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Olympic sponsors paid a lot of money for the Beijing Games. So where are all the ads?

By on January 28, 2022 0

But business leaders have few good options as they are torn between the world’s two largest economies. Stay silent and risk alienating consumers in places like the United States. Withdraw and potentially damage their prospects in the vast Chinese market.

International companies know the risks. Last year, Nike (NKE), H&M (HNNMY) and other Western brands have been boycotted in China due to a stance they have taken against the alleged use of forced labor in Xinjiang. And in 2019, comments by the then-Houston Rockets general manager in support of pro-democracy protests in Hong Kong threatened billions in business between the NBA and China.
Sensitivities leave companies walking on thin ice, according to Dipanjan Chatterjee, vice president and principal analyst at Forest (FORR) in charge of brand strategy.

He described the upcoming Games as “the Olympics in reverse”.

“It’s been a very, very unusual year,” Chatterjee told CNN Business. “Usually at this time of year, you know, all the brands are all excited because the Olympics are right around the corner…Instead, what you’ve found is that they’re are folded up in their shell.”

People wearing personal protective kits walk past a Winter Olympics display in Beijing on Wednesday.

Mark DiMassimo, founder and creative chief of DiGo, an advertising agency in New York, said sponsors seem to be minimizing their involvement, at least as the Games approach.

“You don’t see the typical promotion of their Olympics ad in advance. You would usually see it then, and you don’t,” he said. “I think they’re trying not to make history.”

Rising tensions

The United States was soon joined in its diplomatic boycott by the United Kingdom, Australia, Canada and Denmark, who each announced that they would not send any government delegations to the events, citing security concerns. human rights in China. Japan and the Netherlands also said their senior officials would not participate, although they did not describe their actions as a boycott.

China, for its part, called on the international community to “depoliticize” sport and warned that countries could “pay the price for their wrongdoing”. The Chinese government has also repeatedly and vehemently denied all allegations of human rights abuses.

But for businesses, the diplomatic storm has unleashed a gigantic stampede, according to DiMassimo.

There were “many late-night Zoom calls and meetings as advertisers tried to figure out what to do,” he said, referring to the aftermath of the US boycott.

A worker cleans a section of the Olympic Park in front of the Olympic Tower in Beijing on Wednesday.
Even before that, the pressure was mounting. Sophie Richardson, Human Rights Watch’s China director, said her team wrote an open letter to Coca-Cola last May asking if it had conducted a human rights review of China in light of its participation in the Games.

Coke did not respond, which was “disappointing”, Richardson said, arguing that the company was exercising “double standards”.

“It will defend the right to vote, for example, in the United States, where it is relatively easy and free, and presumably in their calculations, it will perhaps make them even better,” she added, referring to the intervention of Coca-Cola after a controversial debate. Voting law in Georgia was passed last year.
NBC says its coverage of the Beijing Olympics will include the

“But they won’t talk about the complete lack of voting rights in a place like China.”

Asked about it by U.S. Senator Tom Cotton last year, an executive said Georgia was the company’s home state, “where many of our employees live and work.”

“We are more engaged on political issues here at home, but we are clear in our respect for human rights around the world,” said Paul Lalli, Coca-Cola’s global vice president of human rights. Cola.

walk carefully

Experts say major Olympics partners collectively pay billions of dollars to sponsor the Games, including fees paid to organizers and additional marketing costs.

But analysts suspect their ad campaign this year could be much more subdued than that number warrants.

“There’s speculation that a whole bunch of these brands that bought premium Olympics ad spots are going to run generic messaging,” Chatterjee said, referring to standard ads that weren’t created specifically. for the event.

“I mean, it’s mind-boggling, isn’t it?” Chatterjee added.

“They paid a premium, they paid top dollar to be associated with this incredible fairness of the Olympics,” he said, suggesting they should “back off” to avoid controversy.

Not everyone sees it that way.

