brian_socolow_180x180In a few short weeks, the FIFA World Cup gets under way.  The month-long event features teams from 32 countries, meeting in 64 different matches in 12 cities across Brazil.  As the venues are making their final preparations, and the teams are making their final squad selections, fans from across the globe are gearing up for one of the most widely watched sporting events. According to FIFA’s estimates, more than 3.2 billion people watched some portion of the live broadcast coverage of the 2010 World Cup — nearly one billion watched the final between Spain and the Netherlands. Official sponsors like Adidas, Sony, Coca-Cola, Visa, McDonalds and Budweiser (among others) have paid enormous amounts of money in both sponsorship dollars and for their advertising campaigns for the right to be affiliated with the World Cup and the opportunity to get in front of its global audience. As the teams take to the fields and underdog clubs play fiercely to unseat the favored opponents for the chance at the championship cup, the battle between official sponsors and unaffiliated brands, so-called ambush marketers, will also heat up.

Ambush marketing has become expected, if not respected, as a (mostly) legitimate and (usually) amusing form of competitive marketing.  And despite – or perhaps even because of – the best efforts of event organizers to protect their sponsors with rules and regulations, and even laws and legal action against the offending marketers, the trend is likely to continue, as official sponsorships for high-visibility events (like the Olympics, the World Cup,  and the Tour de France, as well as action sports events like the X Games) become more and more expensive, while event coverage becomes continuously available and comprehensive, reaching a more global audience of viewers (and consumers) thorough both traditional broadcast and digital platforms.

An Ambush Marketing Primer

Ambush marketing generally refers to a brand trying to create or capitalize on an association with a well-known or high-visibility event without paying to be an official sponsor of that event. Sponsors pay enormous fees for the exclusive rights to use trademarks and other intellectual property, such as the Olympic rings or the World Cup Brasil logo, and to advertise their association with the event. Official sponsorship also affords these affiliated companies extensive branding and advertising opportunities related to an event, including advertising in a venue or along a race course, naming rights to tournaments or event locations, logos on team uniforms, exclusive supplier relationships, and merchandise tie-ins.

When other – unofficial and unaffiliated – brands try to claim a spot on this exclusive, high-rent territory, it’s not always illegal, but it does devalue the official sponsors’ investments and can damage the event organizer’s bargaining position for future events. It can also cost the ambush marketer in terms of fines, legal costs and  — increasingly rarely – reputational damage.  Most countries don’t have laws specifically restricting or prohibiting ambush marketing.  Trademark and unfair competition laws may provide some remedies to official sponsors or rights holders, in cases where unaffiliated marketers blatantly appropriate the protected intellectual property. More often, however, organizers like FIFA or the International Olympic Committee require jurisdictions to enact event-based legislation that addresses ambush marketing in order to be awarded  hosting rights. For example, Brazil enacted its General World Cup Law in June 2012 after being awarded the right to host the FIFA World Cup, and both the U.K. and Russia enacted legislation that included advertising regulations designed to prevent non-sponsors from capitalizing on the London and Sochi Games within the designated “event zone.”

Organizers, associations and sports leagues also have rules governing advertising by non-sponsor brands.  IOC Rule 50 , for example, restricts the display of logos of unaffiliated equipment and clothing brands to no more than 10 percent of the surface of the athletes gear, with an exception that the brand may continue the same logo placement that was generally used on retail products sold during the 12 months prior to the Games.  The somewhat controversial IOC Rule 40 prohibits athletes from allowing their names, likenesses or sports performances to be used for advertising purposes during a “blackout” period before, during and after the Olympic Games.  This prohibits endorsement sponsors of participating athletes from even running ads congratulating their athletes.  Other sports, leagues and events have similar rules about the display of non-sponsor logos on athletes’ clothing, footwear and equipment.

Of course, as not all ambush marketing is illegal, not all attempts to preserve the value of official sponsorships are punitive.  Glasgow 2014, the organizing body for 2014 Glasgow Commonwealth Games (an international, multi-sport event involving 71 teams of athletes from the Commonwealth of Nations that takes place every four years ), reached an agreement with the owners of all of the outdoor media venues throughout the city, including those outside the event zone, to give right of first refusal for the space to the games official sponsors or to the organizers of the Commonwealth Games, in order to “help promote the overall look and feel across the city and prevent ambush marketing before and during the Games.”

