The Pros And Cons Of Ambush Marketing
In recent years, our brand has not been reaching its full potential due to intervention from other companies. Ambush marketing is becoming increasingly popular during major sporting events, while at the same time it is becoming more and more difficult to monitor. Our brand is one of our most important assets, and we need to protect it.
This report is designed to show the recent increase in ambush marketing, and how it can devalue official sponsorships of major sporting events. In recent years, companies have been leveraging themselves against competitors by portraying their brands as sponsors of events when they have not paid to associate themselves with the event. This practice of ambush marketing is illegal and this report is emphasizing …show more content…
the importance of brand protection.
This report is divided into 4 sections including:
1) A brief history of ambush marketing
2) Current analysis of how it affects Adidas
3) Examples of ambush marketing
4) Recommendations for future marketing strategies, using the 2014 World Cup as a focal point.
Ambush Marketing History
Ambush marketing is a marketing technique brands use to associate themselves with a particular event. In fact, brands that use this technique do not pay for the right to be officially associated. Ambush marketing can be seen during large-scale events such as the Olympics, World Cup, and the Superbowl. Companies attempt to leverage themselves against competitors without having to pay to be an official sponsor. Ambush marketing can be seen in all industries around sports.
In an article from the Wall Street Journal (WSJ), in 1992 during the summer Olympics, American Express bought ad space and ran commercials saying, “You don’t need Visa to get you there.” Visa was the official credit card of those summer games. AMEX used their time on TV to show viewers that they were associated with the summer games, and they used their time to leverage themselves over Visa, who paid millions to be considered an official sponsor. This strategy causes other companies to “jump on the bandwagon” and try to leverage themselves as well, while it causes companies who are official sponsors to back out of any future contract due to the lack of …show more content…
advantage. Ambush marketing is difficult to regulate, because in a free market companies are allowed to advertise and promote their products to the best of their ability. However, in recent years some companies have been taking advantage of the system. Although regulation is tough, it needs to be more strongly enforced if events want to keep their costs down by having official sponsors.
Current Anaylsis
What is ambush marketing?
Ambush marketing takes place when a company attaches itself to an event without paying for the official sponsorship. They do not use the event logos or trademarks; they just make themselves appear to consumers that they are attached to the event. The goal of an ambush marketer is to make consumers believe that their particular brand is an official sponsor of the event because the consumer sees the company’s ads or products near or at the event.
Why do companies use ambush marketing?
Companies use ambush marketing because it is cheaper and sometimes more effective than becoming an official sponsor of an event.
They do not have to pay the huge fees associated with sponsorship and are sometimes able to trick consumers into thinking that they are an official sponsor of that event. Companies can take the money they save from not paying the sponsorship fees and put it towards creative marketing campaigns or use it to revamp current campaigns. Another reason that companies use ambush marketing is that it is very difficult to be proven guilty in court. Therefore, many official sponsors are reluctant to take complaints or allegations of ambush marketing to court. Ambush marketing is technically illegal, but very few cases have actually gone to
trial.
Examples of Ambush Marketing
How does ambush marketing affect competitors? Examples Ambush marketing is detrimental to companies who are actually the official sponsor of events because it weakens the bond in the consumers’ minds between the official sponsor and the event. Consumers may believe that the company employing ambush marketing is actually an official sponsor because they see that company’s logo or products associated with the event. Companies pay large amounts of money to called official sponsors of events such as the World Cup and for the ability to use the World Cup name and logo in their advertisements. Ambush marketers seek to make consumers forget about the official sponsor and instead associate their products with the event.
In November of 2010, Captain Morgan allegedly pulled off an ambush-marketing stunt during a Philadelphia Eagles game. After the Eagles’ tight end Brent Celek caught a touchdown pass, he posed in the Captain Morgan stance with the cameras focused on him. The NFL was outraged when they found out about what had happened. NFL spokesman Greg Aiello said, “Every league has the same rule. … It’s come up before, companies trying to use our games and then players for ambush marketing purposes.” The NFL has been very strict in allowing companies to enter into agreements with players, because they want to preserve the integrity of the league.
An example of ambush marketing at the World Cup occurred at the 2010 World Cup when the Dutch brewery Bavaria sent 36 blonde women dressed in orange mini-skirts into the World Cup, even though Budweiser was the official beer sponsor of the World Cup. This stunt earned Bavaria worldwide media coverage; when you Google “World Cup beer sponsor,” three of the first ten results are about the ambush marketing of Bavaria, including the first result.
