ad Race Begin : Stakes Are High as Sponsors Start Olympic-Size Campaign

Olympic athletes aren’t alone in their quest for the gold. Advertisers are going all out in a competition for viewers’ attention as the Olympic Games get underway in Atlanta today.

A total of 50 advertisers are prepared to strut their products before a huge audience during the 17-day event. The stakes are high. Advertisers paid an average of $500,000 for a 30-second spot in prime time, akin to what it costs to advertise during such top-rated shows as “ER” and “Seinfeld.”

A handful of companies, including McDonald’s, Coca-Cola, Reebok and Anheuser-Busch, have raised the stakes further, paying NBC millions more dollars for exclusive network advertising rights in order to prevent rivals from running national ads during Olympic telecasts.

It is all part of a costly effort to reach an average prime-time audience of 27 million, much of it pumped to watch not only the Olympic competition but the commercials. According to a survey by Eisner & Associates, a Baltimore advertising and public relations firm, 32% of people surveyed said they planned to watch all or most of the ads that air during the Olympics.

“That’s a very low level of channel surfing, especially for a sporting event,” said David Blum, strategic planner for Eisner & Associates. He said the typical TV viewer switches channels once every 18 minutes.

Marketers are taking pains to keep viewers tuned in. Unlike the Super Bowl, that king of sports advertising, the Olympics extends over two weeks. The challenge for Olympic advertisers is to keep viewers from being bored with commercials during the entire event.

Coca-Cola, the largest advertiser in the Olympics, plans to get around the problem by airing 100 different commercials one time each during the games. Though few of the spots are new, 10 of them have yet to air nationally. Coca-Cola is spending $62 million to air the commercials.

Delta Air Lines, which is spending $20 million on Olympic commercials, has come up with a series of 10 spots featuring British actor Nigel Havers of “Chariots of Fire” fame. In the so-called Delta Marathon, Havers travels the globe showcasing aspects of Delta’s service.

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Another advertiser, Frito-Lay, is airing a sequence of three commercials for its Rold Gold pretzels featuring “Seinfeld” actor Jason Alexander and U.S. Olympic basketball member Scottie Pippen. The spots chronicle Alexander’s improbable quest to play in the Olympics.

Reebok, too, is airing a mini-soap opera, with three spots on Dallas Cowboy running back Emmitt Smith’s farcical campaign to have football declared an Olympic sport.

“If sponsors are going to spend huge amounts of money, they have to pay attention to what they are doing, and have the commercials look good and do it right, or the investment isn’t there,” Blum said.

For companies that paid up to $40 million to become official Olympic sponsors, advertising in the games, though it involves additional spending, offers a last chance to boost recognition. In a June ESPN/Chilton poll, Coke had the highest recognition among consumers, with nearly 40% of them identifying it as an Olympic sponsor. McDonald’s ranked second, named as a sponsor by 23% of people surveyed.

Other sponsors lagged behind. AT&T; was identified as a sponsor by a little more than 10% of people surveyed. Just less than 5% of consumers identified Reebok as a sponsor and nearly 11% incorrectly named Nike as a backer of the Olympic Games. Pepsi was erroneously identified as a sponsor by 9% of consumers.

AT&T; advertising director Jim Speros isn’t fazed by the company’s poor showing. “It is a little early,” he said, noting the poll was conducted last month. “Consumers don’t get excited about the game until right before it starts. I am not surprised that 10% is where it is right now.”

Reebok took the confusion about Nike in stride.

“That is understandable. Nike has been at the sports game longer than we have but we are making tremendous progress,” said Reebok spokesman Dave Fogelson. “We are here [in Atlanta] to change that perception, but it doesn’t change overnight.”

The perception is less likely to change quickly given that Nike has purchased local commercial time in the Olympics, covering the 20 top markets, including Los Angeles. The athletic shoe company plans to air spots featuring several Olympic athletes, though it can’t mention the Olympic games.

In general, though, advertisers face less competition for attention than in past Olympics. One hundred thirty advertisers sponsored the telecast of the 1984 Los Angeles Games, more then double the number of sponsors for the Atlanta competition. What’s more, only nine minutes of national ads are being squeezed into prime time in the upcoming contest, compared with 10 minutes of ads in Barcelona, Spain, and 15 minutes in Seoul.

Nonetheless, some sponsors believe there are too many commercial messages during the telecast for advertisers to break through.

“There is a lot to be said for not advertising during the games,” said David D’Alessandro, senior executive vice president of John Hancock Mutual Life Insurance Co., an Olympic sponsor.

John Hancock purchased $15 million of commercial time in the Olympics, but in the future the firm may “pass it up entirely,” D’Alessandro said. John Hancock bought the time two years ago, he said, before Olympic organizers sold lower cost sponsorships to raise money, creating commercial clutter.

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“By the time the games come around and the networks and airwaves and publicity come over the transom, there is so much clutter that all of the new sponsors get lost and all of the old sponsors get lost,” D’Alessandro said.

The company is airing a 90-second inspirational spot it hopes will break through. It shows historic footage of such Olympic greats as Jesse Owens and Wilma Rudolph, while performer Judy Collins sings “Amazing Grace.” The spot ends with the message: “Everybody should have a dream.”

The telecast aside, John Hancock hasn’t soured on the Olympic sponsorship. The big insurance company used Olympic tickets as an incentive for its sales force, generating $50 million in additional premiums. D’Alessandro said that according to internal surveys, the number of people who say they would consider buying the company’s financial products has increased 20% since the company started promoting its connection to the Olympics.

“We’ve earned our investment back,” D’Alessandro said.

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What They’re Spending

Fifty advertisers are spending a total of about $690 million on the Olympic Games. Here’s a look at what the Top 10 are spending to tout their products in the games (in millions):

Coca-Cola: $60

General Motors: $52

Anheuser-Busch: $45

McDonald’s: $40

Visa: $30

UPS: $25

IBM: $25

MCI Communications: $25

Reebok: $25

Delta Air Lines: $20

AT&T;: $20

Isuzu: $20

Sources: Advertising Age, John Hancock