Growth | July 2016 | By Nicole Duncan

Viva Rio?

Long a marketing platform for only a select few in the foodservice industry, the Olympics are evolving—and so are the tactics to capitalize on them.
The Olympics present opportunities, challenges for more brands.
The 2012 Summer Olympics in London closed with a spectacle that included handing the reins to Rio de Janeiro for this year’s games. flickr / cloudzilla

Say what you will about Americans’ relative indifference to international sports, but the excitement ahead of the Olympic Summer Games, held this year in Rio de Janeiro, Brazil, is palpable. The 2012 London Olympics were the most watched television event in U.S. history, with 219.4 million viewers. The 2008 Beijing and 1996 Atlanta games took the second and third places, respectively.

There’s no doubt that, with billions of eyeballs watching the games globally and millions in the U.S., the Olympics represent a rare opportunity for partner brands to gain valuable exposure. But Olympics promotion has diversified over the years, and the opportunities available to brands in leveraging the Games are varied.

Here’s a look at how food brands are gearing up for this year’s Olympic Games.

The evolution of big sponsorship

For decades, the Olympics have tightly controlled those brands that can formally ride the Games’ coattails as event sponsors.

But the upcoming Rio Olympics are changing the advertising landscape. Under new International Olympic Committee (IOC) rules, companies not affiliated with the Olympics or sponsors can apply for special waivers, allowing them to run ads featuring Olympic athletes without paying the sponsorship premium. Technology has also changed the game. Compared with the London Olympics only four years ago, the world has become even more connected, with mobile activation playing a key role in any successful campaign.

Given these changes, even long-established Olympic sponsors have been forced to evolve to reach consumers and stay relevant. McDonald’s will mark 40 years of Olympic involvement at the 2016 Rio Games. For the first 20 years, the burger giant was a U.S. Olympic Committee (USOC) sponsor, but, beginning with the Atlanta Olympics in 1996, McDonald’s moved to the top slot as an international sponsor. As with all long-term partnerships, both parties have changed and adapted over the decades.

“Obviously, our business has changed, the Olympics has changed, the world has changed in those 40 years,” says John Lewicki, who heads the sports marketing group at McDonald’s and has been involved with the brand’s Olympic involvement for 20 years. “We are actually now a sponsor of every [National Olympic Committee] in the 120 countries that we do business in, so we can leverage that activity on an ongoing basis.”

Lewicki says that in the early years, when McDonald’s was exclusively a U.S. sponsor, it focused more heavily on promotions and in-store activities. Now,

as its reach has broadened, so has its approach. On the ground, McDonald’s will serve athletes, media, and spectators in Brazil with specials unique to the host country, like pão de queijo (small, baked cheese balls).

On the global scale, the brand is less concerned with limited-time offers and new menu items. Instead, McDonald’s is hoping to engage its customers the world over by turning the spotlight on its core values.

“Family business is a very important part of our business. We’re a family brand, and kids have always been at the center of who we are as a brand,” Lewicki says. “The Millennial audience is growing up, and they’re having kids. … We’re wanting to make sure that we continue to hit the core values of the Olympics as they match up to us but also are relevant to today’s consumers.”

Since the Beijing Olympics in 2008, McDonald’s has sent children from its markets around the world to the Olympics. It has also extended a similar program to its partnership with FIFA, the international soccer federation. During the most recent World Cup two years ago, 1,408 children descended on Brazil to serve as “player escorts.” Before the start of each game, children paired with players and accompanied them onto the field.

This participatory approach, also known as experiential marketing, is gaining in popularity by inviting audiences to take part in brand experiences.

David Berkowitz, principal of the consultancy Serial Marketer, thinks the Olympics offer a one-of-a-kind way for brands to engage with their consumers. He also recently penned the VentureBeat article “7 Ways Brands Will Get Attention at the 2016 Olympics,” which details possible opportunities for exposure during the games.

“Most marketers will focus on everyone watching at home, because that’s where the scale is. But any marketer deeply involved with the Olympic Games will do well to try to stand out with the passionate group of consumers, as well as athletes at the game,” Berkowitz says via email. “Experiential marketing is so hot right now.”

