21 February 2013

Laying the Law Down on Ambush Marketing

​One year to go before the start of the 2014 Winter Olympics in Sochi, Russia. As with all major sporting events, one debate that’s on a constant boil is ambush marketing. Let’s start by defining the term.
The European Sponsorship Association (ESA) describes it as “... any kind of marketing activity undertaken around a property by an entity that is not a sponsor, where the entity seeks commercial benefit from associating itself with the property without paying any sponsorship fees.” In other words “corporate shop lifting,” or taking something for nothing when others have paid their way.

Regardless of these sinister overtones, some would describe ambush marketing as a bit of innocent fun that involves an audacious story of how a plucky underdog beat the system and – if only for a moment – won the hearts and minds of an unassuming public.  One can certainly argue that ambushers bring their own brand of creativity to the table that helps keep official sponsors alert and constantly thinking about ways of keeping their own campaigns fresh and relevant.

Many examples spring to mind. Rewind to 1994 at the VISA-sponsored Winter Olympics in Lillehammer when American Express claimed Americans do not need "Visas" to travel to Norway. Or Linford Christie’s infamous Puma logo contact lenses at the 1996 Olympics, sponsored by Reebok. Or Tonga’s Epi Taione who changed his name to Paddy Power at the 2007 Rugby World Cup?  How adidas’ blood must have boiled when Li Ning, founder and chairman of the sports apparel company that bears his name – lit the cauldron at start of the 2008 Beijing Games. And spare a thought for Budweiser, sponsors of the FIFA 2010 World Cup in South Africa, who watched on helplessly as the football world toasted the audacity of Dutch rival Bavaria, who sent in 36 rather ‘photogenic’ ladies all dressed in orange to support Holland in their game against Denmark.

Creativity is the modern day pre-requisite of effective sponsorship activation, especially in a world of unprecedented clutter when multiple brands with legitimate rights of their own are fighting for a share of voice. No question ambush brands give the creative muscle of official sponsors some much needed exercise.

Creative or not, ambush marketing has become somewhat of a dark art. So trust the legal profession to throw some light on how one addresses the rights and wrongs of this activity. A good friend and astute sports lawyer told me: “You can do what you want so long as you don’t break the law!” Implicit in his message is an assumption that one knows what the law is. Some brands - like Bavaria - celebrate being ‘unofficial’ and flirt with the authorities knowing that their addiction to ambush is hated by the rights holder but loved by the public. In this case, the severity of FIFA’s response helped give Bavaria the oxygen of publicity: All of the mini-skirted ladies were ejected from the venue and two were arrested on charges of organizing “unlawful commercial activities.”

The steps now being taken by governing bodies and organizers to protect the official rights of sponsors who have paid millions for the privilege of exclusive representation is a trend that reveals a telling insight. Look no further than the London Olympic Games and Paralympic Games Act of 2006 that created the London Olympic Association Right (LOAR). This gave Games’ organizers the power to grant licenses to authorised sponsors to use the symbols, words and logos of the event. Some were surprised at how restrictive the provisions of the Olympics Act were but even in the grip of a global recession, LOCOG (London Organising Committee for the Olympic Games) still managed to raise nearly £800m in commercial sponsorship revenues. An extraordinary achievement. Upwards of 50 companies officially associated with the event, sleeping sound in the knowledge that their rights are being rigorously protected by law.

The industry recognizes that nations bidding to host any event need to be able to demonstrate that they have an adequate legal framework to protect the rights of official sponsors. LOCOG would never have been able to raise the unprecedented levels of commercial revenue if brands felt unprotected and vulnerable to ambush. In many ways, the ever stronger arm of the law is making anti-ambush legislation more effective. It has helped avoid giving ambushers a level of cachet and perceived ‘edginess’ by virtue of being seen to exploit loop holes and areas of legal uncertainty.

Although unequivocal, anti-ambush laws are far from simple. Complexity still breeds an appetite to ‘test’ the system and for many, indirect association via separate sponsorship arrangements provide brands with legitimate ways of making a credible link without falling foul of the law. For example, did Aviva ‘ambush’ its rival and LOCOG sponsor, Lloyds TSB? As a long term sponsor of athletics (signature event of a Summer Olympics), Aviva quite rightly used its rights with UKA to make an association with a sport it has sponsored since 1999. British Gas is the headline sponsor of swimming in the UK. Was it ambushing its rival and LOCOG sponsor EDF? Many companies with no official rights to the London Games chose to sign athletes in their individual capacity as part of an ambassador marketing campaign. Nestle, for example, fronted its ‘Get Set Go Free’ initiative with popular Team GB athlete, Tom Dayley. Was Nestle ambushing its rival and LOCOG sponsor Cadbury? Complex indeed.

These brands would argue they’re not ambushing; simply using their own ‘assets’ to maximize an association with a connected property that does not infringe the rights of the event sponsors. A rights holder not liking something doesn’t make it unlawful. Even ESA say “....anti-ambush legislation should not be allowed to stifle the financial ‘dividend’ generated in the wider economy generally, especially where the host nation has had to invest specifically in order to stage the event.”

ESA’s position urges a pragmatic approach to ambush marketing, concerned that “. . . anti-ambush laws and practices have in some circumstances brought the concept of sponsorship into disrepute.” They’re right. An unduly heavy handed approach could backfire, giving additional publicity to (and potential sympathy for) the ambusher. The Bavaria example earlier is a case in point. Any action should be proportionate to the circumstances. ESA goes further and encourages rights holders to “use the full range of non-legal measures to combat ambush marketing and, so far as possible, to foster an environment where ambush marketing is seen by the general public as unattractive and where appropriate unpatriotic and/or dishonourable.”

This drives straight to the heart of a way forward. ESA’s own guidelines move the story from a legal debate to a moral debate. The very public who have led to the uprising of ambush marketing could ironically lead to its downfall.  Imagine a public education campaign that spelt out exactly how the money invested by official sponsors benefitted sport and society as a whole. The New Zealand team competing in the 2003 Americas Cup did exactly that. A full blown advertising and public relations campaign urged fans to only buy official sponsor merchandise because that money was quite literally keeping the crew – and the hopes of the nation - afloat.  Fast forward nine years and LOCOG painted an even more graphic picture: without the official sponsors, the 2012 Olympic and Paralympic Games would simply not have happened.

More rights holders need to be more forthright in explaining why sponsorship revenue is critical to the very existence of organized sport and broader entertainment at all levels, not to mention the positive social and economic benefit they bring. And sponsors need to be more creative in connecting with its audience and demonstrating value. Rather than continue to spend time, money and positive energy in unscrambling the legal complexities of it all, ambushing the ambushers may simply come down to pricking consumer conscience and finding more compelling ways of selling the benefit of brands who actually pay to play.

Whilst marketers plan their next sporting manoeuvre, the rest of the world is counting down to the relishing prospect of a first Winter Games in Russia and then of course a Brazilian World Cup. 

Andy Sutherden is Hill+Knowlton Strategies' Global Head of Sports Marketing & Sponsorship