Like that gadget you use as a phone, music player, web browser and camera?
For Olympic fundraisers, it’s a headache.
The dizzying pace of technological change is creating sticky issues for the International Olympic Committee. To put on the games, the IOC relies heavily on big money sponsors who are willing to shell out tens of millions of dollars because each is the only company making a certain type of product allowed to wrap itself in the Olympic rings.
Panasonic gets audio/video, Samsung gets wireless communication, Acer gets computers and so on up to 12 top-tier sponsors.
But when those companies sell devices that fit into all three categories, which one gets to advertise?
“So far we have managed to take care of this,” said Gerhard Heiberg, head of the IOC marketing commission. “But it’s difficult. You never know what will happen in four years’ time.”
The uncertainty could make it harder for the IOC to continue to forge massive contracts in the future.
The IOC’s 12 elite sponsors generated nearly $900 million from 2005-08, about 40 percent of its revenues. It’s hoping to surpass the $1 billion mark for the 2009-13 cycle that includes February’s Winter Games in Vancouver and the 2012 Summer Olympics in London. There are currently nine sponsors, and the IOC is hoping to add at least one more.
Panasonic and Samsung have deals through 2016, so the IOC has some stability in technological categories for now. And it’s hard to imagine sponsors such as Coca-Cola and McDonald’s being affected by the evolution of electronic devices.
Yet as companies carefully weigh how they spend every penny, they must consider whether they’ll be able to market all their key products under their Olympic contract. The length of each cycle adds to the uncertainty: Who can predict which devices will be popular by the time the 2012 London Games roll around?
“It’s not an easy task,” Gianpiero Morbello, vice president for marketing and branding for Acer, said of the IOC’s challenge. “The world is changing.”
Heiberg said the IOC has been able to work out sponsors’ questions, at least so far, through frequent negotiations.
Heiberg is confident that the discussions will continue to be amicable and productive. In a rapidly changing world, he won’t rule out major changes to the IOC’s sponsorship program, but doesn’t anticipate any soon.
Peter Graham, who studies Olympic marketing, said the IOC may want to consider going on a two-year cycle. That would allow for more flexibility to create new categories and tweak old ones as technology evolves, said Graham, the co-founder of the Sport and Entertainment Management program at the University of South Carolina.