In Rio, the McDonald’s Olympic Kids Program will up the ante once again with 100 children from around the world not only attending the event, but also participating in the opening ceremony. (At press time, Lewicki says McDonald’s and the IOC are still working out the logistics of this event.)

“I like the fact that they have this international sponsorship with the Olympic platform, and they’ve carved out this youth focus,” says William Chipps, senior editor of the Sponsorship Report for consulting firm IEG. “Even though it’s warm and fuzzy, I think it resonates with a lot of people around the world.”

Chipps adds that it would be difficult for any brand to make food promotions or specials the crux of a global campaign. “Every company wants to sell product and is using sponsorship to some extent to drive those sells,” he says. “Sometimes there is a food component to sponsorship activation, but generally speaking, most campaigns are larger than that.”

A youth focus and this Olympics’ theme of friendship are universal touchstones, and Lewicki notes that new IOC president Thomas Bach has also been championing youth. Under Bach’s leadership, the IOC has begun working with UNESCO and various governments to prioritize physical activity for children.

It’s all about the experience

McDonald’s emphasis on families and global friendship might not be revolutionary, but the platforms through which it and other sponsors are reaching their consumer base are. The mobile technology advances between the 2008 and 2012 summer games were colossal, and this year looks to continue that sharp upward curve.

“2016 versus 2012—that’s multiple lifetimes in the world of technology. Mobile-related activation platforms will be a really key driver here, because digital activation is so hot nowadays,” Chipps says. He adds that “proximity marketing” has become a buzzword in the sporting event space. Through this technology, which involves beacons or geo-fences, special content and promotions are funneled into a mobile app when its owner passes within a certain distance.

“If I’m walking by a statue of a great athlete or a great coach and there’s a beacon there, the beacon would identify my presence and send me some information about the history of that coach and their legacy. Or if I’m in a venue and I walk by a car display, the beacon could hypothetically detect my presence and send me a message with more information on a specific car and maybe a link to a local dealership,” Chipps adds.

While the IOC has not indicated whether any of the Rio venues will feature this technology, Chipps says it is becoming more commonplace and almost expected of sports venues. Retrofitting older arenas can be costly, so he predicts the prevalence of proximity marketing will grow as new facilities and build-outs are constructed.

Similarly, Berkowitz sees potential for tech-savvy brands during the Games, but he also recognizes certain obstacles.

“It’s so tough for the tech employed at the Olympics or other tent-pole events such as the World Cup to be so far ahead of the curve. Part of the reason is that marketers plan for such events so early,” he says. “If you have a 162-game baseball season, you have half a year to tinker with the experience and upgrade it. Here you have four years—or two, with the Winter Games—and brands investing so heavily in the games won’t be leaving much to chance at the last minute.”

For its part, McDonald’s will expand its engagement beyond viewership and utilize new tech platforms. Lewicki says that while the Olympics certainly garner large audiences, the experience has gone beyond just viewership.

“People are watching and also have one or two other screens open while they’re watching the games and interacting with friends or others. We certainly anticipate that that will continue and proliferate,” Lewicki says. “A lot of the programs we’re doing around the world to select the children who will participate are being driven by social media and different programs through that.”

He adds that many countries used social media as a way to select participants for the Olympic Kids Program. For example, in Japan, participants entered through a video contest on Instagram. Lewicki says McDonald’s plans to take these creative engagements and bring them to consumers.

A wider playing field

New technology might increase the number of channels for engagement, but it also ups the ante to deliver engaging, brand-specific content. And soon, the advertising arena could expand to include other non-sponsor contenders.

Last year the IOC updated Rule 40, which addresses Olympic athletes’ partnerships with companies. Before, brands could not feature athletes in advertising campaigns unless they were official sponsors. Under the new regulations, brands can apply for special waivers to allow for certain exemptions. Given the amounts sponsors funnel into the Olympics, the IOC will still mandate certain restrictions on these non-sponsors.

One early applicant was Gatorade, a subsidiary of PepsiCo. Rival Coca-Cola has been an official sponsor for years, and, like Pepsi, it has its own sports drink subsidiary, Powerade. While Gatorade will likely have to follow certain guidelines to not impose on Coca-Cola’s exclusivity with the Games, the opportunity dovetails with the brand’s existing marketing strategy.

