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The ongoing and expensive Olympic torch PR disaster

WHEN the Olympic torch touches down in Canberra this morning [23 April 2008], some of those holding their breath about the success of the event include major brands of the world - Coca-Cola, electronics manufacturer Samsung and Olympic newcomer, Chinese computer giant Lenovo. When the three signed to sponsor the 2008 torch relay, they had grand plans of another international celebration leading to the lighting of the cauldron in Beijing's Olympic stadium on August 8.

Fired up by the success of the 2004 global torch relay, which went through 33 world cities including Sydney and Melbourne over 35 days before making its way to Athens, there were dreams of an even grander relay linking their brands to an international celebration of the coming out of China with its 1.3 billion consumers.

At the time, few would have envisaged the publicity nightmare that the torch relay has become as it lumbers along from city to city, with organisers furiously reworking their plans, shortening routes, beefing up security, bracing for clashes with protesters and having to deal with once-eager relay runners dropping out at the last minute.

The three were prepared to pay to be part of that grand vision - far more than the millions from Coca-Cola and Samsung for the 2004 relay sponsorship rights. China's Lenovo only came into the "Olympic family" for the 2008 Games and has already announced it is not going ahead with any sponsorship post the China Games. Just how much it paid is not yet known. But given that the much more modest Sydney Olympic torch relay generated a cool $15 million in sponsorship revenue, it's not hard to speculate that the 2008 relay could have easily raised more than $50 million for international Olympic coffers.

In the official marketing report of the 2004 Games, Athens organisers waxed lyrical about the success of the global torch relay: "The Coca Cola company and Samsung presented the Athens 2004 Olympic torch relay, the first truly global torch relay in history, sharing the spirit of the Games with millions of people around the world as the Olympic flame toured 27 countries on all five land masses represented by the Olympic rings."

Add all that up and one could estimate that the amount paid for sponsorship of the 2004 relay was a lot more than the $15million generated for the Sydney relay - and go on to estimate that the amount raised for the sponsorship of the 2008 relay with the China billions in everyone's eyes was another jump up again.

The fiasco of the 2008 torch relay shows how quickly a sponsorship - even of a long-standing, trusted and strong brand - can go pear-shaped as a result of events outside the hands of the organisers or sponsors themselves. "You have to be aware that as a sponsor you cannot write the script, you can only join in," John Moore, the powerhouse behind the huge marketing success of the Sydney Games who now heads the Global Brands group, said yesterday.

Coca-Cola's annual meeting in the US last week was confronted by anti-Chinese demonstrators. One cyber commentator describes the Olympic torch as the "Coke truncheon". Executives of the company, which has sponsored the Olympics since 1928 and been involved with the torch relay since 1992, are keeping their smiles stuck on their faces, waiting for the torch to move into safer ground. "We firmly believe the Olympics are a force for good," a spokeswoman said.

But the real marketing lesson to be learned from the 2008 torch relay fiasco is that owners of a brand need to make the decisions to protect that brand - and should not be dominated by either the wishes of the sponsors or the prospect of ever higher sponsorship revenues.

Australia's senior IOC member Kevan Gosper, who is also the deputy president of the IOC's co-ordination commission for the Beijing Games, argued that the IOC had made a mistake in giving in to the wishes of Chinese organisers and the sponsors about approving the international torch relay, given the potential risks involved in anti-China protests on such a long route. "The sponsorship and broadcasting of sport is fundamental to the success of the Olympic movement," he said. "But, at the end of the day, it is the IOC that must manage the process.

"The responsibility for the big decisions, such as the torch relay, must rest with the executive board of the IOC. "That executive must be wise enough and strong enough to make judgments that, in the interests of the Olympic movement, may not be fully in tune with sponsors' aspirations. "Sponsors have been extremely valuable for the Olympic movement but, at the end of the day, they shouldn't be the drivers of decision-making.

"You cannot press the accelerator to the floor and assume that the pathway is free of obstacles. "We endanger ourselves when we take decisions that are solely driven by commercial interests. "This is where we (the IOC) might have found ourselves in difficulties." Just how expensive that lesson will be for the IOC, the Olympic brand and its sponsors will be seen in Canberra tomorrow.

From: Olympic torch relay turns into three-ring circus , Glenda Korporaal, The Australian, April 23, 2008

More at: The Australian

See also: Guardian

See also: A 12 minute film about the battle of wits between Tibetan protesters and Delhi police over demonstrating at the Olympic torch run from Journeyman Pictures


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