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How sponsors can rethink advertising with Tokyo Olympics spectator ban

How sponsors can rethink advertising with Tokyo Olympics spectator ban

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Olympics organisers have fully banned spectators from the upcoming Olympic Games in Tokyo to curb the spread of COVID-19. The decision made on 8 July came hours after Japanese prime minister Yoshihide Suga placed Tokyo under a state of emergency until 22 August clashing with the dates on which Olympics is to be held, organisers said in an official statement on the website.  Previously, Tokyo Olympic organisers banned international spectators and as of 21 June, said venues could only fill up to 50% of capacity which allowed for 10,000 domestic spectators.

Meanwhile, citizens in Japan have also urged the government to cancel the Olympics. More recently on 9 July, Japanese news agency Kyodo News said a group of citizens sought a court injunction last Friday to halt the upcoming games.

This latest announcement certainly deals a blow to Tokyo in which ticket sales also account for a chunk of revenue. The organisers had also which increased spending for the games by 22% last December to US$15.4 billion. Reuters previously said that the estimated bill for the games’ postponement now stands at US$3 billion as of July. Approximately 4.48 million tickets were sold by organisers and the Japanese government had anticipated “a tourism windfall” before restrictions came into place, Reuters said. Ticket sales, which were initially pegged at about US$815 million, will now be reduced to zero as a result of the spectator ban.

Worldwide Olympic partners include Coca-Cola, Airbnb, Alibaba Group, and Visa, while gold partners for the Tokyo games include Asahi, Asics, Canon, NEC, Meiji, Fujitsu, and Mizuho. Meanwhile, brands such as Japan Airlines (JAL), Ajinomoto, Cisco, Kikkoman, ANA, Mitsubishi Electric, and Hisamitsu joined as the official partners of the games.  At the same time, Reuters added that over 60 Japanese companies forked out more than US$3 billion to sponsor the games. The sponsors also paid an additional US$200 million to extend their contracts after the games were postponed.

According to Reuters, this does not include partnerships with Toyota, Bridgestone, and Panasonic, as well Samsung. These companies came onboard as top-tier sponsors and as a result, have separate deals with the International Olympic Committee “worth hundreds of millions of dollars”, Reuters said.

JAL's VP, global CX and marketing, Akira Mitsumasu, told MARKETING-INTERACTIVE that the news came as a shock, even though with growing concerns over the rising number of cases in Japan, the airline has to some extent had that scenario in its contingency plans. Mitsumasu clarified that JAL's scope of sponsorship is limited to Japan only and although much of the showcasing and hospitality events have to be scaled down or cancelled due to the ban on spectators, JAL will still be flying many national teams from their respective countries to Japan. "By doing what we are good at doing in providing the best Japanese hospitality, we believe that will in itself be the best way to promote the JAL brand," he added.

While the airline has been actively promoting its sponsorship of the games in Japan, it has made sure to not be tone-deaf over public concerns regarding the spread of COVID-19 and the Delta variant. In a microsite, JAL showcased its new slogan for 2020 and beyond, Fly for it, to represent the valiant spirits of the people running towards their dreams. To spread this vision, the airline said it will offer opportunities through various events and communication initiatives, which will encourage everyone to take action and tackle their challenges.

"In addition to supporting the athletes who have trained so hard under difficult circumstances to compete in the Olympics and the Paralympics, we have also focused on the message of resilience, ie. just like the athletes, our human effort in improving ourselves, in starting something new, and creating a better tomorrow," Mitsumasu said.

In a statement to MARKETING-INTERACTIVE, a Coca-Cola's spokesperson said it is aware of the recent decision to host the Olympics without spectators and it is supportive of the measures being taken to ensure athletes can compete safely in Tokyo. "We know this decision was made in the best interests of the health and safety of all. We are committed to working together with the International Olympic Committee, International Paralympic Committee and the Tokyo Organising Committee to deliver a safe and successful event," the spokesperson added. Coca-Cola did not comment on how it will evolve its advertising and sponsorship.

MARKETING-INTERACTIVE has also reached out to other Olympics sponsors for comment on how they will evolve their advertising and sponsorship in light of the latest ban. 

Media broadcast partners react

Separately, CNBC reported that its parent company, NBCUniversal, plans to use technology to enhance the production of its sports broadcast in an attempt to grapple with the lack of spectators. NBCUniversal has been awarded broadcast rights in the USA for the games through to 2032. Meanwhile, in Asia, Singapore’s Mediacorp, Malaysia’s Astro and Hong Kong’s TVB have acquired broadcasting rights to stream the games on their platforms.

According to Astro's head of sports, CK Lee, all sponsorship activations will still happen domestically as the interest level locally will be very high. "We do not foresee any impact because our focus has always been from a Malaysian angle. Our crew will be focusing on stories about Malaysian athletes, coaches and local fans," he explained. Lee added that Astro will produce exclusive interviews with its Malaysian contingent as well as share updates before and after the events.

Meanwhile, Mediacorp's spokesperson said it has finalised its list of sponsorships for the Olympics across its platforms and does not see the announcement to have any impact on its partnerships. Like Astro, Mediacorp's coverage of the games will include interviews with athletes and on-ground reports from its news correspondents.

