Ambush Marketing essay

Ambush marketing is a marketing tool, which may lead to serious marketing success. Ambush marketing emphasizes the importance of shows in big business promotion, and the role of big business in creating shows. Sporting events represent just one example of the way ambush marketing can work in real world business environment. Sponsorship becomes secondary as soon as ambush marketing tools are applied in practice. Ambush marketing is the use of a Sporting Event, in marketing, while not sponsoring the event.

The use of the event is done to associate the company with the event, however, in most cases a rival company will be the official sponsor of the event. This is done in full legality and does not break any laws. Ambush marketing is an extremely flexible means of using shows in business promotion. Ambush marketing can take variety of forms, and be adjusted to particular marketing situations. However, this form of marketing strategy generates numerous legal and ethical issues. Sponsors claim discriminative character of ambush marketing approaches.

Simultaneously, ambush theory offers a list of solutions to tackle ethical and legal issues. A Great, yet hypothetical, Example of ambush marketing would be an American Superbowl, which is usually sponsored by Budweiser Beer. Miller beer traditionally associated with the game is not its official sponsor. In reality, Miller uses the benefits of Budweiser’s sponsorship to promote its own trademark, without breaking the legality of the sporting event. Why this trend? Sport is a big business and big businesses are heavily involved in sports.

Athletes in the major spectator sports are marketable commodities, sports teams are traded on the stock market, sponsorship rights at major events can cost millions of dollars, network television stations pay large fees to broadcast games, and the merchandising and licensing of sporting goods is a major multi-national business. Although sports have had a commercial component to its operation since its formative years tracing back to Ancient Greece, in no previous time have we seen the type of exponential growth in the as occurred in the past decades.

This is mainly due to the sophistication of advertisement such as the purchasing of TV and radio slots and billboards in prime locations. It is important to note that sponsorship is not the first financial resource of sport organisations. The main sources of funding for major sport and mega events are TV broadcast rights, sponsoring comes in second and ticketing third . Sponsoring grew in line with the phenomenal increase in TV demand for sport events. One of the main reasons for the emerging yet inevitable trend of Ambush Marketing is to this hype surrounding famous events such as the Olympics, FIFA World Cup and the NFL Super Bowl.

Due to the high costs of sponsoring such events, smaller companies cannot afford to spend the amounts larger conglomerates and multinational companies like Coca Cola, Samsung, McDonalds, Nike, and Kodak pay for getting their sponsorship, and this is one of the basic reasons that is perpetrating ambush marketing. Even larger companies are limited to the amount of events they can sponsor since the sponsorship fees do not include the expenses of the advertisement such as TV, print, outdoor ads, and promotional activities.

For the 1996 Olympic Games in Atlanta, the Coca-Cola Company forecasted their expenses to about $60 million for commercial air time on NBC’s Olympic telecasts in addition to the $40 million the company paid for its worldwide sponsorship rights. Common Forms & Strategies Ambush Marketing takes many forms. One main form commonly used is known as Association Ambushing. This is when the non-sponsor gives the impression of being an official sponsor by using words or symbols associated with the event.

For example, during the 2002 Winter Olympics in Salt Lake City, Anheuser-Busch was the official sponsor and Schirf Brewery, a local and small company, came up with a fairly clever idea of marking its delivery trucks with “Wasutch Beers. The Unofficial Beer. 2002 Winter Games. ” Another main type of ambush marketing is known as Intrusion Ambushing, which is when the non-sponsor piggybacks on the media and spectator exposure of the event for instance by advertising near event venues. Some of the most commonly, but not restricted, employed ambush marketing strategies are as follows:

1. Sponsoring the broadcast of the event: Kodak’s sponsorship of the ABC broadcasts of the 1984 Los Angeles Olympics when Fuji was the official IOC sponsor.

2. Sponsoring sub-categories within an event and exploit the investment aggressively: During the 1988 Olympics at Seoul, Kodak secured the worldwide category sponsorship for the Games, while Fuji obtained sub-sponsorship of the U. S. swimming team.

3. Making a sponsorship-related contribution to a players’ pool: Ian Thorpe was sponsored by Adidas when Nike was the official clothing supplier for the Australian Olympic team.

Thorpe was even photographed with his towel draped over Nike’s logo at a medal presentation ceremony to protect his personal contract with Adidas. 4. Engaging in advertising that coincides with a sponsored event: Intense advertising done by a competitor during or around a sponsored event such as booking billboards near to event venues to fool consumers into thinking there is a link to the event. An example of this was during the 1992 Olympics; Nike placed large murals of USA basketball team members Michael Jordan and Charles Barkley on the sides of buildings in Barcelona.

