Since the games are now over, I thought it would be interesting to debate which of the Olympic sponsors came away with gold and which pulled a hamstring.

It is an important question, as Shaun Rein has pointed out on a couple of occasions, and for me it has been interesting process not only watching the games but keeping Shaun’s comments in the back of my head as I watch the games.

So, were I a judge, and I were judging who made out the best through these Olympics I would awarded the following metals:

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With firms spending 80-100 M USD to be sponsors of the Olympic Games, there are going to be questions.

What I have found interesting through my discussions around this topic, and through reading the perspective of others, is that it is all in the matter of context.  Whether firms were trying to use this as an opportunity to reach consumers in China (Adidas), trying sell industrial lighting products (GE), or were looking to launch their brand on a global basis (Lenovo).

It will of course take time for the final numbers to be realized, but through this report you can see that Adidas clearly is finding ways to leverage their sponsor status.. and that with 60% increase in sales, they already have some big ammunition to be used when defending their sponsorship.

One thing I noticed, and sparked some thinking, was that they have spent a lot of money on their workers through the dormitories, and the conditions (as far as I can see) are pretty good.  firms like these were already at a higher level, so I am wondering why the new labor law hit them as hard as we are lead to believe… need some time with this one

If you were to just read the popular press, it would be easy to laugh at the term “green Olympics”.  Journalists carrying hand meters taking air measurements, cyclists wearing face masks, and even air quality widgets all provide a bit of comedy to what is the serious conditions that their hyper development has created.

The problems though are much more complex that smog, will continue to be serious issues for the 1.3 billion residents of China, and while the government is taking “draconian measures”to reduce the air pollution, there are a lot of other issues to solve and programs/ technologies that are being put in place as part of this Olympics that will improve the quality of life for 20% of humanity.

Earth to Tech’s article 10 Cleantech Companies Greening the Olympics has stepped out of the smog box to look at 10 firms whose products are part of the larger “green Olympics”.

Ranging from LED lighting, clean water, energy management, and mass transit, the products and technologies highlighted will surely see a huge boost as they leverage the benefits of their programs to Beijing’s residents ongoing.

Looking back at Part 1 and Part 2 of this series, I think that we are seeing an excellent case study of research and analysis practices in China.

During my many conversations with firms entering China, or those looking to expand, there invariably is a question of how to measure the potential market of China. Of course there are 1.3 billion people in China, but every firm will have a different segment of that population which would offer the potential for a sale.

1) How much of Samsung’s growth was in consumer products (telephones) vs. industrial products (software)

Why this is important, is that industrial firms I have spoken with are doing very well already for reasons I covered in the part 2. typically less about branding, the industrial sponsors are able to walk into a second or third city and say:

• “it was our steel that built the birds nest” - deal for 1000 tons of steel for new soccer stadium inked
• “we put the lights into the water cube” - done deal for new street lighting in Suzhou
• “Our security systems are in the Beijing airport” - done, 120 airport deal

Additionally, the network that it took to get the steel into the Birds Nest would also be very valuable for introductions when other stadium projects come online

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Following my post earlier in the week Olympic Sponsorships (Part 1). What a Waste of Money, I wanted to follow up with a post that reflected some of the benefits of sponsoring the Beijing Olympics which have less than 48 hours before getting underway.

To recap, my original post was in response to - or was catalyzed by - Shaun Rein’s recent interview on the BBC. It is a topic I have spoken about with others, and as the sums of money that are being committed by sponsors are so enormous, it makes a lot of sense to study just how effective the dollars spent are.

One of the first showing of support for their sponsorship was the article Samsung Sees Big China Boost With Olympics in the WSJ about Samsung’s Olympic sponsorship, and what they believe it has brought them. As this is a subscription only article, I will simply post what I feel is the critical paragraph to this subject:

Mr. Park said the Olympics sponsorship has greatly increased Samsung’s profile in China. The Games have had “a relatively big impact on our business,”

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There is no hiding the fact that the Olympics has a large commercial element to it.  Media companies pay billions for exclusive broadcast rights, McDonald’s makes sure they have the only restaurants on the green, and athletes are all fully kitted up with the logo of the highest bidder.

It is fair to say that the firms who have “invested” billions should expect a return on their investment, and recently there have been a few commentaries that I not only found interesting because both are from credible sources.. but they are seemingly in direct conflict with each others.. and there are things about both that i will highlight that should be further explored.

