Ambushing China and the Olympics

Generally defined, ambush marketing is marketing and promotional activities that seek an association with an event, generally related to sports, without the authorization or consent of the organizer of the event and, naturally, without paying the organizer any fees. When pulled off well, the ambush marketer can receive virtually the same benefits as an official sponsor who spent millions for the status. But if the activities cross the line and infringe on the trademarks and related intellectual property of the Olympic organizers, the ambusher is exposed to substantial damages. Making such marketing even riskier, local venues have passed special legislation to thwart would-be ambushers.

When the line between legitimate sponsorships and ambush marketing is crossed, the ambusher misappropriates intellectual property and unfairly capitalizes on the goodwill associated with the event. The result confuses the public into thinking that the ambush marketer is an official sponsor of the event. In addition, with or without specific intent, the ambush marketer dilutes the impact on consumers enjoyed by the official sponsors. The ambusher eliminates the competitive edge the official sponsor enjoys.

By diverting attention away from competing official sponsors, the ambush marketer also reduces the effectiveness of the official sponsor's marketing efforts. It therefore destroys the benefits the official sponsor hoped to achieve, making its investment worthless. In other words, the official sponsor has wasted its money.

So what form does ambush marketing take? Some of the classic approaches include running simultaneous promotions, including efforts like free product distribution, billboards surrounding the venue, or extremes like flying blimps over events with the ambusher's logo emblazoned on the side.

But the more insidious forms of ambush marketing are subtle and, quite often, perfectly legal. Perhaps the best known approaches are to license rights from sub-categories. For example, for many years, country teams could be separately sponsored. Thus, the ambush marketer might sponsor the U.S. Bobsled Team, paying a much lower sponsorship fee, but could still enjoy seeing its logo on the U.S. Bobsleds used in the games. Meanwhile, the official sponsor of the Olympics may have its sponsorship logo relegated to a far less visible place in the games. Another method is to box out the official sponsor by buying as much of the media surrounding an event as possible. After all, if the ambush marketer hasn't paid the official sponsorship fee, and still has plenty of dollars to sink into media buys – and that's entirely legal.

Another way an ambush marketer might achieve its goals is to adopt logos that are similar to those of the event. In response, organizers of major events like the Olympics or World Cup require that the country that has been granted the rights to host the events pass special legislation preventing such activities.

Suffice to say that such requirements are becoming a centerpiece of protecting official sponsors, even to the point of removing relatively common terms from use by anyone other than an official sponsor. All this raises the question: Are hosting countries granting too much to the organizers and engaging in what economists might view as anti-competitive regulation that can actually hurt consumers? Moreover, can an organizer and the host country really prevent an ambush marketer from using the names of cities or the conduct of promotions like sweepstakes that award free tickets to the event that were properly purchased by the ambush marketer?

For the 2006 Winter Games, Italy banned the use of any Olympic symbols by non-sponsors, even going so far as to order a local Turin restaurant that had long been called the Olympia to remove its name.

But the organizers didn't stop there. Helmets with non-sponsor logos were covered with tape, reporters were forced to keep non-sponsor beverages under their desks, and spectators were told to remove hats and jackets that bore emblems of non-sponsors.

But was that enough? It didn't stop retailer Target from sponsoring a train that brought spectators to Turin to see the Games. The train, emblazoned with Target's bulls eye logo, was seen my millions. Hats and noise makers with Target's logo were handed out and found their way throughout the venue. And the Target train is but one example where a non-sponsor associated itself with the Olympics in a perfectly legal manner. Target didn't ambush anyone – or did they?

For some advertisers, a favorite Olympic sport has long been finding ways to edge their brands into the Olympic spotlight without having to pay the multimillion-dollar fee to become an official sponsor.

At the last World Cup, Lufthansa and Europcar used soccer balls as the centerpiece of its advertising campaigns that surrounded the games. Was this a coincidence, or an intentional effort to capitalize on the games without paying a fee? And even if it was ambush marketing, are such things truly damaging to the game organizers or official sponsors?