Nike was not an official sponsor of the Games. 5. Pulling a stunt: This is when a small amount of people pull a high profile stunt to attract attention. For example, during an Australian-New Zealnd rugby match in 2002, two naked men streaked onto the playing field “wearing” a painted-on Vodafone logo, while Vodafone was not a sponsor. Effectiveness Ambush marketing, undoubtedly has been found to be quite effective in its success in creating the appearance of being a legitimate sponsor. In practice, it appears that the public does not properly identify the official sponsors.

On corporate sponsorship, Tony Meenaghan explained in an article for the Sloan Management Review, “By sponsoring an event or providing a budget for an event’s broadcast, a sponsor can generate audience awareness while simultaneously creating associations of the event’s values in people’s minds,” Further on he states, “An ambush marketer can associate with a major event without large-scale investment in securing rights and thereby fulfill brand awareness and image objectives at low cost—benefits usually available only to the official sponsor,” “It also generates goodwill, which is a consumer’s natural reaction to support for an activity of which he or she approves.

At the very least, it creates consumer confusion, thereby denying the legitimate sponsor clear recognition for its sponsorship role. ” Meenaghan claimed that ambush marketing “simultaneously reduces the effectiveness of the sponsor’s message while undermining the quality and value of the sponsorship opportunity that the event owner is selling. ” In a 1994 survey by the Wirthlin Group, a corporate image research organization, showed that only 12 percent of American adults were able to identify Coke as an Olympic sponsor, despite its’ 66-year affiliation. Furthermore, no other Olympic corporation sponsor had more than 3 percent recognition.

An outstanding example on the effectiveness of ambush marketing that is still seen as the ambush of all ambushes is Nike’s marketing campaign for the 1996 Atlantic Olympics. Nike plastered the city in billboards, handed out swoosh banners to wave at the competitions and constructed an enormous Nike center overlooking the stadium. Following the 1996 Atlanta fiasco, many thought Nike had been an official sponsor of the games. In December 2001, a study found that, from a list of 45 likely sponsors of the 2002 World Cup, 20 percent of those polled picked Nike. Ethical & Legal Issues The main question that arises is whether or not the practice of ambush marketing is ethical, illegal, or simply smart business practice.

In reality, marketing has never been a gentle industry to begin with. Ambush marketers refer to the event and to their own names and products in an ingenious and creative manner, without using registered trademarks, logos, and slogans so in most cases they manage to circumvent the law. This puts the legal position of ambush marketing practices in an unclear position. Referring back to the Nike example during the 1996 Atlantic Olympics, Simon Pestridge, Nike’s brand manager explains diplomatically in an interview with MSNBC following the event, “We play inside the rules and we bring a different point of view that’s true and authentic to sport. “

Corporate sponsors and event organizers regard the “parasitic” or piggyback tactics, a term often used by aggrieved event organizers and their sponsors, as unethical. On the other hand, ambush marketers argue it is a fair game. Merrill Squires, managing partner of the Dallas-based Marketing Arm, said in a 1999 interview with ABCnews. com, “The weak link is marketers who sign a sponsorship deal and don’t look at it carefully. They need to negotiate for every potential right to block out competitors. ” Tackling the Issue Learning from experience, sponsors and event owners have picked up on several strategies for countering ambush marketing:

1. Pressurize event owners to protect their events. The International Olympic Committee (IOC) seeks to block ambushing by controlling images, official license souvenirs, and by offering first option to official sponsors on other promotional opportunities.

2. Link event and broadcast sponsorship. This includes combined packages of event sponsorship, broadcast sponsorship and advertising time around television broadcast of the event.

3. Anticipate potential competitive promotions. Sponsors must investigate the terms of sponsorship contract, what rights co-sponsors have and if they are in the same industry.

4. Exploit the sponsorship rights secured. Sponsors should launch a well-rounded marketing communications campaign and exploit the association with the event fully.

5. Resort to legal action, especially if a non-sponsor uses marks associated with an event. There have been several major attempts to crackdown on ambush marketing. One major attempt was the Sydney’s Solution also known as the Sydney 2000 Act, which went further than ever in trying to counter ambush marketing.

The highlights of the Acts passed were the Indicia and Images Act and Olympic Arrangements Act. The Indicia and Images Act prohibited the use of phrases and images from unlicensed commercial use, which was broadly defined that would suggest a connection with the Sydney 2000 Olympic Games. The Olympic Arrangements Act prohibited any selling or distribution of articles in public places within a 3km radius from the event.