Rob Prazmark, who runs 21 Marketing and helped create the International Olympic Committee’s global sponsorship program nearly 40 years ago, said he finds it hard to believe that sponsors “would end up spending hundreds of millions of dollars” and “would not use the Olympic program mark.”

“Research always indicates that he has so much fairness and strength at heart, not just here in the United States, but in China, Japan, Korea, France,” he said. “Companies are realizing that the upside potential outweighs the downside risk.”

Coca-Cola dancers take part in an interactive display at a train station in Zhengzhou, China. Credit: Coca-Cola

Admittedly, sponsors are not holding back in mainland China.

Over the past few weeks, brands have seized the opportunity to connect with consumers on the ground, with Coca-Cola, Visa and Procter & Gamble (PG) all deployments of promotional campaigns.

CNN Business reached out to all 14 major Olympic partners for comment. Most did not respond, while Intel and Mengniu Dairy in China declined to comment.

Procter & Gamble unveils beauty salon for athletes in the Olympic Village. Credit: Procter & Gamble

Atos (AEXAY)a French IT company, said it would “not comment on matters outside of our role as a global IT partner” and would fully respect “the IOC’s human rights strategy, in addition of our own ethics and compliance program”.

Coca-Cola said its top executives would not be at the Games due to the Covid-19 pandemic and a scheduling conflict with its upcoming revenue, without further comment.

Allianz (ALIZF)a German insurer, said it was focusing on athletes’ achievements, while Swiss watchmaker Omega said it planned to focus on “ensuring that every result is measured with the utmost precision”.

Approach the problem

Some companies, however, have tried to tackle the elephant in the room.

Last July, a US congressional committee summoned US companies to a hearing to discuss their commitment to human rights in China and the risks of being associated with the Games.

Executives from Airbnb, Coca-Cola, Intel, P&G and Visa testified, each noting that they were long-term partners with the IOC and were not focused on any particular set of Games.
US lawmakers ratchet up pressure on US sponsors over Beijing Olympics
“We don’t believe our sponsorship detracts from our global commitment to human rights,” said Steve Rodgers, Intel’s chief legal officer.

“Our sponsorship is not an endorsement of any specific host country or its government, nor an endorsement or endorsement of national activities that may take place in that country.”

Some companies have even met with activists.

Last October, Allianz spent time with activists from the World Uyghur Congress, according to Zumretay Arkin, the group’s program manager. The organization says it represents the interests of Uyghurs, an ethnic minority group in Xinjiang that the United States and others say are victims of human rights abuses in China.

Arkin said the organization, along with a Tibetan human rights group, had contacted all of Beijing’s Olympic sponsors and found that “Allianz was the only company willing to meet with us.”

An activist protesting outside an Allianz office in Berlin, Germany.

During the meeting, a former Uyghur teacher in detention camps and a former Tibetan political prisoner shared their past experiences with Allianz representatives, according to Arkin.

In a statement to CNN Business, Allianz said “we consider dialogue with civil society organizations to be very important.”

“We spoke with [such organizations] on our sponsorship in recent months and to know their expectations vis-à-vis sponsors”, added the company, without further details.

The big picture

Still, it’s widely acknowledged that this is unlikely to be the first or last controversy with the Olympics.

Observers point out that the Games in Berlin in 1936, Moscow in 1980, Salt Lake City in 2002 and even Beijing in 2008 were also highly politicized.

Companies “know that if they are going to sponsor the Olympics, there will be protests and boycotts. This happens just about every Games,” said Rick Burton, professor of sports management at Syracuse University, who was the U.S. Olympic Committee’s marketing director for the 2008 Beijing Games.

“I think they’re taking the position that they have to operate regardless,” he added.

Brands also typically lock themselves into deals that can span a decade, according to Prazmark.

“Some of these companies have contracts until 2032, others until 2028,” he said. “And so they kind of go with the tide, which means there are Games that are great, others that aren’t so great, but they realize they’re in it for the long haul. “

– CNN Beijing Bureau, Emiko Jozuka and Chris Liakos contributed to this report.