In his article Beijing Olympic Sponsorship’s A Waste, Shaun Rein of China Market Research Group who recently presented his argument on Bloomberg (see clip below) believe that the hundreds of millions of dollars that firms like McDonald’s, Adidas, and Lenovo paid was a waste.

According to the article, CMR found the following key things (I have cherry picked):

Nearly 80% of those Chinese consumers we polled said they “did not care” who the official sponsors were and the vast majority “did not consider official Olympic sponsorship” when buying a product.

The vast majority of consumers we interviewed failed to identify the official sponsor when given several choices in nearly all product sponsorship categories, from beverages to credit cards to automobiles.

40% of respondents felt that Nike was the official Olympic sponsor, vs. 50% for the actual sponsor, Adidas, and 10% for Chinese brand Li Ning.

Only 10% of respondents for all categories said that they were “more likely” to buy a product if they knew the product was from an official Olympic sponsor. Price, safety of product, ease of purchase and style were all considered more important than Olympic sponsorship.

Rein’s explanation for his findings were best explained on a recent Bloomberg spot where he presented his findings:

1. The Government’s constant 10 year Olympic “go for the gold” message has dulled consumers
2. Ambush marketing (Li Ning sponsoring CCTV newscasters - DHL’s recent advert) has created confusion
3. Lack of creativity in marketing firms - lots of copying of advertisements and messages

When Rein first put out this article a few months ago, I found myself nodding and scratching my head at the same time.  there were things that I agreed with 100%, and things that I thought needed to either be sliced further, researched further, or followed up on after the games.

Note to readers: the comments in italics are those of Shaun himself who responded to an email on the issues.

First, Where I agree:

1. I would agree that firms the amount of money being spent is a phenominal amount and that it is important to research whether or not it is really effective
2. I would agree that there has been a real lack of creative marketing.  I recently saw some great UPS advertisements, but I cannot remember seeing a Lenovo or Adidas ad that directly linked themselves to to Olympics (Omega did a discovery piece that I thought was well done)
3. I would agree that sponsors have had to deal with their fair share of ambush marketing, and that has created confution (consider the DHL advert below and what UPS’s view of it is)
4. I would also agree that firms like McDonald’s and other consumer goods have already penetrated so far that their realistic gains in China are going to be marginal at best

Second, where this study needs some context:

• China is not the world, but the Olympics are global.  So, for a firm like Lenovo which is known not to make much money on shore, and who is looking to expand their offshore exposure as their IBM logo is about to disappear… their angle on the sponsorship may actually have nothing to do with increased sales in China.

• there is a real difference between consumer and industrial products, so it should be said that this study was only of consumer players.  In fact, if you speak to the major industrial sponsors, many will speak about the benefits of their sponsorship

YEs, our research was consumer focused.  I agree and have stated in interviews (often gets sliced out) that for companies like BHP Billipon and GE and B2B being the sponsor probably has made a lot of sense as they try to get contracts with the Government or get support. 

• This study was done before the real push to the Olympics was underway,  and it may be premature to say that there was no benefit as the prime time marketing has not taken place

Third, this study needs a follow up.  His idea to study this was a brilliant one, and I would love to see some addtional slices that measure how the constant global sport events plays a role.  It would also be interesting to measure consumers who have not seen or been to a McDonald’s to see what impact there is after the games.

If we have time and resources, I woul.d like to do a follow up study.  M guess is that the am ush marketing will have an affect…. we have not done antyhing scientific but in recent months we have heard more people thining Li Ning is an official spnosor for instance.

Tomorrow, I will post the counter arguement for sponsoring the Olympics using a recent WSJ article on Samsung and a few conversations with industrial firms as the basis.

Just a quick update that is being provided by Shanghai Daily and FT on Beijing’s plans to clear the air.

According to the article:

If the air quality for the next 48 hours is still unacceptable because of “extremely unfavorable weather conditions,” cars whose number plate’s last digit matches the last number of the date will also be banned, according to the Ministry of Environmental Protection.

Work on all the building sites will be suspended and the city will ban production at another 105 electronic, chemical, furniture and construction material factories during the Games.

In Tianjin, 56 coal-fired power plants will be affected by the plan. In Hebei 51 plants will be affected and small steel plants would have to cut production significantly.

So, for those of you who are in Tianjin or Hebei, and thought you were safe, you should look out the window, assess the smog levels, and make the necessary phone calls to suppliers and logistics providers.