When our competitors ambush market events we sponsor, we lose a significant margin of recognition and awareness that we would have gained otherwise. These losses stunt growth and result in inefficient costs that do not boost sales at the intended level, in effect lowering profits. Our sales have increased steadily over the past five years, but net income has room for improvement. 2008 net income fell from €644 million to €243 million in 2009. The reason for this fall was a drop in operating profits. Though net income increased to €567 million in 2010, we have not fully recovered. Since this is a global company, we must be aware of how each separate market is affected by ambush marketing.
Western Europe contains the most abundant and loyal customers to Adidas, contributing to nearly 30% of total sales. All other markets, aside from North America, have much lower sales figures. Developing markets, if shaped effectively, are most likely to adopt are products at a high rate. Citizens in these areas will decide what products to buy based on quality, innovation, availability, and perception. Sponsoring events such as the 2010 FIFA World Cup have proven capable of spiking credibility and growth. Spain, a team we sponsored, won the World Cup and the adiZero F50 was the top scoring cleat in the event. By the end of 2010, the Adidas Football Facebook page skyrocketed from 300,000 members to over 3 million. With so much potential for extreme growth, perfecting a brand protection strategy is paramount. (Adidas Annual Report)
Future Recommendations
Recommendations for Adidas at 2014 World Cup
We should be concerned about ambush marketing at the World Cup in 2014 because our investment in the event is significant and needs to be protected. Investigating Brazil’s laws could provide helpful insight. Research of Brazil’s policies on ambush marketing will help us utilize the most effective strategies in preventing and pursuing ambush marketers. At the event, we should purchase billboards not only at the venues but also in the cities surrounding the venues so that the Adidas brand image is constantly visible to consumers. In order to protect our brand, any slogans or advertising designs in ads should be trademarked if possible so that competitors cannot try to use any similar ideas. During the 2010 World Cup, Nike featured a campaign involving soccer superstars followed by the tagline, “Write the Future.” Although Nike was not directly affiliated with the World Cup, many consumers believed that they were because of their strong alignment to the event. We need to prevent these kinds of ads from catching on and depreciating interest in our brand. A strong television campaign of our own is vital because the World Cup will be broadcast all over the world, and television is a major vehicle of ambush marketing. We need to keep a watchful eye out for competitors will likely buy ad space during airtime of the World Cup. Viewers should know without a question which companies officially sponsor this event. Adidas is the only company in the sporting goods sector allowed to use World Cup trademarks in advertisements, and needs to take advantage of that. After the games, the impression of Adidas as an official sponsor should be stamped into the minds of soccer fans all across the world.
This report is designed to show the recent increase in ambush marketing, and how it can devalue official sponsorships of major sporting events. In recent years, companies have been leveraging themselves against competitors by portraying their brands as sponsors of events when they have not paid to associate themselves with the event. This practice of ambush marketing is illegal and this report is emphasizing …show more content…
the importance of brand protection.
This report is divided into 4 sections including:
1) A brief history of ambush marketing
2) Current analysis of how it affects Adidas
3) Examples of ambush marketing
4) Recommendations for future marketing strategies, using the 2014 World Cup as a focal point.
Ambush Marketing History
Ambush marketing is a marketing technique brands use to associate themselves with a particular event. In fact, brands that use this technique do not pay for the right to be officially associated. Ambush marketing can be seen during large-scale events such as the Olympics, World Cup, and the Superbowl. Companies attempt to leverage themselves against competitors without having to pay to be an official sponsor. Ambush marketing can be seen in all industries around sports.
In an article from the Wall Street Journal (WSJ), in 1992 during the summer Olympics, American Express bought ad space and ran commercials saying, “You don’t need Visa to get you there.” Visa was the official credit card of those summer games. AMEX used their time on TV to show viewers that they were associated with the summer games, and they used their time to leverage themselves over Visa, who paid millions to be considered an official sponsor. This strategy causes other companies to “jump on the bandwagon” and try to leverage themselves as well, while it causes companies who are official sponsors to back out of any future contract due to the lack of …show more content…
advantage. Ambush marketing is difficult to regulate, because in a free market companies are allowed to advertise and promote their products to the best of their ability. However, in recent years some companies have been taking advantage of the system. Although regulation is tough, it needs to be more strongly enforced if events want to keep their costs down by having official sponsors.
Current Anaylsis
What is ambush marketing?
Ambush marketing takes place when a company attaches itself to an event without paying for the official sponsorship. They do not use the event logos or trademarks; they just make themselves appear to consumers that they are attached to the event. The goal of an ambush marketer is to make consumers believe that their particular brand is an official sponsor of the event because the consumer sees the company’s ads or products near or at the event.
Why do companies use ambush marketing?
