Companies’ Olympic Dreams Are of Bringing Home Green
Olympic athletes aren’t alone in going for the gold. Advertisers are out to capture viewers’ attention as the Winter Games get underway in Nagano, Japan, today.
About 50 advertisers have plunked down huge sums to tout their products before a large and affluent television audience. They’ve paid up to $500,000 for a 30-second prime-time spot in the 17-day telecast, about what it costs to advertise in such top-rated shows as NBC’s “ER.”
A handful of advertisers, including Visa USA and Coca-Cola, have paid CBS many millions of dollars for exclusive network advertising rights in their product categories, thus preventing rivals from running national ads during the telecast.
“We want to prevent any kind of competitive activity,” said Liz Silver, advertising vice president for Visa USA, which in past Olympics has sparred with American Express.
Spending isn’t limited to the telecast. Eleven companies have paid $40 million to become worldwide Olympic sponsors, acquiring the right to use the Olympic rings in their advertising. Two worldwide sponsors, IBM and Kodak, have said that promotional spending around the Olympics will put a dent in first-quarter earnings.
“The Olympics give a company like ours global exposure--and there are relatively few events that do that,” said Kodak representative Paul C. Allen. “People will be watching this all over the world.”
And because of the location--deep in the heart of archrival Fuji Photo Film Co.’s backyard--”we are using this to get a good marketing push in a market that’s very important for us,” Allen said.
Advertisers are reaching out to an audience geared up to watch the events. The New York advertising agency Ogilvy & Mather said 78% of adults intend to watch at least some Olympic events. Many of those people plan to watch Olympics coverage at least four days out of each week the Games air.
“It won’t compare to Nancy Kerrigan versus Tonya Harding,” said Peter Chrisanthopolous, head of broadcast buying at Ogilvy & Mather, referring to the clash between the two American figure skaters in 1994. “But total viewership will still be at significant levels.”
Chrisanthopolous said consumers think highly of Olympic advertisers. He said 65% of adults view Olympic advertisers as industry leaders.
“There is a halo effect,” he said.
Despite such advantages, some advertisers balked at the high cost of advertising in the Games, one reason it took CBS until last week to sell out the telecast. McDonald’s, a worldwide sponsor, passed up a chance to buy exclusive advertising rights in the telecast due to price--a move that allowed rival Wendy’s International into the telecast.
“In the world today, with the high cost of sports media, we have to be very selective about what we do, even on a McDonald’s budget,” said Brad Ball, senior vice president of marketing at McDonald’s USA.
Ball said McDonald’s purchased one-third of the commercial time CBS allocated to the fast-food restaurant category. Though Ball and CBS declined to comment, sources said the category cost in excess of $100 million.
“We felt we could get the kind of exposure we needed for our [Big Mac] promotion without having to buy the entire package,” Ball said.
Advertisers are doing their best to keep viewers interested in their ads over the course of the games. Coca-Cola, one of the biggest advertisers in the Olympics, is running ads for Diet Coke in the form of two three-part serials.
John Hancock is running a 90-second epic in the opening and closing ceremonies showing footage from war-torn Sarajevo, scene of the 1984 Olympics. The spots ask for donations to the Sarajevo Olympic Children’s Fund.
For companies that spent $40 million to tie into the Olympics, the telecast offers a last chance to boost recognition. An ESPN/Chilton poll in December showed that Coke had the highest recognition among consumers age 12 and up, with 24.6% of them correctly identifying the company as an Olympic sponsor. McDonald’s ranked second, named by 17.3% of people surveyed.
Other companies lagged far behind. IBM, despite its massive spending on the computer system to run the games, was correctly identified by only 1.9% of consumers. And less than 1% of consumers correctly named John Hancock as a worldwide sponsor of the games.
Some Olympic sponsors are concerned that the telecast will heighten confusion on the part of consumers. That is because CBS is allowing some sponsors of the telecast to use the network’s Olympic logo in print advertising. The logo has the CBS insignia and the five Olympic rings.
One company that is using the CBS logo is John Hancock rival Northwestern Mutual Life. David D’Alessandro, president of John Hancock, said he complained to CBS about the tactic, to no avail.
“During the broadcast, there is so much clutter that consumers can’t tell who is an Olympic advertiser and who isn’t,” said D’Alessandro.
He said that telecast aside, the Olympics pays off in other ways, as tickets are used as incentives to salespeople and customers.
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* OLYMPICS ON ICE: West Coast will get “live” coverage of action--18 hours later. A1
Times staff writer Greg Johnson contributed to this report.
