Ambush Marketing — A Threat to Corporate Sponsorship

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Corporations concerned about the efficiency of traditional methods of marketing communications have adopted a range of alternative media to target audiences. One such medium is commercial sponsorship, which has grown significantly in recent years. By sponsoring an event or providing a budget for an event’s broadcast, a sponsor can generate audience awareness while simultaneously creating associations of the event’s values in people’s minds.

In this article, I focus on an increasingly prevalent corporate sponsorship practice in which a company, often an event sponsor’s competitor, attempts to deflect the audience’s attention to itself and away from the sponsor. This practice, known as “ambush” or “parasitic” marketing, simultaneously reduces the effectiveness of the sponsor’s message while undermining the quality and value of the sponsorship opportunity that the event owner is selling. As such, it may seriously inhibit the further growth of corporate sponsorship. Here I seek to warn sponsors of the potential threat to their sponsorship investments, outline the nature of ambushing and its strategies, and discuss the ethical perspectives related to ambush marketing and possible strategies and responses that a corporate sponsor might consider.

The Development of Commercial Sponsorship

Commercial sponsorship for marketing purposes developed only during the past twenty-five years. Sponsorship’s ability to transcend language and cultural barriers makes it an attractive global marketing option. In 1970, sponsorship expenditure in the United Kingdom was only £4 million, but, by 1994, an estimated £450 million was spent on sponsorship.1 In the United States, market sponsorship expenditure grew from $850 million in 1985 to a projected 1996 expenditure of $5.4 billion.2

The worldwide sponsorship market grew from an estimated $2 billion in 1984 to $13.02 billion in 1994.3 The key markets of Europe and the United States dominate the industry worldwide, valued in 1994 at $4.28 billion and $4.25 billion or 32.9 percent and 32.6 percent of worldwide expenditure respectively.4 Continued strong growth in this medium is forecast. These estimates of sponsorship expenditure include only the direct costs of securing the sponsorship rights. Expenditures to leverage or promote these rights must be at least equal to the direct costs, and many major sponsors invest several times the direct cost to exploit their initial investment.

Sponsored Events as Promotional Opportunities
While sponsorship is a highly flexible medium providing access to various audiences such as internal staff, business decision makers, government regulators, and consumers, most corporate sponsors seek to communicate with the latter. Companies use sponsorship to fulfill the primary marketing communications objectives of creating brand awareness and enhancing image, although they sometimes explicitly seek and achieve bottom-line sales results.5

Sponsoring an event simultaneously attracts and provides access to an audience. It differs from conventional advertising in that both message and medium are inextricably linked. The event generates the audience while concurrently sending a message to that audience about the event’s values.

For example, some three million fans attended the 1994 Soccer World Cup games in the United States, while the entire event had a gross cumulative audience of 32 billion television viewers.6 And, in the cases of Cornhill Insurance and cricket, Compaq and tennis, and Mastercard and the 1994 Soccer World Cup, sponsors created awareness through the attention that the events gained.7

Each sponsorship property or vehicle has certain associated images in the consumer’s mind that transfer to the sponsor. Barclays Bank found that it became associated with patriotic, adventurous, and modern values as a result of its sponsorship of the English Football League in the late 1980s and early 1990s.8 Similarly, Philips International BV discovered that Philips Hi-Fi brand imagery improved on the dimensions of sound quality, design, and sophistication of technical features due to its sponsorship of the rock band Dire Straits in 1985 and 1986.9

The Vexing Question of Sponsorship Rights
A sponsorship contract involves a commercial transaction to transfer defined rights, either exclusively or jointly, to a purchaser. As in any contract, the vendor’s ownership of the rights, the freedom to transfer these rights, and the ability to effect the transfer may all be at issue. In a typical sponsorship package, the sponsor may buy various rights including event title or category rights (e.g., official soft drink), signage rights, rights to specific designated emblems and logos, rights to use the word “official,” rights to specific event advertising, promotions, and publication inclusions, and certain first-option rights. The specific rights vary according to the size and nature of the event and the specifics of the contract. In major global events, the rights issue is often complex. However, the myriad of rights can be broadly delineated along two basic dimensions: (1) international or national and (2) controlled by event owner or not controlled by event owner.

For a major international event such as the Olympic Games or the World Cup in soccer, the sponsorship property rights can be sold at an international or national level. For example, in the case of the Olympic Games, the rights hierarchy is: The Olympic program (TOP), Olympic Games Organizing Committees (OGOCs, Lillehammer and Atlanta), National Olympic Committees (NOCs), and the National Governing Bodies (NGBs). This arrangement permits the sale of sponsorship rights by different bodies at different levels. At an international level, the Olympic Games are sold on a global basis under TOP; however, each NGB such as the U.S. track and field or gymnastics team also owns and sells various sponsorship rights on the national level.10 Similarly, the 1994 Soccer World Cup had eleven official sponsors and eight marketing partners for a global sponsorship program, while individual national soccer associations sold other levels of sponsorship. In one market alone, the local soccer authorities had two major sponsors, ten niche sponsors, and thirty-four marketing partners. The event owners may not directly control various other rights surrounding an event but may be able to have influence in some instances such as media sponsorship, especially broadcast sponsorship.

