Monday 1 September 2008

Li Ning scores a 10 in ambush marketing

At the Beijing Olympics, it wasn’t just Olympians and the Chinese government that were gearing up towards the big event. Marketers were working hard to catch some of the limelight that official Olympic sponsors paid handsomely for. Authorities at central and local levels had united to keep sponsors happy.

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Guanyu said...

Li Ning scores a 10 in ambush marketing

Connie Carnabuci and Yonnie Fung
Sep 01, 2008

At the Beijing Olympics, it wasn’t just Olympians and the Chinese government that were gearing up towards the big event. Marketers were working hard to catch some of the limelight that official Olympic sponsors paid handsomely for. Authorities at central and local levels had united to keep sponsors happy.

Multinationals such as Coca-Cola, Lenovo, McDonald’s, and Samsung had each shelled out up to US$100 million to be global sponsors of the event. Others resorted to the old game of ambush marketing - associating themselves either directly or indirectly with the Games.

Ambush marketing at the Olympics is well documented. In 1994, American Express ran the “Americans do not need a visa to go to Norway” campaign when Visa won sponsorship rights to the Lillehammer Winter Olympics.

At Atlanta in 1996, Nike bought billboards all around the Olympic venues to the chagrin of Reebok, the official sponsor.

The non-official marketing victor of the Beijing Games was Li Ning. An estimated four billion people watched the six-time Olympic medallist and owner of the Li Ning sports apparel brand fly around the stadium to light the Olympic torch.

Adidas, which competes with Li Ning in the China market, invested nearly US$200 million in sponsorship and marketing. Li Ning was wearing Adidas - perfectly legal.

Yet the finale of the opening ceremony will be firmly imprinted in viewers’ minds (at least the 1.3 billion Chinese viewers) as being associated with Li Ning. Not Adidas. “Impossible is Nothing”? Indeed.

Large-scale ambush marketing schemes rely on marketing genius to operate within the margins of the law. Learning from previous ambush marketing stunts, the Beijing Organising Committee for the Olympic Games banned unauthorised drinks and T-shirts advertising non-sponsors from Games venues. The less subtle, but more common forms of ambush marketing have also been targeted.

Unauthorised Chinese manufacturers wasted no time in getting up to their old tricks. Mascots, Olympic rings and emblems were slapped on everything from T-shirts to wind-up dancing pandas.

Beijing turned grey skies blue for a flawless Games. Reputedly soft on intellectual property protection, the government was conscious of not giving critics a reason to comment. The Olympic logo and mascots are extremely valuable - the 2004 Athens Olympics delivered US$61.5 million from the sale of licensed merchandise alone.

In addition to providing legal protection through the Regulations on Protection of the Olympic Logo 2002, which is required of all host countries, China also proactively combated piracy by taking “rapid response” action against infringers.

A public hotline was set up to report counterfeiters, and successful enforcement efforts were publicised as a warning to would-be infringers. Chinese authorities partnered with the World Customs Organisation to track flights from China and check for unlawful goods. Possessing a single counterfeit item could attract a fine. Unauthorised manufacturers might find themselves ordered to stop their infringing acts or compensate customers. In some cases they would be fined or even have their business licences suspended.

According to official statistics, 2,882 cases of infringement were found between 2004 and the first half of this year, involving 33.97 million yuan (HK$38.84 million). Offenders have been fined a total of 20.64 million yuan. China has shown that where there is a will, there is a way. It remains to be seen whether the commitment to combating infringement continues now that the cameras have stopped rolling.

Connie Carnabuci is a partner at Freshfields Bruckhaus Deringer and Yonnie Fung is an international legal consultant