By Sam Mamudi
NEW YORK--In the summer of 2010, Visa Inc. hosted a get-together in New York for about 20 of its top marketing executives from around the world.
In the days that followed, the face-to-face meetings and at least one big group dinner were focused on one question: how the company would use its sponsorship of the world's biggest event, the Olympic Games.
The challenge was to harness the reach of the Games to promote the brand, extracting as much value from this summer's events in London.
What makes the Olympics unique is scale, both in terms of audience size and the marketing efforts surrounding the event. With the Summer Games in London, which begin on July 27, expected to be watched by billions of people over more than two weeks, the marketing and advertising effort, even for some of the biggest spenders in the world, is a task that requires special focus.
The Olympics have 11 so-called TOP (The Olympic Partner program) sponsors, including Visa (V), Procter & Gamble Co. (PG) and Coca-Cola Co. (KO). TOP sponsorship can mean exclusive rights in industry categories and the ability to use Olympics images and trademarks around the world.
Olympics TOP sponsors likely pay about $100 million for a four-year commitment, said Jim Andrews, senior vice president at sponsor consulting firm IEG, who added that typically sponsors then spend three-to-four times the sponsorship amount to plan and execute the associated marketing campaigns. In other words, being a global Olympics sponsor could mean a commitment of close to half-a-billion dollars.
The sponsor companies certainly try to make those dollars go far. Coca-Cola expects to use Olympics-themed marketing in 110 countries, while Visa will be marketing the Olympics in more than 70 countries in the next few months. P&G will be pushing Olympics promotions for about 30 of its brands in more than 80 countries.
Even a multinational company that isn't a top Olympic partner, such as BMW (BMW), is partnering with Olympics bodies in seven different countries.
While these companies have their own ways of planning and implementing Olympics marketing, there are also similarities: Each company has developed a central theme that is then tailored by brands or regions for the best fit.
"We wanted one strategy, one advertising idea and the same look and feel across the world," said Antonio Lucio, global chief of marketing, strategy and corporate development at Visa. "But while the main ingredients are the same, we want every country to have its own flavor and spices."
Visa's marketing push uses the slogan 'Go World' and is wrapped around Team Visa, a group of more than 70 athletes from 30 countries. Part of the variation will be which athletes are highlighted - pole vaulter Yelena Isinbayeva will be featured heavily in Russia, for example, while in the U.S. more focus will be on swimmer Michael Phelps.
Coca-Cola began its planning for this summer's Games when London was announced as the host city in mid-2005. The company's Future Host Program begins the planning for the event, said Claudia Navarro, global Olympic marketing director.
Navarro runs the permanent team at Coke that handles Olympics sponsorship - this is the 84th year it has been involved with the Games. She said one of the team's tasks is to help pass along knowledge learned from previous games to the Future Host Program team. As the Games get closer, Coke starts pulling in more staff to work on events and campaigns in the host city and across the globe.
"By the time the Games begin we have hundreds, if not thousands, of people working on the Olympics," she said.
For this year's Games, brand leaders from across the company decided to make music and sports the theme, part of Coke's effort to connect with and energize young people, said Navarro. The result was 'Move to the Beat', the global campaign for the Olympic Games.
Once that decision was made, a cross-functional team of more than 20 people led by Navarro took over, developing marketing materials and making decisions about which athletes to sponsor. The campaign was launched in February, and saw Coke team up with music producer Mark Ronson and five athletes from around the globe.
While those six will be used in most markets - "People around the world are used to thinking of Coke as an international brand," said Navarro - some localized campaigns will use their own musical acts and athletes.
At P&G, the Cincinnati-based consumer products firm has an over-arching corporate theme - celebrating moms - but gives each of its participating brands room to develop brand-specific themes as they see fit.
To decide which brands would take part, the corporate parent invited its more than 20 brands that have more than $1 billion in sales, as well as other, smaller brands, to pitch their ideas.
"It essentially was like tryouts," Marc Pritchard, P&G's global brand building officer told MarketWatch. "We wanted them to show the superior benefits of their brand with the Olympic theme."
P&G ultimately chose 30 brands, including detergents Tide and Ariel, battery-maker Duracell and diaper brand Pampers. Brands were free to choose which athletes they wanted to sign, albeit with approval from corporate headquarters. In total, the company has partnered with about 150 athletes around the world.
Appealing to, and celebrating, moms has already been effective ("every Olympic athlete has a mom, and we're in the business of helping moms," said Pritchard explaining the theme).
P&G began the push at the Winter Games in Vancouver in 2010, where it partnered with the U.S. team. Those games saw 18 brands and 17 athletes involved - much smaller in scale than this year - and Pritchard said the effort generated $100 million in extra sales, market share growth and what he called above average return on investment. After the success in Vancouver, an International Olympic Committee suggestion to become a top-line sponsor seemed like a good idea, he added.
Coke's Navarro said it's up to individual brands and regional offices to decide on whether and how much to use the Move to the Beat campaign, but she expects use in about 110 markets - three times the number of markets that used Olympics marketing during the 2008 Games in Beijing. She attributed part of the growth to the appeal of London, but also to this year's strategy.
"I think we have a particularly attractive message - music has broad appeal," said Navarro.
Visa, too, is ramping up its efforts this year, marketing in twice the number of countries than in 2008. Lucio said that was in part due to the company being an established, and larger, public company after listing in March 2008.
"We're now much better at leveraging and commercializing our properties," he said.