While events differ in size, the example of the 1994 Soccer World Cup illustrates the range of sponsorship opportunities that major events provide (see Table 1). In many instances, a sponsor can be involved at several levels simultaneously, as in the case of a global sponsor that seeks local exploitation via “themed” advertising and local promotions. An inevitable consequence of the different levels of property rights is conflict between competing sponsors that may each have legitimately paid for particular rights.

During the 1992 Olympic Games, Eastman Kodakwas an official Olympic sponsor, while Fuji mounted an advertising campaign based on its sponsorship of the U.S. track and field team.11 Similarly, Chrysler was the official car sponsor of the U.S. Olympic Committee, while Subaru sponsored the U.S. ski team and Ford was an official sponsor of the CBS broadcast.12 In the United States, Coors is the broadcast sponsor of the National Football League (NFL) Super Bowl, Miller is the official beer of the Super Bowl (with links to individual teams), while Budweiser is the official beer of the NFL.13 This testifies to the corporate belief in the potency and value of sponsorship, but clutter and conflict among sponsors are the inevitable outcomes of the proliferation of sponsorship opportunities and are perhaps some of the medium’s biggest challenges. This situation contrasts starkly with the early days of sponsorship, when, for example, Gillette was the sole sponsor of the World Basketball Series from 1949 to 1962.14

The Olympic Games as Sponsorship Phenomenon
As the world’s largest sporting event, the Olympic Games provide an interesting example of sponsorship. The first modern games in 1896 were largely funded byprivate donations (67 percent), with the balance coming from stamps (22 percent) and tickets, coins, and medals (11 percent). There were 60,000 ticket sales for the 1896 event.

It is estimated that the Atlanta Games will have generated 11 million ticket sales and an estimated total (unduplicated) broadcast audience of 4 billion, with total revenues for the 1993 to 1996 Olympiads expected to be $2.6 billion.15 Of total revenue, the International Olympic Committee (IOC) distributed 93 percent to the organizing committees (in Lillehammer and Atlanta), the various NOCs, and the International Sports Federations. The revenue sources contrast starkly with the 1896 games. Television rights (48 percent), sponsorship (34 percent), tickets (10 percent), licensing (4 percent), and coins (4 percent) are current sources of revenue, with the sponsorship of events and sponsorship-driven television rights providing the bulk of funding.16

As a sponsorship property, the Olympic Games can fulfill a variety of corporate objectives. They provide access to the Olympic logo of interlocking rings, which research suggests is the world’s most recognized symbol.17 Sponsors can achieve brand awareness through access to a unique global audience while simultaneously conferring on associated sponsor brands a range of highly beneficial images. Recent research in the UnitedStates, United Kingdom, and Spain showed that people considered Olympic sponsors to be modern, innovative, and leaders in their fields while socially responsive and dedicated to excellence.18 As an individual sponsor, John Hancock Mutual Life Insurance found that its brand equity among twenty-five- to sixty-four-year-old adults increased significantly after its involvement in the 1994 Lillehammer Winter Games. On the dimensions of being “successful,” “vitaland energetic,” and “dedicated to excellence,” John Hancock’s brand equity increased by 71 percent, 60 percent, and 36 percent respectively.19 Sales benefits also ensued for Coca-Cola, which expected to sell 20 million eight-ounce servings at the Atlanta Games, while Visa’s research has shown a 21 percent increase in card usage during Olympic promotions.20 In effect, the Olympic Games represent a major global brand with highly recognized symbols (interlocking rings, Olympic torch) and high levels of association with specific brand values. In a sponsorship arrangement, there is an intended transfer of Olympic brand values to the sponsoring brand.

Sponsorship property rights agreements for the Olympics are complex. In organizing the recent Olympic Games, the IOC appointed the host cities and negotiated particular arrangements with the organizing committees for both Lillehammer and Atlanta. It sold the broadcast rights for the Games to seventeen broadcasters and broadcast consortia around the world, the largest being NBC and the European Broadcasting Union (EBU). The IOC works through and substantially funds each of the NOCs and the International Sports Federations for both the summer and winter games.

The IOC, working with the Atlanta Organizing Committee, appointed ten TOP III global sponsors including Coca-Cola, Visa, Kodak, Rank Xerox, and IBM. It also signed ten national sponsors as marketing partners, including McDonald’s, AT&T, Motorola, Anheuser-Busch, and Delta Airlines. For each national level, there are national sponsors through each NOC andthe twenty-six Sports Federations. In local markets, individual sports stars may also receive sponsorship funding, which is separate from their Olympic commitment.

A vast multilevel, multinational conglomeration oforganizations, all either participating in IOC packages of rights or independently offering access to specificrights, may impinge on the Olympics. The management challenge is to structure this complex array of organizations into a coherent whole that simultaneously ensures commitment to common Olympic goals while funding the movement at its various levels.21

What Is Ambush Marketing?