Companies use ambush marketing because it is cheaper and sometimes more effective than becoming an official sponsor of an event.
They do not have to pay the huge fees associated with sponsorship and are sometimes able to trick consumers into thinking that they are an official sponsor of that event. Companies can take the money they save from not paying the sponsorship fees and put it towards creative marketing campaigns or use it to revamp current campaigns. Another reason that companies use ambush marketing is that it is very difficult to be proven guilty in court. Therefore, many official sponsors are reluctant to take complaints or allegations of ambush marketing to court. Ambush marketing is technically illegal, but very few cases have actually gone to
trial.
Examples of Ambush Marketing
How does ambush marketing affect competitors? Examples Ambush marketing is detrimental to companies who are actually the official sponsor of events because it weakens the bond in the consumers’ minds between the official sponsor and the event. Consumers may believe that the company employing ambush marketing is actually an official sponsor because they see that company’s logo or products associated with the event. Companies pay large amounts of money to called official sponsors of events such as the World Cup and for the ability to use the World Cup name and logo in their advertisements. Ambush marketers seek to make consumers forget about the official sponsor and instead associate their products with the event.
In November of 2010, Captain Morgan allegedly pulled off an ambush-marketing stunt during a Philadelphia Eagles game. After the Eagles’ tight end Brent Celek caught a touchdown pass, he posed in the Captain Morgan stance with the cameras focused on him. The NFL was outraged when they found out about what had happened. NFL spokesman Greg Aiello said, “Every league has the same rule. … It’s come up before, companies trying to use our games and then players for ambush marketing purposes.” The NFL has been very strict in allowing companies to enter into agreements with players, because they want to preserve the integrity of the league.
An example of ambush marketing at the World Cup occurred at the 2010 World Cup when the Dutch brewery Bavaria sent 36 blonde women dressed in orange mini-skirts into the World Cup, even though Budweiser was the official beer sponsor of the World Cup. This stunt earned Bavaria worldwide media coverage; when you Google “World Cup beer sponsor,” three of the first ten results are about the ambush marketing of Bavaria, including the first result.
When our competitors ambush market events we sponsor, we lose a significant margin of recognition and awareness that we would have gained otherwise. These losses stunt growth and result in inefficient costs that do not boost sales at the intended level, in effect lowering profits. Our sales have increased steadily over the past five years, but net income has room for improvement. 2008 net income fell from €644 million to €243 million in 2009. The reason for this fall was a drop in operating profits. Though net income increased to €567 million in 2010, we have not fully recovered. Since this is a global company, we must be aware of how each separate market is affected by ambush marketing.
Western Europe contains the most abundant and loyal customers to Adidas, contributing to nearly 30% of total sales. All other markets, aside from North America, have much lower sales figures. Developing markets, if shaped effectively, are most likely to adopt are products at a high rate. Citizens in these areas will decide what products to buy based on quality, innovation, availability, and perception. Sponsoring events such as the 2010 FIFA World Cup have proven capable of spiking credibility and growth. Spain, a team we sponsored, won the World Cup and the adiZero F50 was the top scoring cleat in the event. By the end of 2010, the Adidas Football Facebook page skyrocketed from 300,000 members to over 3 million. With so much potential for extreme growth, perfecting a brand protection strategy is paramount. (Adidas Annual Report)
Future Recommendations
Recommendations for Adidas at 2014 World Cup
We should be concerned about ambush marketing at the World Cup in 2014 because our investment in the event is significant and needs to be protected. Investigating Brazil’s laws could provide helpful insight. Research of Brazil’s policies on ambush marketing will help us utilize the most effective strategies in preventing and pursuing ambush marketers. At the event, we should purchase billboards not only at the venues but also in the cities surrounding the venues so that the Adidas brand image is constantly visible to consumers. In order to protect our brand, any slogans or advertising designs in ads should be trademarked if possible so that competitors cannot try to use any similar ideas. During the 2010 World Cup, Nike featured a campaign involving soccer superstars followed by the tagline, “Write the Future.” Although Nike was not directly affiliated with the World Cup, many consumers believed that they were because of their strong alignment to the event. We need to prevent these kinds of ads from catching on and depreciating interest in our brand. A strong television campaign of our own is vital because the World Cup will be broadcast all over the world, and television is a major vehicle of ambush marketing. We need to keep a watchful eye out for competitors will likely buy ad space during airtime of the World Cup. Viewers should know without a question which companies officially sponsor this event. Adidas is the only company in the sporting goods sector allowed to use World Cup trademarks in advertisements, and needs to take advantage of that. After the games, the impression of Adidas as an official sponsor should be stamped into the minds of soccer fans all across the world.