Serving two masters

The two-minute television spot opens in the shadow of Beijing’s Olympic stadium. A cluster of Coca-Cola-drinking teenagers spot an enormous roll of red carpet. They decide to push it down the road. As the roll gathers momentum, unraveling through the nation’s capital, the group becomes a throng.  

The red carpet, riding on this wave of public goodwill, rolls through China on a whirlwind tour before coming to a halt at the East China Sea. The crowd is momentarily stymied. Enter Yao Ming. China’s basketball star – and the biggest local name on Coca-Cola’s payroll – arrives with the Olympic torch in his hand and guides the cheering masses back to Beijing.

There are few buttons Coca-Cola doesn’t press in this bid to stimulate national fervor for the Olympics. But this ad, which aired as the torch returned to Chinese shores in early May, won’t be shown outside China.

“They usually have a single global marketing approach, but this has not been the case with this Olympics,” said Greg Paull, principal at marketing consultancy R3, which is tracking companies that are using the games in their marketing. “Laying out the red carpet would not play out well in the US or Europe.”

Different strokes
The Beijing games’ motto may be “one world, one dream,” but as far as marketers are concerned, it’s one message for China and another for international audiences.

In Paull’s view, events surrounding the March 14 riots in Tibet have intensified this need to separate international and domestic advertising strategies. The Olympic torch relay’s international leg was dogged by human rights protests, which in turn provoked an angry surge of nationalistic sentiment in China.

Now Olympic sponsors are in a bind. They don’t want to upset the Chinese authorities or the public but they fear accusations in the West that their commercial ties to the Beijing Olympics are tantamount to endorsing a government with a questionable human rights record.

Activists – particularly the Tibet lobbyists and groups calling for China to help end the strife in Darfur – have been effective in linking human rights issues with Olympic sponsorship.

 “It is a big challenge for the sponsors – they can’t please both sides,” said a Beijing-based executive at a global public relations agency, who asked to remain anonymous.

“All of the big international sponsors did some risk analysis. The Olympics in China come with some baggage and they understood there was a risk. But the rioting in Tibet was a ‘black swan,’ the worst-case scenario.”

For most of these companies, sponsoring the Olympics is part of an ongoing relationship with the International Olympic Committee (IOC). The global-level sponsors of Beijing 2008 – Atos Origin, Coca-Cola, General Electric, Kodak, Lenovo, Manulife, McDonald’s, Omega, Panasonic, Samsung and Visa – sign deals that cover several summer and winter games. Coca-Cola, Lenovo and Samsung made separate arrangements with the Beijing Olympic Organizing Committee, BOCOG, to back the relay.

CHINA ECONOMIC REVIEW asked each of the global-level sponsors for their take on how recent events have affected marketing efforts.

Questions were met with either silence, a polite “no comment” or praise for the Olympics in general that offered much heat but little light. The need to focus on athletes rather than Tibet and Darfur, and the inability of corporations to lobby governments on political issues were common themes in the sponsors’ answers. Some companies also said they had met with activist groups and listened to what they had to say.

Sophie Richardson, Asia advocacy director for Human Rights Watch, attended meetings with a variety of sponsors but claims to have seen no change in the companies’ behavior.

Damage control
As protesters in Europe barracked the Olympic torch, it was reported that Coca-Cola, Samsung and Lenovo scaled back their marketing efforts when the torch relay was scheduled for San Francisco. These reservations were firmly cast aside when the torch entered China. Indeed, the torch’s troubles overseas may even translate into renewed respect in China for sponsors who stay the course.

“Certainly, the fact that [Coca-Cola is] the sponsor of the torch relay which has become a highly nationalistic event in China, is a very good thing for [them],” said Eliot Cutler, lead partner at Akin Gump in Beijing and a member of the crisis and issues management team that the law firm has set up in alliance with Publicis Consultants.

Other sponsors are pursuing similar initiatives to Coca-Cola’s. Volkswagen’s sponsorship mandate doesn’t reach beyond China, but its online viral campaign amounts to a rallying call for torch relay supporters everywhere. Bloggers who write about the relay can attach “honking badges” to their web pages; visitors then honk the horn to play a tune. Prizes are awarded to those who attract the most honks.

Television ads released by McDonald’s in China feature local sports stars serving burgers to the public, while Adidas, a local-level sponsor, focuses on Chinese athletes’ personal journeys to the Olympics.

“Adidas has developed a clear message of athletes being supported by the Chinese people,” said R3’s Paull. “It’s a powerful and aggressive approach.”

Regardless of the torch relay’s international setbacks, money is still pouring into Olympics-related marketing as sponsors look to target Chinese consumers. But companies paying to tie their brands to Beijing 2008 are not out of the woods yet – another black swan could be lurking.

“The major challenges for the sponsors will likely come during the games,” said Aking Gump’s Cutler. “They may be faced with issues they did not anticipate.”