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Commercial crackdown campaign under way

By Liu Jie (China Daily)
Updated: 2008-08-18 11:07

Chinese audience have long been familiar with TV commercials featuring the country's sports stars such as basketball player Yao Ming or hurdler Liu Xiang.

But during ongoing Beijing 2008 Olympic Games (August 8-24), they are not appearing as frequently as before. Yao's ad slots for China Unicom and PepsiCo and Liu's for Nike and Amway are forbidden from being shown on TV.

According to the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG), from August 1 to 27, advertisements not authorized by the committee featuring athletes or coaches related to the Olympics are banned.

Strict measures

That could be a big blow to advertisers who have been banking on the Olympics to boost their brands and promote their products.

The ban is part of a range of measures introduced by the committee on June 3 to crack down on ambush marketing during the Games.

From July 11 to September 17, all prominent advertising sites in Beijing - including those at the airport, railway stations, main streets and areas around Olympic venues - will be closely monitored and priority will be given to official Olympic sponsors.

Using unauthorized five-ring logos, selling unauthorized versions of the fuwa mascots and trying to persuade the public a company is part of the Olympic family through advertising is subject to the crackdown.

Any violator with illegal advertising or using Olympic symbols without authorization will be punished.

Ambush advertising practices by individuals are also banned. (The term ambush or "guerrilla" marketing was coined by former American Express boss Jerry Walsh, referring to companies that are not official sponsors but hope to gain a halo effect from the Games.)

For example, if a row of spectators is found to be wearing the same logo on their clothes at a Beijing Olympic venue, they will be asked to conceal the brand names.

Similarly, people will not be allowed to take drinks into venues and they are allowed to buy only Coca-Cola or Coke products, the global partner of the International Olympic Committee (IOC) within the venues.

"While promoting a company's products or services, advertising agencies should not make people think the company has any contact with the Olympics if it is not a sponsor," the BOCOG's marketing department deputy director Chen Feng says.

Sponsors pay up to $65 million for the right to affiliate their brand with the Olympics, and they do not want their advertisements eclipsed by nonpaying competitors. The job of policing the marketing landscape is generally left to the host country, the IOC and national organizing committees.

Since China won the right to host the Games seven years ago, the government, the IOC and the BOCOG have been building legal barricades to try to prevent unlicensed companies getting illegal benefits.

The Beijing Games has 12 global sponsors in the top partners program, with contributions totaling around $900 million. And an additional $1 billion is from local marketing contracts with 11 partners of 2008, 10 sponsors, 15 exclusive suppliers and 15 suppliers.

Winners and losers

For sure, sponsors are welcoming the ban.

"We really rely on them to monitor and correct those problems," says Petro Kacur, spokesman for Coca-Cola. "It's not a role that we play."

However, in addition to ambush marketers, some local businesses are rather frustrated.

VisionChina Media, a Beijing-based company that specializes in selling advertising on buses and subways in 16 of China's biggest cities, a perfect place for Olympics-themed campaigns, had been expecting a bonanza this summer.

The appeal of the Beijing Games has helped drive VisionChina's Nasdaq initial public offering last December, when the company raised $108 million. It has been also anticipating a big sales increase for the third-quarter this year due to the Games and starting from May 1 the company has raised advertising rates by 50 percent in Beijing.

"In the coming 15 years, this is the only chance we can increase our revenue in a very short period of time," Alfred Tong, chief marketing officer of VisionChina, said in April.

But, the new rules issued by the BOCOG invalidated contracts that advertisers had signed with the firm in the past year.

Advertisers, including VisionChina, must put their ad buys back into a pool and resubmit their bids. Olympic sponsors bought advertising bundled into packages of airport, bus shelter, and subway advertising at capped rates in the order of their sponsorship rank.

When Beijing won the rights to host the Olympics in 2001, it promised the IOC that it would limit increases in advertising rates for official Olympic sponsors to no higher than the average inflation rate. So, outdoor advertising companies must charge Olympic sponsors a fixed rate based on last year's advertising rate plus the rate of inflation.

Business engine

Ambush marketing has been rife in recent years.

Small businesses have been putting up Olympic-related decorations outside the venues or in shops.

There are a variety of ambush marketing tactics, ranging from "hit squads" of company representatives giving away free products, advertising near the venue, to handing out unofficial programs or unfurling banners within the venue.

At the 1996 Games in Atlanta, Nike placed advertisements near the stadiums and established a "Nike Village", though it was not an official sponsor. This year it has already launched online videos highlighting its shoes for Beijing.

Visa Inc sponsored the 1994 Winter Olympics in Lillehammer, but it archrival American Express ran a campaign saying Americans did not need a "visa" to travel to Norway.

Some regard ambush marketing as parasitic and ethically dubious; others say it is the product of imaginative thinking.

The BOCOG's Chen stressed on June 3 that any violator would be punished, though he did not elaborate on what the punishments might be.

"Given the strong authority rule in China, I think they (the BOCOG) actually have a better chance of controlling it than places like Athens or Atlanta," says Seth Grossman, communications planning director for Carat China, a media agency under international market survey and analysis firm Aegis Group.

He cites Li Ning's case as an example. The leading Chinese sportswear company had signed an agreement with Olympic Sports Channel, affiliated with State-owned China Central Television (CCTV). Under the deal, journalists, presenters and guests appearing in the studio would wear Ling Ning's clothes with visible logo in the whole year of 2008.