By purchasing sponsorship, a sponsor seeks to attract the attention that an event generates to its own product. In a typical sponsorship arrangement, a sponsor purchases the sponsorship property rights and does further promotion to draw attention to itself. In “ambush marketing,” another company, often a competitor, intrudes, thereby deflecting attention to itself and away from the sponsor. The term was initially coined to describe the activities of a company that associated itself with an event without paying the requisite fee to the event owner.22McKelvey describes it as “a company’s intentional effort to weaken or ambush its competitor’s official sponsorship. It does this by engaging in promotions or advertising that trade off the eventor property’s goodwill and reputation, and that seek to confuse the buying public as to which company really holds official sponsorship rights.”23

An ambush marketer can associate with a major event without large-scale investment in securing rights and thereby fulfill brand awareness and image objectives at low cost — benefits usually available only to the official sponsor. It also generates goodwill, which is a consumer’s natural reaction to support for an activity of which he or she approves. At the very least, it creates consumer confusion, thereby denying the legitimate sponsor clear recognition for its sponsorship role. The net effect is that the official sponsor may derive considerably less benefit from its involvement.

Originally, many cases of ambush marketing arose because opportunistic competitors exploited the lack of agreement internally between different levels of major sporting organizations and externally with broadcasters and licensees. Indeed, some early instances, once seen as ambushing, are now recognized as legitimate sponsorship opportunities, such as contributions to a team squad in soccer and rugby. More recently, major eventowners have become gamekeepers by preventing potential ambush opportunities through contractual agreements with various interested parties, thereby enabling exclusive sponsorship packages and first-option rights.

Common Ambush Strategies

Ambushing refers to a continuum of situations, with varying extents of legal and ethical infringement.Several common ambush strategies are:

1. Sponsor media coverage of an event. The so-called “ambusher” sponsors certain media coverage of an event and gains access to the media audience, usually much larger than the on-site audience; this exploits a perfectly legitimate sponsorship opportunity. The Fuji versus Kodak case in the 1984 Los Angeles Olympics is perhaps the most celebrated legal ambush. While Fuji was a worldwide sponsor of the Olympics, its competitor, Kodak, became “sponsor” of ABC television’s broadcasts of the games and the “official film”supplier to the U.S. track team.24

2. Sponsor a subcategory within an event and exploit the investment aggressively. The ambusher contracts to sponsor some lesser category within the overall event at an obviously reduced investment cost and proceeds to exploit this association with large-scale promotions. During the 1988 Olympic Games, in a rerun of the 1984 conflict, Kodak was the official worldwide sponsor, but Fuji mounted a counter campaign, deciding that its “investment would be betterspent as a sponsor of the U.S. swimming team.” Its strategy enabled Fuji to associate with the Olympics at reduced cost.25 The global practice of such an ambush strategy requires considerable organizational and financial investment.

3. Make a sponsorship-related contribution to the“Players’ Pool.” Sports athletes, increasingly aware of their powerful bargaining position, also seek to sells pecific sponsorship rights. In the case of team sports, corporations can sponsor the team or squad by contributing to the “Players’ Pool”; such revenues are distributed to team or squad members. An ambusher capitalizes on property rights, which players and teams are free to sell. The sponsor contributes to the players’ pool and uses the platform provided to achieve its promotion objectives. While this practice was at one time viewed as sabotage of the event sponsor, it is now regarded as legitimate, particularly as the ground rules on the payment of athletes have changed.

4. Plan advertising that coincides with the sponsored event. The ambusher can implement advertising that is timed to coincide with the sponsor’s event. The legality and ethical basis of this approach depends on specific strategy, which may include —

Themed advertising. One themed advertising approach benefits the celebrity rather than the Olympic Federation. During the 1992 Winter Olympic Games, Wendy’s restaurant chain contracted with Olympic gold medal figure skater Kristi Yamaguchi to feature in its advertising, while McDonald’s was official sponsor of the U.S. team’s involvement in the Olympic Games. In another approach, the ambusher gives the impression of association yet makes no payment to either the governing federation, the Players’ Pool, or individual celebrities. It implies association with the event by using televised footage and images (e.g., sneakers, footballs, rackets, and so on) related to the sport.

Traditional advertising. An ambusher may respond head on to a sponsor’s activity with traditional advertising and promotion. Both companies employ legitimate but different approaches to compete for overall “share of voice”; such activity is not construed as unethical. If, however, the competitor seeks to purchase advertising media time in the slots around television relays of the event that a competitor is sponsoring, the move might be considered an ambush. Some ambushers used this practice successfully in the past, but it is less prevalent now because broadcasters in many countries will either offer the sponsor a first option to purchase available slots or refuse to allow directly competing advertising in slots around televised events.26

5. Develop imaginative ambush strategies. Many ambushers have created highly imaginative strategies to associate with particular events. For example, Seagram’s “developed a program to ‘Send the Families’ of the U.S. Olympic athletes to the 1988 Seoul Olympics, which involved no payment to the Olympic Committee.”27 Foster’s campaign during the 1991 Rugby World Cup in Britain was similarly creative; while Steinlager, abrewing company, was an official worldwide sponsorof the event, its competitor, Foster’s, ran an ad campaign around the theme “Swing Low, Sweet Carry-out” in the United Kingdom. (“Swing Low, Sweet Chariot”is the anthem of the English Rugby team that was afinalist in that tournament.)