Direct and Indirect Ambush Marketing

The kind of ambush marketing a brand undertakes may determine both the impact  and the consequences.  So-called “predatory ambushing,” for example, is a form of direct ambushing in which non-sponsor brands make intentionally false claims of official sponsorship, intending to confuse consumers and take market share from the competing official sponsor. It may take the form of deliberate  (and illegal) trademark or likeness infringement, in which the ambushing brand intentionally uses protected intellectual property – the logos of event (the Olympic rings for example) or participating teams, or makes unauthorized references to specific contests, teams or athletes, as well as words and symbols related to the event.

Coattail ambushing is a more subtle form of direct ambush marketing in which the non-sponsoring brand is able to create a direct association with an event by playing up a legitimate connection, for example, using athletes with whom it has endorsement contracts in advertising before, during or after an event, or supplying athletes with branded clothing or equipment. While coattail marketing usually doesn’t violate intellectual property laws, it may run afoul of rules and regulations like IOC Rules 40 and 50. Done correctly – and carefully – however, coattail marketing can be a very effective ambush marketing technique.

Snowboard and clothing manufacturer Burton enjoyed great visibility and consumer brand association with the Sochi Games, despite being an unaffiliated company, by incorporating its brand and logo into the design of its snowboards. Because the board designs of the Olympic athletes used the Burton brand in the same way as boards available to retail consumers in the 12 months prior to the Olympic – stenciled in giant letters on the back of the boards using bright colors –  they did not violate Rule 50.  They did, however, showcase the Burton brand during just about every televised snowboard competition and medal ceremony.

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Because direct ambushing is more risky and can easily veer into illegal and ultimately costly territory for brands, much of the ambush marketing done today is indirect, including ambushing “by association,” using imagery or terminology that is not protected by intellectual property laws to create an association to a sporting event where no legitimate connection exists or – even more indirectly – using values-based marketing practices to appeal to the same values or involve the same themes as the event and its promotions. For example, lifestyle brand Red Bull is widely hailed as the champion and a master of this kind of marketing.  The brand has been able to create solid consumer associations with both the Sochi and London games even though it was an unaffiliated brand (and competitor to official sponsor Coca-Cola) by capitalizing on its existing strong affiliation with “extreme” sports,  like snowboarding, windsurfing, and kayaking.  In addition, Red Bull is strategically placed to take advantage of the growing popularity of extreme sports, as events like the X Games and individual sports like snowboarding become more mainstream — and therefore more widely televised (Red Bull was a global sponsor of the X Games).

 

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Advertising that references the event in indirect or generic terms, or that make a humorous reference to the brand’s inability to use official intellectual property or direct references, are also examples of ambushing by association.  In a rare twist on ambush by association, clothing brand American Apparel was able to parlay negative sentiment surrounding the 2014 Winter Games into an ambush marketing campaign.  As part of a protest against Russia’s anti-gay laws organized by several LGBT activist groups, the Los Angeles-based retailer (which is not an official Olympic sponsor) launched a clothing and merchandise line called Principle 6, based on the Olympic charter’s Principle 6, which declares: “Sport does not discriminate on grounds of race, religion, politics, gender or otherwise.” A number of athletes, including Olympic diving champion Greg Louganis,  as well as Sochi 2014 alpine skier Mike Janyk,  acted as ambassadors for the program.  Proceeds from the “Principle 6” line go to LGBT advocacy groups in Russia.  

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The concept known as insurgent ambushing attempts to take advantage of the positive attention of the public and fans on an event. It can include very in-your-face methods, including surprise “street style” promotions or blitz marketing, either at an event or near enough to it that the ambushing brand can reach fans and audience members. Insurgent ambushing attempts to capitalize – and perhaps even intrude – directly on the fans’ experience of attending the event. Examples include handing out freebies such as t-shirts, flags or caps near the event so that those inside a stadium are wearing or waving the logos of an ambush marketer.  At the 2010 World Cup, for example, Budweiser was the official beer, but a Dutch brewery hired 36 young women to sit in the stands during one of the big matches wearing bright orange miniskirts.   While the miniskirts bore no logos, orange was the corporate color of the Dutch brewery. While its unclear what law, if any, the brewery violated, FIFA, the overseeing body for international soccer, filed a civil case against the brewery, and criminal charges against two Dutch women who organized the stunt. FIFA later dropped the all of the suits.

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Serendipity – Ain’t So Bad

Occasionally, a brand stumbles into truly inadvertent – call it serendipitous – ambush marketing and, depending on the circumstances, can capitalize on serendipitous ambush marketing opportunities even in the face of rules and regulations to prevent them.  For example, during the build-up to the Sochi Games, Zippo, the lighter manufacturer, was able to leverage being at the right place at the right time, not just once, but twice.  While the Olympic torch was being paraded through Russia, its flame unexpectedly went out, extinguished by a gust of wind.   An onlooker stepped forward and re-lit it using his Zippo lighter.  The next day, Zippo posted a photo of the moment on its Facebook page and tweeted: “Zippo saves the Olympics!” 

