Here's Why Olympic Advertising Will Be Totally Different This Year
Zacks Investment Research | Jul 20, 2016 04:39AM ET
With the Rio Games on the horizon, the time for Olympics-based advertisements is now. For at least the next month, television commercials, radio clips, billboards, and every other form of ad will be flooded with references to athletes and Olympic sports.
This year, however, Olympic advertising will be completely different. For the first time since the International Olympic Committee (IOC) imposed advertising rules, companies that are not official Olympic partners will be able to use Olympic athletes in their advertisements.
Times Change
The official sponsor list of the IOC is pretty short and includes just a dozen companies. They are Coca-Cola (NYSE:KO) , Atos, Bridgestone (NYSE:C) , Dow Chemical (NYSE:DOW) , General Electric (NYSE:GE) , McDonald’s (NYSE:C) , Omega Watches, Panasonic (NYSE:C) , Samsung (OTC:SSNLF) , Proctor & Gamble (NYSE:PG) , and Visa (NYSE:V) .
It’s a bit easier for domestic sponsors to partner with the United States Olympic Committee (USOC), although the USOC is said to ask for at least $40 million for an official agreement. Nike (NYSE:NKE) , AT&T (NYSE:T) , Citi Group (NYSE:C) , and United Airlines (NYSE:UA) headline the USOC’s sponsor list, and NBC, a division of Comcast (NYSE:C) , is the exclusive broadcaster of Olympic events.
In every Olympic Games prior to this year’s in Rio, only these official sponsors could use the images of Olympic athletes during the predetermined blackout period, which typically lasts the entire duration that the Olympic Village is open. This year, the blackout period runs from July 27 to August 24.
However, after years of pressure from athletes and non-sponsors, the USOC announced a rule change last summer that allows for athletes to appear in advertisements during this blackout period, as long as the non-sponsor obtained a waiver from the USOC within a specific timeframe.
Non-sponsors had to have their advertisements submitted and approved by the USOC months ago, and that task was not easy. The USOC placed tight regulations on the terminology and imagery that could be used in these ads, and some of the banned content might surprise you.
As you may have guessed, non-sponsors are not allowed to use basically any form of the word “Olympics,” but these companies also must avoid “Olympic-related terms” such as effort, performance, challenge, summer, and victory.
Non-sponsor companies are also not allowed to show the athlete participating at an Olympic Games, and images of the athlete can’t even allude to the Olympics.
New Sponsors Galore
For an example of something that would work, check out this Under Armour (NYSE:UA) commercial featuring Michael Phelps:
Get The News You Want
This was released in March, but it technically could, and almost certainly will, play during the blackout period. There are no Olympic-based images, no allusions to Phelps’ Olympic history, and no mention of any Olympics-related terms. However, if that plays during the Summer Olympics, you know exactly what it’s talking about. Under Armour will sponsor about 250 athletes during this year’s Games.
Other companies that have applied for approval include General Mills (NYSE:GIS) , Gatorade, Red Bull, GoPro (NASDAQ:GPRO) , and Skechers (NYSE:SKX) , according to Reuters . A company spokesperson from General Mills also told Reuters that its advertisement with two Team USA athletes saying that the competitors would be a part of “Team Wheaties” was granted approval by the USOC.
Bottom Line
So what does this actually mean for consumers? Well, expect even more Olympics everywhere. As if the three-week non-stop coverage of the Games wasn’t enough, a lot more companies now have the green-light to use the images of athletes.
For those athletes, the new rules have surely ushered in a welcome payday. For many athletes in fringe sports, sponsorships are how they get paid, and the relaxation of advertising regulations is certainly getting more people paid.
Finally, the big losers here have to be the official sponsors. Heading forward, one would have to assume an official Olympic sponsorship will be worth a little less cash as its exclusivity just isn’t there anymore.
Zacks Investment Research
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