Sporting goods companies’ marketing campaign shave aggressively competitive strategies for majorevents. Reebok was an official uniform supplier to the U.S. team at the Barcelona Olympic Games; the agreement required that Reebok apparel be worn at theopening and medal awards ceremonies. However, Nike managed to conclude a deal for the uniform rights for the U.S. track and field team, so this team wore Nike competition apparel during the Games.28

The Effectiveness of Ambush Marketing

There are some indications of ambush marketing’s effectiveness, although evidence is limited. For instance, the 1990 Soccer World Cup had twelve official world-wide sponsors, including companies such as Coca-Cola and Mars. In the United Kingdom, a local electric utility, National Power, was the sponsor of the Independent Television (ITV) network’s coverage. Despite having less coverage than the event sponsors in the U.K. market (some matches were relayed by other networks), “only two of the ten main sponsors . . . achieved any recognition by the U.K. population, with National Power outperforming the other eight.”29

Performance Research Inc. studies of the 1992 Olympic Games showed that many nonsponsors that aired commercials during Olympic broadcasts in theU.S. market created the impression of Olympic involvement. Using association with the event as a success indicator, we can determine that many nonsponsors such as Federal Express, Folger’s, Sears, and Tylenol outperformed the official sponsors in the relevant categories (see Table 2).30

During the 1992 Olympics, Wendy’s ads that featured skater Kristi Yamaguchi were also highly effective. In a survey by Performance Research Inc., 57 percent of respondents incorrectly identified Wendy’s(the ambusher) as the official fast-food sponsor, while only 37 percent of respondents correctly identified McDonald’s (the sponsor). A similar finding emerged from a Kinney and McDaniel study that showed that Wendy’s outperformed McDonald’s in terms of attitude toward the advertisement and attitude toward the brand in an experiment conducted in conjunction with the 1992 Olympics.31 In the credit card category,however, Kinney and McDaniel’s results indicated thatofficial sponsor Visa outperformed American Expresson the dimensions of attitude toward the advertisement and attitude toward the brand. The results in Table 2 also show that official sponsor Visa out performed American Express on brand awareness.

DDB Needham research showed that 41 percentof softdrink users who were NFL fans incorrectly identified Pepsi as the official soft drink of the NFL, and 38 percent correctly identified Coke as official sponsor in this category.32Similarly, 43 percent of U.S. beer drinkers who were National Basketball Association fans incorrectly believed Bud Light to be the official NBA sponsor against 38 percent who correctly identified Miller Lite as the official sponsor.33

However, the results of more generalized research indicated that when a sponsorship program is properly exploited, the chances of successful ambushing areeffectively minimized. Shani and Sandler research on the 1990 Winter Olympic Games found that if sponsors, when threatened by an ambush, exploited their sponsorship involvement, they performed significantly better than those that failed to adequately support their initial investment.34

A Threat to Corporate Sponsorship

Event owners and corporate sponsors regard ambush marketing as an unethical practice.35Owners claim that it threatens an event’s integrity. The marketing director of the IOC suggested that “ambush marketing is not a game. It is a deadly serious business and onethat has the potential to destroy sponsorship. If ambush marketing … is left unchecked, then the fundamental revenue base of sport will be undermined. If sport and other sponsored organizations do not learn to properly protect their rights and the exclusivity of their right sand the exclusivity of their sponsors, then they will lose their independent financial revenue source.”36

Corporate sponsors see ambush marketing as a threat to the expected value of the sponsorship package that they have purchased. It also allows the ambusher to ingratiate itself with the consumer beneficially. Asone corporate sponsor suggested, “Ambush marketing implies a connection to an event for which you have not compensated the owner. There’s another word forit: stealing.”37

On the other hand, ambushers argue that their actions are perfectly legal and ethical within the framework of normal business. Jerry C. Welsh, former head of worldwide marketing at American Express and a proponent of ambushing, suggests that “there is a weak-minded view that competitors have a moral obligation to step back and allow an official sponsor to reap all the benefits from a special event.” This spokesman suggests that competitors have “not only a right, but an obligation to shareholders to take advantage of such events.” Elsewhere, he suggests that “all this talk about unethical ambushing is so much intellectual rubbish and posturing by people who are sloppy marketers.”38

Ethical Perspectives in Ambush Marketing
Ambush marketing thus raises both legal and ethical issues. If we regard the practice as unethical, againstwhat benchmarks can we make such a judgment? First, we need to clarify certain issues.

Ambush marketing is not a discrete activity; it involves a broad range of activities, bounded by legal and illegal and ethical and unethical parameters. Perceptions of ambush marketing change over time; many former perceived transgressions are now seen as legitimate sponsorship opportunities. Truly global sporting events are bound to expose conflicting perspectives, even among western societies, as to what is legal and ethical. This is particularly true in areas such as exclusivity, monopoly, regulation of markets, and restraint ontrade; the entitlements of brand builders; and claims by shareholders and stakeholders.

