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Will Marketers Miss Out on the Gold in this Year’s Olympic Games?

The 2020 Tokyo Summer Olympics was the first major, worldwide sporting event to become the victim of the COVID-19 pandemic. While the world’s producers are still assessing the damages of the virus on product distribution chains and the massive disruption of hospitality and transportation providers, the organizers of the Tokyo Games are struggling to keep the postponed Games on track for July 23, 2021 debut. While public health and safety concerns continue to trump any consideration of market activities, the significant impact of the disruptions posed by last year’s postponement remains a serious threat to the global economy.

It all began way back in 776 BC and became a staple of live entertainment for more than a thousand years. For some reason, mostly lost to history, the ancient Olympic Games took a hiatus until the modern version was reignited in Athens Greece in 1896. Since then, the Modern Olympic Games have been held every four years in locations around the world. The 2020 Olympic Games is the first Olympic event to be postponed due to a global health threat and is the first time the Games have been held in Tokyo in fifty-six years.

The Olympic Games have become a mega advertising and sponsorship opportunity for the world’s marketers. The National Broadcasting Company (NBC), exclusive owners of Olympic broadcasting rights thru 2032, is producing more than 7,000 hours of coverage which will be delivered to audiences via multiple digital platforms as well as traditional television. The cost of ads will range between $1 million to more than $100 million. NBC Universal had received more than $1 billion in national advertising commitments prior to the postponement of the Games last year.

This year’s delayed Games will introduce significant changes in digital marketing, allowing campaigns to access a broader range of devices, channels, and apps. The changes will allow digital marketers to target more specific audiences and more easily measure a campaign’s success. Digital media is expected to account for 60 percent of advertising spend for this year’s Olympic event. New technologies are also expected to produce less expensive advertising avenues for traditional sponsorships. Advertiser sports sponsorships were expected to generate more than $48 billion worldwide, and Olympic partners Coca-Cola and P&G were planning on doubling their spending to $1.95 billion worldwide. Japan’s domestic brands Canon, Asahi, and Fujitsu had announced an investment of $3.33 billion prior to the postponement of this Olympiad, four times higher than in Rio’s 2016 Games.

However, a recent surge in the virus in Japan has prompted organizers to make significant changes to attendance criteria. Most of the events will take place in Tokyo Japan; a country placed off-limits to travelers from more than 159 Nations around the world. The Olympics will feature 33 sports at 339 events across 42 venues that are limited to 50 percent of capacity. Local fans will be discouraged from shouting or speaking loudly and everyone in attendance must wear a face mask at all times. Talk about putting a damper on celebration and revelry!

The Olympic Games is usually a priority event for advertisers who freely open advertising budgets to spend big money on Olympics-themed campaigns, often pitched by mega-star athletes. Leading brands often spend more than $100 million for a sponsorship opportunity, months or even years in advance. But this year’s postponed event is yielding considerable concern from even the largest and most experienced brands. Aimee Howells, head of the sports marketing division of Takumi said, “We would usually see multiple sponsors launching media campaigns in the lead up to the Games, but unsurprisingly the media and PR buzz that preceded past Olympics is now largely absent as Japanese organizers battle to save the Games. One thing the pandemic has really highlighted over the past year and a half is that when it comes down to a choice between the economy and public health, there is only one clear winner.”

A survey by Japanese newspaper publisher, Asahi Shimbun, found that “over 80 percent of the Japanese public wanted the Games either postponed or canceled entirely.” For many brands, being associated with an event that comes with such a negative public outlook is cause for significant concern and hesitation. Maarten Gijsenberg, associate professor of marketing at the University of Groningen, says, “I imagine that the positive vibe and atmosphere which is normally associated with the Olympics is going to be much smaller this year. Things are very unpredictable this year, so it is likely going to be a much more risky investment for marketers than under normal conditions.” Despite all concerns, Proctor and Gamble (P&G) decided to press forward with their planned campaign, named “#LeadWithLove”, earlier in the year.

Adaptability is once again an organizational trait that will be in vogue with small to large players in the 2020/2021 Olympic marketing game. “The key will be to adapt marketing strategies to suit existing restrictions and consumer behaviors and preferences,” concludes Takumi’s Aimee Howells. Perhaps the overwhelming value of gold in the delayed Games of 2021 will be realized by the participating athletes.