The International Olympic Committee forbids advertising altogether at official sporting venues, and allows sponsor logos only in specific places. Athletes are only allowed to wear garments with one small (three inches or less) trademark (a name or symbol), and non-sponsors may not advertise in sight of the cameras at all.

To enforce these rules, scores of deputized volunteers patrol events with duct tape in hand, covering offending logos on ski competitors' helmets and ski jackets, spectators' hats, reporters' laptop computers, even bathroom facilities.

In addition to protecting the brand investment of the official sponsors, Olympic officials claim the rules are also designed to contain the overall commercialism of the Olympics.

The media, however, are as quick to cover the brand-wars as they are the sports competitions. Witness a few examples from the 2006 Games in Turin, Italy:

• GoldenPalace.com, the online casino known for its advertising antics, successfully unfurled a banner several times and had to be repeatedly asked to remove it, the Associated Press reported. A naked streaker hyping GoldenPalace also appeared at the Curling competition.

• Hockey legend Wayne Gretzky, the executive director of Canada's men's hockey team had a deal with the Roots clothing company. So he showed up for early-round games displaying Roots logos. However Hudson Bay Co. was the official Olympic clothing sponsor and Mr. Gretzky was asked not to wear Roots attire to subsequent events.

• A reporter had to take her sunglasses off at a news conference because the logo was deemed to be visible. Another reporter was asked to place her branded bottle of water out of sight of the cameras.

Can we expect the same silliness in Beijing?

In the rush to host the 2012 Olympic Games, London and the United Kingdom are prepared to go further than ever before. Serious discussions are underway to outlaw use of words like “games”, “medal”, “gold”, “silver”, or “bronze” except by official sponsors. Making reference to the year 2012 will be the exclusive domain of official sponsors, as will references to “summer” in any way associated with the games. This will create a very tense fight between the event organizers and the advertising industry's concerns that aggressive restrictions will impede perfectly legal competition. It's one thing to protect logos and trademarks. It's an entirely different and unacceptable thing to remove common words and dates from permitted language.

So where is China among all this controversy?

When China was awarded the 2008 Olympics it took only limited steps. Beijing adopted restrictions on the use of Olympic-related trademarks as protection against ambush marketers. The China State Council took further steps and established a protection plan for Olympic symbols, emblems, mascots, and descriptors. Most importantly, the Council adopted a standard that prohibits “implied commercial purposes”. While one can only speculate how “implied commercial purposes” might be administered, it does give an official sponsor authority to complain to the State Council should it believe it is being victimized by an ambush marketer. China authorities, for example, did stop an unauthorized ambusher from associating itself with the 2010 Expo.

Finally, the organizing committee has adopted strict regulations on advertising within any venues or the cities that are hosting the events. What ambush marketers might do outside of venues or cities that are hosting parts of the games, however, remains to be seen. Of one thing we can all be certain. Ambush marketers are ingenious and will find ways to reach audiences.

Hundreds of millions of consumers will be glued to their television sets watching the Beijing Games, witnessing a much-changed and modernized China. But much can happen to derail the opportunity for China to shine on the world's stage. While human rights and freedom of expression are more likely to be in the spotlight, the negative effects of ambush marketing cannot be ignored. China must find a balance between healthy competition and unfair marketing. It can do so through its sponsorship with the IOC and the official sponsors. But it must not blind itself with regulation and legislation as aggressive and suppressive as what we saw in Turin and will most likely see in London.

*About the author

Doug Wood is a member of Reed Smith's Executive Committee and the firm's Advertising, Technology & Media Group, has more than 30 years' experience representing national and multinational companies in advertising, marketing, promotions, unfair competition, intellectual property, and e-commerce matters. Doug serves as legal adviser to several worldwide advertising industry trade organizations and is General Counsel to both the Association of National Advertisers and the Advertising Research Foundation. He is also the chief negotiator for the industry in relations and collective bargaining with the Screen Actor's Guild, the American Federation of Television and Radio Artists, and the American Federation of Musicians. In addition, Doug is the founder and Chairman of the Global Advertising Lawyers Alliance (GALA), a network of independent law firms, located in more than 50 countries, that have expertise in advertising and marketing law.