Frequently, an alleged ambusher is a legitimate purchaser of rights and does nothing illegal, provided itdoes not use trademarks and symbols illegally. Major event owners seek to control or minimize potential conflict for their sponsors by striking agreements with broadcasting partners and other sports organizations, thereby offering exclusivity and first-option contracts. The challenge that major event owners such as the IOC face, for instance, is to secure such rights vertically and prevent potential ambushers from exploiting otherwise legitimate sponsorship opportunities.

In some instances, it may not be possible to secure exclusive agreements. For example, there are several competing beer brands sponsoring individual teams in the English Premier Football League sponsored by Carling Lager. Indeed, even where agreements exist, difficulties can arise. The recent case of the Dallas Cowboys and the NFL in the U.S. market is an example. While the NFL, as event owner, has a sponsorship agreement with Coca-Cola, the owner of the Dallas Cowboys has signed a pouring-rights deal with Pepsi for the Texas stadium, resulting in litigation between NFL Properties and the Dallas Cowboys.39

When an ambusher that has not bought specific rights gives the impression that it is involved in an event, the ethics question arises. In such instances, the ambusher deliberately associates with and exploits an event’s spirit without breaching the letter of the law. Themed advertising, with such images as snow and downhill skiing, suggests involvement with the Winter Olympics. In such instances, the ambusher may claim that it has a moral duty to use such opportunities to pursue corporate business objectives, and, in doing so, it relies on universal principles regarding fair business practices and its duty to stockholders to justify its actions. It may claim that, without ambushing, it is otherwise denied the right to participate in an important promotional opportunity due to the inability to meet the cost of official sponsorship and further that their duty to stockholders demands that ambushing activity be undertaken. Such arguments can be traced back to Kantian moral theory, which relies on universal standards of goodness and the motivation to fulfill one’s duties and obligations. He “maintained that moral action must be motivated by obligation alone” and “that all persons must act not only in accordance with obligation, but for the sake of obligation.”40

Other moral theorists would disagree. For instance, utilitarian theories come down in favor of the greatest good for the greatest number. Laczniak and Murphystate, “In an organizational context, utilitarianism basically states that a decision concerning corporate conduct is proper if and only if that decision produces the greatest good for the greatest number of individuals. Good is usually defined as net benefits that accrue to the parties affected by choice.”41 Thus, from an ethical perspective, the ambusher that gives the impression of involvement without payment is merely serving itsown narrow self-interest and, in doing so, engages in behavior that is harmful to the greater good of sport.

A rights view of fair business practice might suggestthat the sale of one’s property should result in the economic benefit going to the owner or seller. Similarly, the sponsor as buyer should reap the rewards of its investment and be protected in so doing. The moral title to rights for sale is also a matter for discussion. The IOC could argue that it has invested in building a major global brand with specific associations vested in both its marks and emblems. It could further claim to have created a reservoir of goodwill and that it is entitled to brand protection for its symbols. Stakeholders (e.g., fans) might also ask if a community does not have rights of access and information and if the Olympic spirit is not ultimately an inalienable part of our collective heritage.
These are complex ethical issues in an area with diametrically contrasting perspectives and varying rights claimed by shareholders and stakeholders. Such considerations are valuable for judging issues on a case-by-case basis.

Strategies to Counter Ambushing

Event owners and corporate communications managers who are aware of potential ambush strategies canact preemptively to protect their investments. The IOC has a cutting-edge anti-ambush program and, since 1984, has introduced measures to protect its position.42 In doing so, the IOC has minimized the effects of certain ambush strategies. Its measures revolve around prevention and publicity and the creation of TOP, which combines the rights to all the different elements of the Olympics into one central exclusive marketing package for global sponsors.

Since 1988, the IOC has required the creation of a single marketing program in the host country, which combines both the Games and national team rights. It further requires that the key marks, emblems, and designations must be protected through legal registration. The IOC also requires any city bidding for the Games to protect all the Olympic marks through specific legislation as a condition of being awarded the Games. The IOC has also introduced special “ambush marketing hit squads” to monitor all venues and police infringements and has coordinated with the host city authorities to control billboards and the skies above Olympic cities. In a further countermeasure,IOC-broadcaster agreements stipulate that the official sponsor has the first option for all broadcast and advertising rights for the event in each territory in which broadcast rights are sold.

When an ambush has definitely occurred (as distinct from normal competition), the IOC contacts the ambusher and may take subsequent legal action. It may also threaten negative publicity. The organizers ofthe 1996 Atlanta Olympic Games prepared contingency advertising that featured the sponsor as hero, while simultaneously labeling the ambusher as villain. Another advertising campaign included the comment, “Company X is intentionally misleading the American public.” A full-time sponsor protection unit of thirty people monitored potential ambush activity at the Atlanta Games. Overall, the Atlanta organizers took precautions to ensure an ambush-free event.43

A corporate sponsor must press an event owner to police events and be prepared to sponsor both the event and its broadcast. In the United Kingdom, Heineken Lager was both an event sponsor and the sponsor of ITV’s coverage of the 1995 Rugby WorldCup. Experienced sponsors anticipate competitive promotions and establish what specific rights to bestow under the terms of the sponsorship contract. This prevents a “Trojan horse ambush” in which a joint sponsor exceeds permitted rights.44

Because an event owner does not own all promotional opportunities, it is necessary to identify all other potential avenues for competitive promotion and, where economically feasible, close them off. For example, Visa arranged to become the official credit card of the city of Atlanta.45 Under this arrangement, other credit card companies were precluded from diminishing the exclusivity of Visa’s sponsorship.

