Visa rock-solid in sponsorship of the Olympics

By DITA DE BONI

The black eye dealt to the Olympic Games in the wake of a series of International Olympic Committee scandals last year has not deterred giant international brand-names from wanting to bask in the glory of athletic distinction.

For years, corporations flocked to the Games because they were seen to be aligned with everything a successful business strives to achieve and convey: excellence, competitiveness, team and individual accomplishment, not to mention squeaky-clean family fun.

As with most high-profile events, however, big names and big bucks can also mean media coverage of less positive developments, including political friction and the private lives of sports figures who are increasingly gaining prominence as media personalities.

Sydney Olympic organisers are already dealing with a possible black cloud over the equestrian event, and are holding their breath to see if Aboriginal groups make good on promises to use the international media platform of the Games to draw attention to the Government's unwillingness to apologise for institutional racism.

Significantly, Sydney's Games budget had almost $100 million wiped from it last year thanks to the IOC payments scandals and the ensuing difficulty in attracting sponsors.

Deals have also been lost over sponsorship clashes, such as Reebok's multimillion-dollar withdrawal over the organiser's clothing deals with competitors Bonds and Canterbury.

But against that background, global giants including Coca-Cola, IBM, Fuji Xerox, McDonald's and UPS, as well as Australian heavyweights Telstra, BHP and Holden, are still standing in line with their hands in their pockets to leverage the Games' near-universal appeal.

One sponsor that has doggedly stuck with the Olympics for several years is credit card company Visa. Since 1986, Visa has sponsored three Olympic Summer Games and four Winter Games.

This year, it joins 23 other corporations as Millennium Olympic Partners in Sydney, contributing an unnamed sum to be the "payment card of the Games."

In town this week to meet member banks, Scot Smythe, Visa International's vice-president of sponsorship and event marketing, says the corporation trusts that the person in the street is smarter than he or she is given credit for.

"There is a definite separation between IOC members and the product on the field," he says.

"If there was proof that the Visa brand confidence was eroded because of an erosion in confidence for the [Games], we might reconsider, but on a global basis, it is still our most important [sponsorship]."

Apart from the Olympics offering an attractive "alignment of values," there are several other more tangible reasons why Visa throws its weight behind the big event.

The corporation chooses events that invariably offer ticket sales so that the product is closely associated, in the consumer mind, with the brand.

Mr Smythe says the corporation's 21,000 member banks also have the opportunity to tie in with events through a number of financial products and services.

"There are certain things we wouldn't get behind. For example, an [athlete] attempting to cross the Grand Canyon on a tightrope does not portray the kind of safety and security we would like to be known for. Also, that same person wearing a Visa t-shirt splattered across the bottom of the Grand Canyon does nothing for our image."

The America's Cup was another event Visa decided not to get behind "because there are no ticket sales associated with it."

So how does Visa measure the amount of return from their multimillion-dollar sport sponsorships, including a new contract with the Rugby World Cup organisers ("The All Blacks are the best brand in rugby")?

Mr Smythe says the company has developed a number of internal tools to measure the effect of its sport sponsorships - which he admits far outweigh art sponsorships.

It has tracked its sales against that of competitors, and done surveys of brand recognition that have turned up positive results.

The company claims that brand awareness went from 52 per cent after the Winter Olympics in Calgary in 1988, to 75 per cent after the 1996 Olympics in Atlanta, with that recognition a key factor in deciding the forum for sponsorship because the Olympics appeal to a broad cross-section of consumers.

Visa has also stuck with the event over 14 years, which is the best strategy according to studies that show sustained sponsorship of a similar type of event year-on-year is the best way to cement the connection in the minds of the viewership.

He says for every sponsorship dollar put into an event, the corporation spends two or three dollars more to leverage that sponsorship, and so "every dollar we spend we are looking for a return."

"We can also track, through member banks, how their sponsorships are going based on their leverage using our brand."

While a dwindling number of marketers continue to believe the great expanse of sport sponsorship is like nailing jelly to the wall, most indications are that in the era of professional sport and huge revenues, sponsors are being approached more by sporting groups rather than the other way around.

Experts agree that sports sponsorships are gaining in popularity.

Estimates put the growth of event sponsorship at 15 per cent a year.

Endorsement deals by individual athletes or teams are also gaining popularity.

Visa says it has discussed beefing up its sponsorship of the Rugby World Cup by approaching individual All Blacks to front product endorsements.

But the science of sports endorsements has yet to be refined.

A survey by Sports Media showed that less than half the companies that signed deals with stars had morals clauses.

Almost 73 per cent of the companies did not tie an endorser's payments to results. More than one-quarter had no predefined goals for their programmes of sponsorship.

A Sports Media spokesman suggested that firms sponsored a sport because the decision-maker was a fan.

Perhaps the effectiveness of such spending is best illustrated by the fact that tobacco companies are fighting to retain their right to be involved with a host of international events closely linked with cigarette brands.

This is most noticeable in motor racing, where the tobacco industry spends more than $US300 million ($633.8 million).

And it appears to work.

A study of 1063 boys aged 12 to 13 by the British Cancer Research Campaign found that boys who watch Formula One racing are almost twice as likely to start smoking as boys who do not.

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