There were several non-sponsors who were still able to legally market their brand around the event. In the end, Sydney went further that ever in trying to crackdown on ambush marketing strategies, but were still found to be inadequate for responding to ingenious marketing strategies. It is clear that the control of ambush marketing requires additional strategies. In the future as the Beijing Olympic Games are approaching in August 2008, the International Olympic Committee claims they are preparing to counter ambush marketing. The IOC plans to safeguard its sponsors’ interests inside the venues by making sure no ambush marketing campaigns are being picked up by television cameras.

Non-authorized beverages will be banned from the venues as well as t-shirts and products featuring non-sponsor corporate names linked with the Olympic Games. Conclusion If Ambush marketing provides smaller companies with a chance to promote themselves, does that mean that ambush marketing approaches are legally and ethically misbalanced?

Does that mean that smaller companies illegally use the official sponsorship benefits to promote their trademarks? There is no definite answer to that question. One thing is clear: Ambush marketing remains one of the most effective marketing tools in contemporary business and sports. As long as sports turn into business, and business makes money in sports, ambush marketing will bring substantial financial profits to those who are aware of its benefits.

The coming Olympic Games in Beijing will show the effectiveness of anti-ambush procedures which the IOC plans to implement, but companies will still seek new means of advertising themselves without sponsoring big shows. Ambush marketing is an evasive tool of self-advertising; as long as it takes unclear legal position, ambush marketing strategies will keep flourishing across all levels of promotion in business. Ambush marketing is an ambiguous means of companies’ self-promotion. On the one hand, it helps smaller companies gain a better market share and make their trademarks recognizable to potential customers. On the other hand, larger sponsors view ambush marketing as the means of undermining their marketing stability.

Confusion is the third, and probably, the most important effect ambush marketing causes on consumers. In this complicated marketing environment, competitors should be more careful when signing sponsorship deals. Legal responsibility will eliminate the majority of ambush marketing threats which sponsors should address on their way towards success and recognition.

Bibliography

1. Sauer, Abram. “Ambush Marketing Steals the Show. ” May 27, 2002. <http://www. brandchannel. com/features_effect. asp? pf_id=98>.

2. Meenaghan, Tony. “Ambush Marketing—A Threat to Corporate Sponsorship. ” Sloan Management Review. Fall 1996. <http://www. answers. com/topic/corporate-sponsorship? cat=biz-fin>.

3. “THE MEDIA BUSINESS: ADVERTISING; In ‘trolling for sponsors,’ organizers of the 1996 Games are playing against the clock — and trailing. ” The New York Times. 31 August 1995 <http://query. nytimes. com/gst/fullpage. html? res=990CEFDC113EF932A0575BC0A963958260>.

4. Garrigues, Cristina. Ambush Marketing: A Threat to Global Sponsored Events? 26 March 2004. <http://www. twobirds. com/english/publications/articles/Ambush_Marketing_Sponsored_Events. cfm#_ftn1>.

5. http://www. usp-age. com/flash/2006/jul06/marketing_battle. swf.

6. http://www. austlii. edu. au/au/journals/MurUEJL/2001/10. html.

7. http://www. accessmylibrary. com/coms2/summary_0286-9614696_ITM.

8. Shah, Tina. “Ambush Marketing.” November 2004 http://www. advancedge. com/archives/nov04/MBArk_ambush_marktng. pdf.

9. ALSO NOTE ABOUT RAPPAPORT DOCUMENT Wei L, Kretschmer M. , Ambush Marketing: A study of strategies and legal responses, ISLR Pandektis, Vol. 5:3, 2004. Davis R. N. , Ambushing the Olympic Games, ISLR/Pandektis, Vol. III Nr. ?, p. 7.

10. Page name: Ambush marketing, Author: Wikipedia contributors , Publisher: Wikipedia, The Free Encyclopedia. , Date of last revision: 28 April 2008 04:46 UTC , Date retrieved: 30 April 2008 15:14 UTC , Permanent link: http://en. wikipedia. org/w/index. php? title=Ambush_marketing&oldid=208688867 , Page Version ID: 208688867.

FOOTNOTE : According to the International Olympic Committee, the revenues generated from these sources for the period from 2001 until 2004 accounted for respectively 53%, 34% and 11% of , the remaining 2% coming from other licensing activities, http://www. olympic. org/uk/organisation/facts/revenue/index_uk. asp;

This is roughly true in relation to football as well. According to FIFA’s 2006 Financial statements, 58% of its revenues in 2006 came from TV broadcasting rights and 24% from marketing rights, i. e. sponsoring, http://fr. fifa. com/mm/document/affederation/administration/2006_fifa_ar_en_1766. pdf; FIFA’s overall yearly revenue for the period 2003-2006 reached CHF 3. 238 billions.