Though the games are primarily funded by media rights income, commercial sponsorship revenue is on the rise. With brands increasingly eager to associate themselves with the Olympic movement — and favorable advertising conditions increasing the value of those sponsorship deals — the Olympic Games are becoming more reliant on sponsors’ cash to stage the quadrennial event.
According to research firm Ampere Analysis, the International Olympic Committee (IOC) is set to reach a sponsorship revenue target of $1.34 billion this year. That’s 60% higher than it was three years ago in Tokyo. And revenue flowing in from commercial sponsors is growing 10 times faster than that from media rights sales. The IOC did not respond to a request for comment at the time of publication.
“We are seeing more global entities leveraging major sporting events to support their brand-building objectives, with the aim of reaching consumers in new markets and strengthening their presence in existing territories,” Chloe Ng-Triquet, sponsorship researcher at Ampere Analysis, said in a research note.
The price of becoming one of the handful of worldwide Olympic partners is, it’s fair to say, large. Toyota reportedly paid $835 million to sponsor four Olympics (including summer and winter games), from 2015 to 2024. The Japanese car-maker, which decided to end its sponsorship after the Paris games, is one of 15 worldwide partners alongside Alibaba, Visa and Deloitte.
It’s likely that whichever auto brand replaces Toyota’s berth will be stumping a similar, if not higher, amount of cash. That’s because future editions of the games are considered more valuable, at least for marketing purposes, than the recent Pyeongchang and Tokyo games. Partly it’s a matter of timing — the time difference between Paris and Milan, for example, being kinder to viewers in the U.S. than the 13-hour gap between the East Coast and Japan.
“Average partners will usually sign eight to 10-year agreements with the [IOC],” noted sports marketing analyst Malph Minns.
He said that while the games over the last decade took place in Brazil, Russia, Korea and Japan — markets, with the exception of the latter, that lie outside the biggest-spending advertising regions — the next cycle, beginning in Paris, takes in U.S. (Los Angeles, in 2028), France (2030’s winter games are bound for the Alps) and Australia (Brisbane, in 2032), the largest, sixth-largest and ninth-largest markets for advertising spending in the world respectively; Brazil is the 10th while Korea is the 12th, according to Statista.
“It’s not that it wasn’t worth putting money in [before], but there’s a new opportunity that we haven’t had in the Olympics for the last 10 years,” Minns explained. At the Paris games, Ampere’s research showed that U.S. brands were the largest sources of sponsorship income. “Ultimately, they’re partnering with the Olympics because they want to reach people,” said Minns. “Proximity is important.”
Furthermore, truly mass audience events are harder and harder to come by for marketers, said eMarketer senior analyst, retail and e-commerce, Zak Stambor.
“In short, I think it’s simple supply and demand,” he told Digiday. “We have a wildly fragmented media landscape where the content that any two people consume on a daily basis can be wildly divergent. And the Olympics, not unlike the Super Bowl, is one of the rare times that people come together, watch the same thing.”
Despite the revenue bump NBCU will enjoy from the event — the broadcaster has secured more TV sponsors for Paris than the Rio and Tokyo games combined, and will likely rake in more than $1.25 billion over the course of the event — marketing budgets in 2024 are spread across a range of channels. In that context, Stambor added, a sponsorship that links timely marketing activity across the board makes sense.
At Samsung, for example, its 30-year long Olympic associations are a key element of ongoing efforts to reach younger cell phone consumers. “It’s a real commercial priority,” said Peter Wilson, executive strategy director at its agency, Iris. “It’s quite hard to get people to switch phones.”
Leveraging its ongoing Olympic sponsorship to support skateboarding in the U.K., one of the newer disciplines at the games and a sport with a young fandom, provided a base from which to “connect with them in a way that that didn’t play by traditional brand rules,” he added. Rather than add to its Olympics costs with expensive TV advertising, the brand’s “First Flips” skateboarding campaign leans heavily on a roster of athletes for influencer activations, and on an content series pushed out on Samsung’s organic social channels.
However, marketing teams considering whether to tether themselves to the movement for a decade will have to argue their case to CFOs and finance departments looking for a concrete return on investment.
At tire manufacturer Bridgestone, marketers aim to connect its Olympic partnership with increased purchase consideration down the line. “We’re hoping to then build that future consumer,” said Caitlin Ranson, senior manager of partnerships marketing at Bridgestone Americas, of the effort.
Furthermore, she said that properly leveraged, the association meant that “when they are making that purchase decision, under that consideration, and under that lower funnel, they would choose us because they know who we are, and kind of what we stand for.”
Brands often find ways to sponsor peripheral Olympic entities, such as national sporting associations like USA Climbing, Olympic national teams such as Team GB, or individual athletes. As well as its skateboarding partnership, Samsung, for example, is a backer of the U.S. breaking (competitive breakdancing) team.
“Samsung is all about being innovative, being first. We want to be innovators, we want to get the frontline, and the Olympics is all about that,” said Annika Bizon, marketing and omnichannel director for Samsung UK and Ireland. “We wanted to look at these new sports that don’t have as much awareness behind them, and make sure that they’re getting visibility.”
Toyota’s exit from its sponsorship berth, announced earlier this year, opens the door to other larger brands — potentially its rival automakers — to step in.
That doesn’t necessarily mean the next deal is guaranteed to be larger, though. When negotiating future deals, Minns suggested that the IOC might embrace a larger number of smaller sponsorships at the national or regional level, rather than expand its worldwide roster.
“I could completely understand that in the States, given the vastness of the market,” he said.