Experienced and expert sponsors know that sponsorship must be leveraged. As a marketing spokesman forAnheuser-Busch suggested, “Ambushes will happen, and it’s your own fault if you don’t come through loud and clear that you’re a sponsor.”46 Indeed, there is considerable research to support the belief that proper sponsorship exploitation minimizes the effects of ambushing.47 Coca-Cola’s investment gives some idea of the scale of requisite investment required. Along with its TOP sponsorship fee of $40 million for global Olympic sponsorship in 1996, Coca-Cola spent a further $200 million inthe U.S. market to exploit its involvement, including $30 million on an attraction near Olympic Park, $25 million on corporate hospitality, and $60 million on prepurchased television spots around the Games.48

Ultimately, corporate managers have recourse in the law if the rights they have bought are infringed upon.49 Many sponsors and event owners resort to legal action to protect their particular rights, e.g., Visa and the IOC versus American Express in France in1992; Coca-Cola and the National Hockey Leagueversus Pepsi in Canada in 1992; and Mastercard versus Sprint Communications in the United States in 1994.50 In many cases, the alleged victims of ambushing — the sponsor or event owner — may not have a specific legal remedy, so many disputes are settled out of court. The sophistication of the ambusher’s strategy may allow it to skirt direct legal transgression orcertain suggestions of association, such as background images in advertising, the use of certain words such as “games,” “finals,” and so on.

While an alert official sponsor can attempt to close off possible ambush routes, hermetically sealing off all potential competitive ploys is both expensive and impossible and may itself raise legal and ethical issues. For example, Coca-Cola, a key Olympic sponsor in 1992 “paid the IOC $33 million for worldwide sponsorship, bought some $40 million worth of media on NBC’s Olympic broadcast, and spent several million dollars more to lock up twenty-two U.S. NGBs.”51 Pepsi, through its relationship with Michael Jordan ofthe U.S. Olympic basketball team, was able to run acampaign featuring Jordan before and during the Olympic period. This strategy outraged Coca-Cola, which complained to the U.S. Olympic Committee. However, Pepsi denied the charges of ambushing, claiming that the Olympic Games were not the appropriate vehicle to reach its target market and asserting its right to free speech.52

Conclusion

As the importance of major sporting, cultural, and artistic events has increased, so too has the role of sponsorship as a way to gain consumers’ attention. Linked to the development of sponsorship has been the growth of ambush marketing. As major world events such as the Olympic Games, the European Soccer Championship, and the Soccer World Cup intrude on our consciousness, the gamekeeper-versus-poacher struggles of event owners and official sponsors on the one hand and ambushers on the otherwill continue unabated.

Topics

References

1. D. Buckley, “Who Pays the Piper?,” Practice Review, Spring 1980, pp. 10–14; and

Special Report on Sponsorship (London: Mintel, 1994).

2. International Event Group Inc., “North American Sponsorship Spending to Top $5 Billion in 1996” (Chicago, Illinois: IEG, 15 January 1996, press release).

3. Sponsorship Research International, Annual Estimates of Sponsorship Expenditure (London: SRI, 1994).

4. Ibid.

5. T. Meenaghan, “The Role of Sponsorship in the Marketing Communications Mix,” International Journal of Advertising, volume 10, 1991, pp. 35–48.

6. A. Hitchen, “Sponsorship Research — Improving the Sporting Chances of Success” (Brussels, Belgium: Sponsorship Europe ’95 Conference, 6–7 April 1995, paper).

7. F. Dinmore, “Cricket Sponsorship,” The Business Graduate, Autumn 1980, pp. 68–72;

D. Beauvois, “How Does Sponsorship Fit in the Business-to-Business Marketing Communications Mix with the Compaq Grand Slam Cup as Case” (Barcelona, Spain: Sponsorship Europe ’91 Conference, 23–25 October 1991, paper);

R. Jones, “Mastercard Welcoming the World to the U.S.: A Case Study of the World Cup Sponsorship” (Brussels, Belgium: Sponsorship Europe ’95, 6–7 April 1995, paper).

8. M. Jones and T. Dearsley, “Understanding Sponsorship” (Turin, Italy: ESOMAR Seminar on “How to Increase the Efficiency of Marketing Communications in a Changing Europe,” 11–3 October 1989, paper).

9. F. Kohl and T. Otker, “Sponsorship — Some Practical Experiences in Philips Consumer Electronics” (Milan, Italy: ESOMAR Seminar on Below-the-Line and Sponsoring: The Use of Promotion and Sponsorship in the Marketing Mix, 6–8 November 1985, proceedings), pp. 104–141.