“We actually authentically activate a number of our roster athletes—Olympians or not—every summer in our creative. [The] Rule 40 exemption allows us to continue doing so this year, but would be no different from other years when we activate advertising during the summer months,” writes Katie Vidaillet, senior manager of communications and public relations for Gatorade, in an email.

For smaller brands, neither sponsorship nor exemption is a viable option because of cost. Still, it doesn’t preclude them from catching some business on the Olympics’ momentum.

Giraffas Brazilian Grill has a home-court advantage. With more than 400 stores in Brazil, the brand expanded to the U.S. in 2010 and now has six locations in South Florida and two in Orlando. Given its smaller presence stateside, Giraffas is opting for a simple strategy, like a special Olympics menu featuring appetizer and beer deals.

“I did see that most of the games for Brazil and the U.S. are during happy hour, so we’re going to continue the happy hour for whenever the U.S. or Brazil is playing,” says Carolina Friser-Frederiksen, marketing director for Giraffas. “Of course, we’re going to have the pão de queijo featured as much more than an appetizer with a larger portion so that families can come in. Luckily, we’re super family-friendly.” Friser-Frederiksen adds that the activation in Brazil will be similarly modest.

McDonald’s has another advantage as an official sponsor: It has a significant presence on site at the Olympics. Historically, McDonald’s has built several restaurants in and around the Olympic Village surrounding the stadiums and sporting arenas. Given how spread out the Rio venues are—there will be 32 venues across four geographic clusters—the brand is changing tack this year and building a single unit in the international zone with the dual purpose of serving both athletes and media.

“Every game is a little different because of the makeup and how the host country plans it out and develops it out,” Lewicki says. “Even though it’s summer games to summer games, this is vastly different than it was in London.” He adds that the zone where the McDonald’s restaurant is located only houses 40 percent of the total events; the center in London hosted 60 percent.

McDonald’s is also bolstering its presence with a Dessert Kiosk for Olympic spectators and guests. These condensed stores, which sell cool treats like McFlurries and milkshakes, are especially popular in Brazil, Lewicki says, outnumbering traditional stores by about three to one.

Sponsors turned stewards

Just as the brand-consumer dynamic continues to evolve, so, too, does the event-sponsor relationship. Last year, FIFA found itself mired in scandal when it was revealed that more than a dozen senior officials had been involved in fraud and money laundering through the international soccer organization. A number of big-name sponsors pulled out, while others, like McDonald’s and Coca-Cola, called for the FIFA president’s resignation.

The incident raised the question as to how involved brands should be in policing the events they sponsor. Moving forward, major FIFA sponsors like McDonald’s are recalibrating these partnerships to include a stewardship capacity.

“The dynamic has changed, and a lot of it has changed because of the makeup of the world, the access of instant communication and technology. We can no longer sit back idly and accept the fact that ‘We’re just a sponsor, and we’ll hopefully get a promotion out of it.’ We do have to take a much more active role,” Lewicki says. “I think you’ll see brands take a little bit more of a stewardship role over the next couple of years because we have to, because we’re held to a higher standard.”

With great marketing power comes great responsibility. For smaller brands, that’s part of the reason they are careful to avoid any direct Olympics promotion. After all, as Berkowitz points out, sponsor partners should benefit from their investment.

“It’s not a totally level playing field, and brands that pay to sponsor the games should be able to get some return on their ad spend that is exclusive to their sizable outlays,” Berkowitz says. “Beyond any waivers and loosening of restrictions, expect far more marketers that aren’t Olympics sponsors to lightly touch on Olympics themes in their campaigns.”

For example, Giraffas plans to play up its Brazilian roots and create its special game-watching menus, but it will also explore safe ways to engage with consumers during the Olympics. Friser-Frederiksen says the brand will look at taglines or hashtags that it can legally use. She also thinks, given the large Latin American population in Florida, consumers will jump on social media engagements when the soccer games begin.

I think with any large sporting event specifically, it’s difficult to detach your company from wanting to join into a trending theme and not being able to because there are copyright and trademark infringements,” she says. “You have to find a fun twist without breaking any rules.”

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