'Olympic Advertising' Drawing Higher Marketing Spend

Julian Richardson, Business Observer reporter

While the competition heats up in Beijing at this year's Summer Olympics, there is intense competition among companies keen on attracting the attention of the billions of persons that are tuning in to the Games. Not only are big international corporations forking out major bucks on advertisements, but some local companies are getting involved in the act as well.

It is estimated that US$6 billion will be spent on advertising associated with the Beijing Games, with the 12 official global sponsors, which includes international heavyweights such as General Electric, Kodak and McDonald's, accounting for a substantial portion of that amount. These companies reportedly paid US$80 million each just to be one of the exclusive sponsors of the two-week event.

In the smaller market of Jamaica, companies such as Digicel and Red Stripe are pulling out all the stops to highlight their brand over the period.

"The Olympics is a large event and advertisers will always be looking for programmes that deliver to eyes or ears whether through the print medium, television or radio," said veteran marketer Harry Smith, former commercial director at Digicel. "I would expect that alot of people would invest advertising dollars around the Olympics, the same they do for the (football) World Cup."

Added Brian Schmidt, Irie FM's marketing manager: "In terms of the coverage by the media generally, the Olympics presents an unusual opportunity for clients to showcase their products and services to their potential customers."

Digicel, the leading provider of mobile phones in Jamaica, has inundated the airwaves with a series of electronic and print advertisements featuring 100 metres world record holder Usain Bolt, while companies such as Red Stripe, Courts and Wisynco have paid their share in gaining some of the spotlight as well.

An analysis of the advertising rates of local media houses that have been heavily used by companies to promote their brand during the Olympics, gives an indication of the millions of dollars that is being spent by some companies.

Full-page colour advertisements in the island's two daily newspapers attract a price tag of a little over J$81,000, while similar advertisements in the high volume Sunday editions run close to J$107,000. Olympic advertorial supplements such as the one offered by the Observer last week has proven to be very effective in luring companies to advertise.
In the electronic media, which is widely regarded as the preferred medium for clients, premium rates are being charged over the Olympics period, with the addition of volume discounts geared at spicing up the package.

Depending on the time slot, one 30-second advertisement at Television Jamaica (TVJ) can costs anywhere between J$20,000 and J$38,000 plus GCT, while the rates at CVM ranges from J$18,600 to J$48,000 plus GCT. Just one congratulatory message at TVJ cost the advertiser J$22,000 plus tax, but if a company is to buy four such messages, it will cost J$75,000 plus tax, or J$18,750 plus tax per ad. A package of 10 crawl messages at CVM attracts a J$97,750 plus tax price tag, while a package of four crawl messages at TVJ sells for J$45,000 plus tax.

According to Smith, while rates are increased over the period, it is still more than worthwhile for companies to invest in advertisements because of the exposure it will bring to the entity.

"The fact that media companies increase their rack rates around the event may still work out as a very efficient buy for an advertiser," said Smith. "The advertiser is supposed to be using what they call the 'cost to reach a thousand people'.
"Even when they increase their rates by 10 per cent," he continued, "the audience increases by 20 to 25 per cent and the advertisers are still ahead."

CVM, cashing in on the likelihood that more viewers will tune in to watch the semi-finals and finals of an individual event at the Olympics, especially the 100 metres finals for both men and women, has charged an additional 10 per cent to advertise during those time slots, a strategy that Smith says will work for the media company.

"Advertisers will be placing ads around events that attract the big audiences," said Smith. "I have no doubt that advertisers will be trying to advertise around the 100-metre finals."

The type of promotions being deployed by companies varies immensely. Wisynco, for example, as distributors of the Coca-Cola brand in Jamaica, has chosen to promote the product through giveaway prizes and the sponsorship of Olympic news coming out of Beijing. Wisynco director, William Mahfood, believes such measures will be very effective in enhancing the image of the brand in a local cola market which is dominated by fierce rivals Pepsi.

"It is probably going to be the most watched Olympics by Jamaicans ever just based on the excitement around the track and field possibilities this year," he told the Business Observer. "Basically, we are aligning Coca Cola with the Olympics both with the Observer and TVJ, and are using the medium to continue to promote the work on the ground with Coke."

However, according to Irie FM's Schmidt, because of the patriotism during the Olympics, perhaps the most effective measure to advertise at this year's Olympics for local-based companies, would have been through direct sponsorship of the Jamaican Olympics team. This he said has been very effective for international sporting goods company Puma, a major sponsor for the Jamaican delegation to Beijing, whose logo can be seen on the uniforms of every Jamaican athlete.

"The battle for marketing is in the consumer's minds; there has to be this competition to push your product," said Schmidt. "Some companies go a step further by trying to build on the nationalistic appeal by being directly involved with the Olympics team through sponsorship."

Jamaica is one of 16 countries being sponsored by Puma at this year's Olympics. But it can be argued that the brand has almost become synonymous with the success of Jamaican athletes over the years.

"Once the Puma brand launched the Jamaica campaign, it just carried it to another level," said Schmidt. "Associating itself with a country that has produced the bobsled team, the tons of sprinters, boxers and world-renowned athletes was just a natural marriage.

Added Schmidt: "Jamaica has the two fastest men in the world (for the year so far) and the three fastest women over 200 metres (for the year so far) as well. This is just icing on the Cake for Puma who has aligned itself to the world's sprint factory."

The Irie FM executive shares the view of many marketers who argue that Jamaican companies have yet to fully respect the benefits that good marketing can bring to a company. This he said is depicted by the fact that it is usually the same local companies that spend on advertising when there is a significant event like the World Cup or Olympics.

"There is a general misunderstanding of marketing and promotions here in Jamaica," said Schmidt. "Local companies don't understand that it is not an expense, but an investment in their company; you can have the greatest company in the world, but if people don't know about it they won't partake."

Peter Lindo, a director at Marketing Counsellors Limited, acknowledged that there is a very narrow cross section of companies that usually advertise during major events. He however suggested that economics is a big factor why some companies refrain from being involved, especially with the expensive advertising packages being offered by some mediums.

"The companies that advertise are the ones that have always paid attention to what it is to attract the attention of the public and have made the effort to get involved - the Digicels, Singers, Red Stripe etc", said Lindo. "There is not alot of money going around so some advertise and some don't; only the extremely prospersous ones do.

"Also I think that some of the packages are quite pricy," continued Lindo. "Most people want a package where they can run a series of ads. What you see is that Digicel is dominating right now because they have the money to spend."