10. M. Hiestand, “Ambush Marketing Becomes an Olympic Event,” Adweek, 17 November 1987, pp. 2–4.

11. M. Grimm, “Official Sponsors Who Pay Millions See Ambush Marketing as Ring Dings,” Adweek, 29 June 1992, pp. 12–13.

12. J. Lipman, “Olympics Ambush Strategies Spur Debate,” Wall Street Journal, 7 February 1992, pp. B8.

13. “Super-Ambush: Bud versus Miller, Pepsi versus Coke at Twin Cities Game,” IEG Sponsorship Report (Chicago, Illinois: International Event Group, December 1992), pp. 1, 6.

14. J.P. Lamie, “Creating Value: How Gillette Leverages Sponsorship to Impact Its Sales Force, the Trade, and Consumers” (Chicago, Illinois: International Event Group Conference, 26–29 March 1995, paper).

15. International Olympic Committee, “100 Years of the Olympic Movement,” Marketing Matters, Summer 1994, pp. 1–6.

16. International Olympic Committee, Olympic Marketing Fact File (Lausanne, Switzerland: IOC Marketing Department, 1995).

17. International Olympic Committee, “Olympic Rings: The World’s Most Recognized Symbol,” Marketing Matters, 1995, pp. 9–11.

18. International Olympic Committee, “Sponsors Provide Technical Support and Other Benefits,” Marketing Matters, Summer 1993, pp. 3–5.

19. International Olympic Committee, “Top Sponsors Activate Their Olympic Investment,”Marketing Matters, Spring 1995, pp. 1–9.

20. Ibid.

21. A possible conceptual framework for considering the interorganizational relationship between event owner and sponsor is provided by transaction cost economies. See:

O.E. Williamson, “Economics and Organization: A Primer,” California Management Review, volume 38, Winter 1996, pp. 131–146;

P.S. Ring and A.H. Van de Ven, “Structuring Co-Operative Relationships between Organizations,” Strategic Management Journal, volume 13, 1992, pp. 483–498;

M. Sako, Prices, Quality, and Trust: Inter-Firm Relations in Britain and Japan (Cambridge: Cambridge University Press, 1992);

O.E. Williamson, The Economic Institutions of Capitalism: Firms, Markets, and Relational Contracting (New York: Free Press, 1985); and

S.C Frey, Jr. and M.M Schlosser, “ABB and Ford: Creating Value through Cooperation,” Sloan Management Review, volume 35, Fall 1993, pp. 65–72.

The concepts of power, mutual dependency, expectations, risk, trust, and collaboration as well as the basic mechanisms of contractual agreements and market forces impact on the governance of this relationship. Two particular behavioral characteristics postulated by Williamson are highly appropriate: bounded rationality, which is the inability of economic actors to write contracts that cover all possible contingencies, and opportunism, which Williamson saw as the rational pursuit by economic actors of their own advantage, with every means at their disposal, including guile. See:

O.E. Williamson, Markets and Hierarchies: Analysis and Antitrust Implications (New York: Free Press, 1975).

There may be a need to go beyond transaction cost economics with its primary focus on dyadic relationships in that a variety of economic actors are involved, either directly or indirectly, in decisions regarding the sponsorship of major events. In the case of the Olympic Games, these will include the Olympic movement at all its various levels, broadcasters, sponsors, licensees, and not least the athletes and the sporting audiences. In such circumstances, management theory in the form of the network perspective and the interorganizational relationship literature is highly relevant to discussions on issues of contracts, cooperation, conflict, and control between economic actors. See:

H. Hakansson, ed., Internal Marketing and Purchasing of Industrial Goods — An Interaction Approach (New York: Wiley, 1982);

P.W. Turnbull and J.P. Valla, eds., Strategies for International Industrial Marketing (London: Croom-Helm, 1986);

H. Hakansson and G. Snehota, Developing Relationships in Business Networks (London: Routledge, 1995); and

J.B. Heide and G. John, “Alliances in Industrial Purchasing: The Determinants of Joint Action in Buyer-Supplier Relationships,” Journal of Marketing Research, volume 27, February 1990, pp. 24–36.

22. D.M Sandler and D. Shani, “Olympic Sponsorship vs. ‘Ambush Marketing’: Who Gets the Gold?,” Journal of Advertising Research, volume 29, August–September 1989, pp. 9–14;

D. Shani and D.M. Sandler, “Sponsorship — An Empirical Investigation of Consumer Attitudes” (Monte Carlo, Monaco: ESOMAR Sponsorship Research Seminar in conjunction with Sponsorship Europe ’92, 2–4 December 1992, paper);

S. McKelvey, “Sans Legal Restraint, No Stopping Brash, Creative Ambush Marketers,” Brandweek, volume 35, 18 April 1994, p. 20; and

J.M. Curl and J. Durham, “New Issues in Ambush Marketing and Anti-Ambush Strategies” (Chicago, Illinois: International Event Group Conference, 26–29 March 1995, paper).

23. McKelvey (1994), p. 20.

24. R. Fannin, “Gold Rings or Smoke Rings?,” Marketing and Media Decisions, volume 23, September 1988, pp. 64–70.

25. Ibid., p. 66; and

A. Bayless, “Ambush Marketing Is Becoming Popular Event at Olympic Games,” Wall Street Journal, 8 February 1988, pp. B1.

26. “The IOC Police,” Advertising Age, volume 65, 28 February 1994, p. 24.