The IOC came down hard on the Pennsylvania-based company for its attempt to tie itself to the Olympics.  Zippo removed the post, saying it did not intend to suggest any official association with the Olympics. The company then changed its Facebook page to say, “Zippo. Perfect for all winter games. Wink, wink.”   Both the original post and the modified Zippo statement are classic examples that show some key ingredients of ambush marketing by association: ingenuity; good timing; “light” robbery; and a healthy dose of humor.

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Consequences, Part I

Zippo’s ability to associate itself with the Sochi Olympics not once but twice without any major consequences illustrates the somewhat low barriers – and low risk – to many forms of ambush marketing.   In fact, as the Zippo, Burton and Starbucks examples all illustrate, the more stringent the attempts that organizers take to prevent ambush marketing, the more marketers take on the challenge of circumventing the rules and the more clever they become.  This often results in more positive media attention on the ambushing marketer – global media witnessing and reporting on Sochi officials taping over Apple’s logo on laptops and phones (Samsung is an official Olympic sponsor), and extreme sports-related brands Burton and Red Bull being hailed in media coverage as “medal winners” over official advertising sponsors are all great examples.  Efforts to combat ambush marketing can also backfire, causing negative publicity for the official sponsors, the organizer or both.

Ambush marketing – done strategically and done well – may not be cheap, but it’s not nearly as costly as an official sponsorship. McDonalds, a long-time sponsor of both the Olympics (30 years) and the World Cup (20 years), reportedly spent $200 million for an eight-year, four Olympics sponsorship package in order to be officially associated the Sochi Olympics.  Meanwhile, non-affiliate brand and fast food brand Subway – a direct competitor of McDonalds – was able to create a positive brand association with the Olympics through a series of ads using former Olympic athletes, including U.S. speed skater Apollo Ohno, as well as Australian snowboarder Torah Bright (in ads that ran up until the Rule 40 blackout period). The ads made no mention of  Sochi or the Olympics, and used none of the protected intellectual property of the Games.  This is not the first time that Subway has run campaigns designed to create an association with the Olympics.  In fact, Subway seems to be deliberately trying to build a positive reputation around its success as a skillful ambush marketer  able to skirt the line without crossing into illegal territory through its endorsement deals with a number of athletes – Famous Fans – including Ohno,  gold-medal gymnast Nastia Liukin, and U.S. swimmer Michael Phelps, among others.  The company, which markets itself as the healthy alternative to fast food, recently announced it had signed Brazilian soccer legend Pele to an endorsement deal, and plans to use the soccer icon in ads around the World Cup and the 2016 Summer Olympic Games.

While McDonalds and the IOC have both rattled their sabers repeatedly over Subway’s ambush marketing campaigns, nothing has come of it.  And nothing likely will, as long as Subway’s ads stay in the realm of indirect ambush marketing and in accordance with IOC  (and FIFA) rules.

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Consequences, Part II

One potential consequence of ambush marketing that may carry some weight are sanctions against the athlete endorsers by the event organizers based on existing league or organization rules.  But even these are not always effective in shutting down ambush marketing.  Often the consequences are worth it to both the athlete and the marketer – for example, when fines are assessed against the athlete that the marketer pays. Only where the rule jeopardizes the athlete’s participation does it appear to have much of an effect.  Violations of IOC Rule 40, for example, can result in the athlete being barred from competition – a consequence that no brand would want to cause its endorsers for a number of reasons.

New Trends

The escalating cost of official sponsorships has added fuel to the ambush marketing fire. In fact, ambush marketing is at its peak when then stakes are the highest – when the viewership is stratospheric (like the World Cup or the Olympics, for example) – and the cost of an official sponsorship is higher than – and possibly beyond the reach of many brands.  For smaller brands, some form of indirect ambush marketing may be the only choice they have to capitalize on a highly visible event.   In addition, while official sponsors are usually big national or global brands, the possible rewards of ambush marketing have attracted more big brands (Subway and Starbucks, for example) that see enormous upside potential and that don’t mind the relatively low financial and reputational risk.  In fact, the bigger the brand, the more likely they are to be able to get away with ambush marketing because they have the resources to do it and do it right, and ability to pay the legal bills and sanctions that might result.