While TVB did not comment on the impact of the news on its plans for the Olympics, the broadcaster said the games is a long-awaited sports event and TVB strives to ensure that Hong Kong citizens are able to enjoy the Games via various TVB platforms.

"We will broadcast more than 500 hours of the Tokyo 2020 Olympic Games events live and related programmes on Jade, J2, TVB News, Pearl and TVB Finance & Information channels. myTV SUPER, our OTT platform, will dedicate 13 channels to provide round-the-clock games broadcast," it added.

According to Pablo Gomez, Kantar's head of media, Asia Pacific sponsorships will now be limited to advertising mainly on digital and TV. Digital mediums would obviously be the first platforms that advertisers target, especially due to the lockdowns and social distancing measures experienced in many countries, he said. While it is hard to determine the impact on TV ad spend, Gomez explained that TV agreements tend to be done weeks in advance and is not easy to go out without a penalty.

"I know that different global advertisers have been dropping from TV advertising because of the uncertainties and the negative public opinion, so they opted to take a more digital approach. My guess is that these companies that were already planning to have TV investment will remain to avoid penalties; unless they have the leverage to negotiate with the networks," he added.

On the media broadcasters front, Gomez said most of them will continue as planned and while not having fans in the stadium is bad news for the games, there is not much room to change plans on this. In fact, he reckoned that most brands have already produced or are in the advanced stages of producing their ads and content, and they have agreements with the media. 

Digital is one of the few channels that will give advertisers the flexibility to reallocate the budgets and provides an environment to engage those fans directly through empowering creatives that connects in the context.

Seizing the opportunity to be creative and meaningful

Without a physical fan presence, industry players told MARKETING-INTERACTIVE that advertisers and sponsors now need to be creative with their activations. For a highly emotional event such as the Olympics, in-person experiences are no doubt irreplaceable. However, Verizon Media's head of APAC sales, Rico Chan said advertisers and sponsors should look for innovative approaches that bridge the physical-virtual divide and seek to provide experiences that enable fans a closer connection to the games.

For example, brands can use technologies such as extended reality to bring spectators closer to the physical experience of being at the Olympics. Citing its work for sports leagues such as the National Basketball Association and the National Football League, Chan said the VR experience through Oculus and Yahoo Sports Play AR are some ways it has worked with companies to allow sports fans to be part of the action.

"Ultimately, advertisers and brands should focus their attention on helping spectators to bridge the emotional gap of not being physically present at the Games, while being cognisant that this is a unique Olympics that will be conducted under the shadow of a pandemic, through authentic, relevant and meaningful experiences that make an impact," he explained.

While digital mediums are the safest way for fans to stay connected, this does not necessarily mean that brands and advertisers are limited in the ways they can engage with consumers. Chan said:

A creative and innovative digital activation enriched through technologies such as AR, VR and mixed reality can be a new way for people to tell their Olympics tales.

"Imagine a ‘shop the look’ option where users can purchase the outfits and gear of their favourite athletes as they watch the games or a video watch party that keeps the social factor alive. Brands that think out of the box with their content strategy will have much to gain," he added.

Likewise, Kantar's Gomez said this provides an opportunity to create something more purposeful around the games. Brands are concerned with being seen as positive agents in society, and the spirit of unity of the Olympic Games delivers a perfect platform for that, he explained.

"Brands should look to using that platform to talk about LGBTQIA, human rights, BLM, and gender equality, among other topics. Advertisers could use an opportunity to transform the Olympics into something more meaningful, but they will have to be more creative in how they get it through. Creativity in message and channel will make a difference, and I am sure we will see brands doing truly inspiring work," Gomez said. 

Another reason for brands to get creative is the decline in Olympics viewership. The opening ceremony of the 2016 Olympics dipped 35% to 26.5 million viewers compared to the 2012 one in London, which drew 40.7 million viewers, the Wall Street Journal reported previously. WSJ added then that 20.7 million tuned in to watch the first night of the Olympics on NBC, a 28% dip from the 28.7 million that watched during the same period in 2012.

"The Olympics just does not generate the level of interest as seen with the World Cup or other global sporting events. Also, it is going to be really tough for audiences to see empty stadiums and no fan support, so advertisers will have to be really focused on and clever with creatives to generate engagement and convert their media dollars," Gomez added.

Echoing their sentiments was Thanendran Thanesvaran, Reprise Digital Malaysia's group commercial director and head of sports marketing, who said this would be the best time for advertisers and sponsors to run a plethora of digital activations. "There is a big chance to give fans an opportunity to totally be immersed in and connected to the games through the only channels that can deliver this promise," he said. 

According to him, brands have the chance to get ahead of the game by seeking innovative ways to move forward and leverage on digital platforms to build affinity and drive engagements. "Fans have become hungrier than ever for the excitement of live events especially since they have all been starved of it in 2020. It is an interesting time for brands to devise new opportunities integrating the mobile and digital experience so fans can engage at home," he added.

The future of live sports lies with new layers for consumer immersion combining TV to view and mobile to engage.

Without a doubt, fans will be sorely missed at the Olympics and Thanesvaran said more than sponsors, Japan would stand to lose a lot more, with multiple potential activations and a bucket load of revenue being lost.

Photo courtesy: Tokyo Olympics Facebook

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Hitting a home run: Why sponsors of axed sporting events shouldn't lay low

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