Small Business Limps to Olympics as London Sets Ad Rules: Retail

Photographer: Dan Kitwood/Getty Images

Lord Sebastian Coe with a rail of the new London 2012 Olympic Games 'Games time' uniforms at a Uniform distribution and accreditation centre, UDAC, on April 27, 2012. Close

Lord Sebastian Coe with a rail of the new London 2012 Olympic Games 'Games time'... Read More

Close
Open
Photographer: Dan Kitwood/Getty Images

Lord Sebastian Coe with a rail of the new London 2012 Olympic Games 'Games time' uniforms at a Uniform distribution and accreditation centre, UDAC, on April 27, 2012.

London organizers and the International Olympic Committee are policing everything from dogs to body paint in an effort to protect their 53 sponsors and Olympic partners from unauthorized advertising.

Ad agencies say the move is to enforce the strictest rules they’ve seen for any event. London 2012 has raised about 1.4 billion pounds ($2.2 billion) from sponsors including Coca-Cola Co. (KO) and McDonald’s Corp. (MCD) Businesses that didn’t pay for sponsorships ranging from 5 million pounds to 100 million pounds, according to consulting firm Deloitte, are having a hard time finding ways to associate themselves with the Olympics without provoking officials.

Merely combining the words “games” or “2012” with other words including London, summer, sponsors, medals, gold, silver or bronze would breach the rules, which carry fines of as much as 20,000 pounds. Non-sponsors also can’t refer to athletic images, mottoes and logos, including the Olympic rings and mascots, said Adam Glass, a partner at U.K. law firm Davenport Lyons, who advises retailers on advertising around the Olympics.

“It’s quite draconian,” Glass said. “Someone running with the flame of the torch could fall on the wrong side of the law,” because it suggests a link with the Olympics, he said.

Usain Bolt

Some companies are finding smart ways to get around the rules. Virgin Media Inc., which competes with sponsor BT Group Plc, said April 25 that its campaign with Jamaican sprinter Usain Bolt helped it gain the most customers in two years. Marketing spending soared 49 percent for the ads, in which Bolt appears with Virgin founder Richard Branson sporting a goatee similar to Branson’s. Bolt, the Olympic 100-meter champion and world record holder, also bolstered sales at Puma SE, which competes with official sponsor Adidas AG (ADS) and makes 100 euro Usain Bolt running shoes.

Others are responding by building generic summer campaigns around Queen Elizabeth II’s Diamond Jubilee in June. More than 300 retailers from London’s West End shopping district met this week to get advice from lawyers on Olympic advertising and promotions they can offer.

Marks & Spencer Group Plc (MKS)’s television ad campaign “On your Marks for a summer to remember” features celebrity models including Twiggy enjoying an outdoor picnic. The U.K.’s largest clothing retailer is offering “patriotic homeware” such as a 15-pound Union Jack-printed cushion, a 29.50-pound two-tier cake stand and a red and blue beach towel with a British crown print.

‘Restrictive Area’

“The usage of Olympics in terms of logos et cetera is a very restricted area, and we’re not in that category, but we’ll certainly be part of the strong celebrations,” Marc Bolland, chief executive officer of Marks & Spencer, said this month.

Small businesses such as Caribbean Scene, with three restaurants near the cycling, boxing and aquatics venues in east London, do not have as many options. During the games, Patrick Marche won’t be allowed to hand out flyers opposite one restaurant because it borders on the 200-hectare Olympic Park. The city also planted 19 birch trees directly in front of the restaurant amid the area’s Olympic redesign, blocking a sign for the place. He says he’s not allowed to put up another one across the street.

“I call it limping to the Olympics,” said Marche, adding that he might put flyers in hotels, theaters and cinemas to reach visitors. “What they talked about was winning the Olympic bid based on diversity, support for the local area and support for the local businesses, but we’ve been shut out.”

Sponsors’ Investments

The London organizers say the rules are necessary.

“Without our sponsors the games simply wouldn’t happen,” the group said in a statement. “They provide funding, products, services and expertise to help us stage the games. We therefore protect their investment and prevent other organizations from making unauthorized associations with the games.”

About 250 enforcement officers will patrol the areas close to Olympic events to make sure groups that haven’t paid for a sponsorship don’t advertise. The rules cover everything from animals and body paint to ads that people carry and any display of a business’s name.

“It’s the first time I’ve seen any of the Olympics with such harsh rules,” Hot Cow Managing Director Sally Durcan said in an interview. “I can totally understand why they’re doing it. Sponsors have spent a lot of money to have the privilege of being associated with the Olympics.”

Ambush Marketing

The organizers are also trying to prevent so-called ambush and guerilla marketing campaigns like the one used by Dutch brewer Bavaria NV during the 2006 Soccer World Cup in Germany. Bavaria encouraged fans to wear “Leeuwenhosen,” orange lederhosen with a tail and the brewer’s logo on it. Orange is the official color of the Dutch team.

The Olympics were nearly bankrupt in the 1980s due to waning interest from sponsors, forcing governments to finance almost all costs and fighting unauthorized marketing is therefore crucial, said Michael Payne, who was the International Olympic Committee’s first marketing and broadcast-rights director from 1983 to 2004.

“If you are not supporting the games or the teams, why should you be allowed to benefit commercially from associating yourself?” Payne, who oversaw the development and implementation of the marketing programs for 15 Olympic Summer and Winter Games, said in an interview. “The rules are tough and deliberately so.”

In the Beijing Olympics in 2008, Speedo International Ltd.’s racing swimsuits were worn by several medal winners, resulting in the brand being identified as a sponsor by more than a third of the audience and cluttering the market, said Mark Evans, the managing director of London-based advertising firm Kommando.

Evans says while he advises clients to refrain from ambush marketing, local businesses still have the right to benefit from the Olympics.

“You’ve got to protect yourself from this sort of authoritarian legislation,” he said. “You only have to be a bit more imaginative about how you want to use the Olympics to your benefit.”

To contact the reporters on this story: Amy Thomson in London at athomson6@bloomberg.net Sarah Shannon in London at sshannon4@bloomberg.net.

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net Sara Marley at smarley1@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.