27. M. Hunt, “Sponsorship on a Small Budget” (London: Strategic Sponsorship Conference on Successful Sponsorship Strategy, Solutions, and Creativity, 13–14 February 1991, paper).

28. C.A Galford, “Sponsorship and Ambushers: Is There Any Protection?” (Barcelona, Spain: Sponsorship Europe ’91 Conference, 23–25 October 1991, paper).

29. K. Parker, “Sponsorship — The Research Contribution,” in Managing Commercial Sponsorship, special edition, T. Meenaghan, ed., European Journal of Marketing, volume 25, 1991, p. 28.

30. Performance Research Inc., Olympic Sponsorship Study (Newport, Rhode Island: Performance Research Inc., 1992);

M. Turner, “Circle the Rings, Ambush Ads Hit,” The Atlanta Journal/ The Atlanta Constitution, 3 March 1992, p. A6; and

R.L. Flanagan, “A Study of Corporate Sponsors and the Feasibility of an Ambush-Free Olympic Games in Atlanta” (Columbia, South Carolina: University of South Carolina, unpublished dissertation, 1993).

31. “Wendy’s Ambush of McDonald’s Snatched Away ‘Official’ Glow,” Sports Marketing Letter, volume 6, March 1994, p. 1;

L. Kinney and S.R. McDaniel, “Strategic Implications of Attitude towards the Ad in Leveraging Event Sponsorship” (Norfolk, Virginia: American Academy of Advertising Conference, 23–27 March 1995, paper).

32. J. Crimmins, “Sponsorship — Management Ego Trip or Marketing Savvy” (Brussels, Belgium: Sponsorship Europe ’95 Conference, 6–7 April 1995, paper).

33. Ibid.

34. Shani and Sandler (1992).

35. T. Meenaghan, “Ambush Marketing: Immoral or Imaginative Practice,” Journal of Advertising Research, volume 34, September–October 1994, pp. 77–88.

36. M.R. Payne, “A Talk by IOC Market Chief Michael R. Payne,” The Sport Marketing Letter, January 1993, p. 4.

37. B. Ettorre, “Ambush Marketing: Heading Them Off at the Pass,” Management Review, volume 82, March 1993, p. 55.

38. Bayless (1988), p. B1; and

G. Brewer, “Be Like Nike?,” Sales and Marketing Management, volume 145, 11 September 1993, p. 68.

39. R. Waddell, “Cowboys Rewriting NFL Revenue Rules?,” Amusement Business, 1 September 1995, pp. 22, 36;

J. Jensen, “Breaking Ranks in the NFL,” Advertising Age, 13 November 1995, pp. 1, 4;

J. Jensen, “Jones Fails to Snare More NFL Renegades,” Advertising Age, volume 66, 25 September 1995, pp. 3, 8.

40. T.L Beauchamp and N.E Bowie, eds., Ethical Theory and Business (Englewood Cliffs, New Jersey: Prentice Hall, 1993), p. 30.

41. G.R. Laczniak and P.E. Murphy, Ethical Marketing Decisions —The Higher Road (Boston: Allyn & Bacon, 1993), p. 30.

42. M.R. Payne, “Ambush Marketing: Immoral or Imaginative Practice (Barcelona, Spain: Sponsorship Europe ’91 Conference, 23–25 October 1991, paper); see also:

Payne (1993), pp. 4, 5.s2.

43. D. Greising, “Let the Hype Begin,” Business Week, 2 February 1995, pp. 117–118;

A. Shell, “Ambush Marketers Will Win No Medals,” Public Relations Journal, volume 50, January 1994, p. 11;

Greising (1995); and

M. Grimm, “Panasonic Pays up to Elude Sony Ambush,” Adweek, volume 34, 9 August 1993, p. 10.

44. Curl and Durham (1995).

45. L. Bayor, “Atlanta’s Card Games,” Advertising Age, volume 64, 18 January 18 1993, pp. 1, 53.

46. J. Jensen, “Sponsors Tiff Socks World Cup,” Advertising Age, volume 65, 14 March 1994, p. 3.

47. Sandler and Shani (1989);

Shani and Sandler (1992);

Parker (1991); and

Performance Research Incorporated (1992).

48. Greising (1995), pp. 117–118.

49. S. Townley, Ambush/Parasitic Marketing and Sport (London: Professional Direction Ltd., 1992).

50. Ettorre (1993), pp. 53–57;

McKelvey (1994), p. 20;

R. Grover, “The World Cup of ‘Ambush Marketing,’” Business Week, 2 May 1994, p. 37.

51. Grimm (1992), p. 16.

52. H. Slingsby and S. Macdonald, “Olympic Pillage?,” Marketing Week, 24 July 1992, pp. 22–25; and

N. Fielding and L. Black, “Ambush at Barcelona,” The Independent on Sunday, 19 July 1992, p. 6.

Reprint #:

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Insights Success
"Hilarious post! on "Ambush Marketing"
In Ambush marketing, creative minds usually target competitors’ ads slogans to craft their marketing strategy. Subtle references, sly jokes, are part of ambush marketing campaign. This form of marketing is not new.