What is Ambush Marketing?
Ambush marketing occurred when a non-sponsor of an event attempted to pass itself off as an official sponsor. Ambush marketing is defined as the practice whereby another company, often a competitor, intrudes upon public attention surrounding the event, thereby deflecting attention toward themselves and away from the sponsors. In simple words, non-sponsors to gain benefits available only to official sponsors exploit ambush marketing.
When a sponsor purchases a sponsorship program, he aims towards orchestrating public attention onto its company or brand. In a typical sponsorship arrangement the sponsor purchases the sponsorship property rights and uses support promotion to further draw public attention to its involvement. The practice whereby another company, often a competitor, intrudes upon public attention surrounding the event, thereby deflecting attention toward themselves and away from the sponsor, is now known as “ambush marketing.”
The term ambush marketing was initially coined to describe the activities of those companies who sought to associate themselves with an event, without paying the requisite fee to the event owner. They thereby ambushed the legitimate sponsor in terms of giving the impression to consumers that they — the ambusher — were in fact the sponsor. While this narrow view of ambush marketing still exists, the term is now often used more generically to also describe a variety of wholly legitimate and morally correct methods of intruding upon public consciousness surrounding event.
In the current context, the following definition covers the concept comprehensively — Ambush marketing is a form of associative marketing, utilized by an organization to capitalize upon the awareness, attention, goodwill, and other benefits, generated by having an association with an event or property, without that organization having an official or direct connection to that event or property.
Evolution of Ambush Marketing
The growth of sponsorship’s mainly took place for two reasons: first, because of its ability to break through the clutter surrounding advertising and secondly, increase in sophistication of the event owners at development of packages that enabled them to obtain higher returns from their events. This increase in sponsorship’s attractiveness resulted in decrease of marketers’ ability to enter into sponsorship contracts as the cost of securing these and the level of competition for them rose. Ambush marketing thus arose, when companies which were formerly able to associate themselves with certain high-profile events (such as the Olympics) became excluded from official sponsorship deals, because of increased costs or category exclusivities.
Ambush marketing first gained attention at the 1984 Los Angeles Olympics, as a result of the restructuring of Olympic sponsorship and organization in the early 1980s. Prior to Los Angeles, Olympic sponsorship contracts were agreed on an open, unrestricted basis, allowing interested parties to associate themselves with the event for payment, financial or in kind. Due to political unrest and the financial constraints experienced by the Olympics in the late 1970s and early 1980s, the organizers of the 1984 Games sought to reform the sponsorship program for the Los Angeles Olympics, as a means of financially stabilizing the Games. Following the unprecedented financial success of Los Angeles, the International Olympic Committee (IOC) instituted and refined a category-exclusive, bundled rights-based sponsorship plan, in an effort to provide greater value for sponsors and generate increased revenues for Olympic organizers. As a result of the changes made, Olympic sponsorship evolved — from 628 official sponsors in 1976, earning $5m in cash and $12m in kind — to $130m in revenues in Los Angeles from only 30 partners. However, while the adoption of this new sponsorship program provided the IOC with greater financial security, granting category exclusivity also opened the door to ambush marketers seeking to capitalize on the event, as they were no longer able to do so officially. As sport sponsorship has grown in importance and sophistication since 1984, so too has ambush marketing, emerging as a legitimate and distinct threat to sponsorship value.
The first instance of ambush marketing occurred when Kodak failed to secure sponsorship rights for the 1984 Olympic Games to Fuji. Undeterred, Kodak became the sponsor of the ABC’s broadcasts of those Games and the “official film” of the U.S. tracks team. If Fuji was the victim of ambush marketing in 1984, it exacted its revenge on Kodak in 1988. Kodak secured the worldwide category sponsorship for the 1988 Olympic Games, but Fuji aggressively promoted its sponsorship of the U.S. swimming team. In a parallel move, although Coca Cola secured official worldwide sponsorship rights to the 1990 Football World Cup, Pepsi sponsored the high profile Brazilian soccer team.
The International Olympic Committee (IOC) has expressed strong concern over ambush marketing; however, the Olympic Games are not the only event where confusion over sponsors and their rivals has occurred. A similar situation arose in early 2003, when the Indian cricket team came close to boycotting the ICC Champions Trophy tournament. Players expressed concern that personal advertising and endorsement contracts they had entered into would conflict with the ICC anti-ambush rules, designed to ensure official sponsors had exclusive promotional rights during the event.
However, this concept has been difficult to analyze and understand. Marketing activities more closely related to guerrilla marketing, parasitic marketing, or simply examples of creative or innovative marketing, have often been condemned as ambushing attempts, further confusing an understanding of ambushing, and the risks posed.
Ambush Marketing Strategies
A few commonly employed ambush marketing strategies including — sponsoring media coverage of an event, a sub-category within the event, or contributing to a “players’ pool”. Its also noted that advertising coinciding with a sponsored event or other promotion, or deflecting attention away from the event, could also be considered ambushing.
1. Sponsoring Media Coverage of an Event
In some events, sponsorship rights to the event itself do not include associated media coverage rights. So, some non-sponsors obtain broadcasting rights and, in some cases, higher profiles than they themselves obtain, despite their official status.
The most famous example of this is Kodak’s sponsorship of the ABC broadcasts of the 1984 Olympics, mentioned earlier. Payne, an IOC representative, viewed Kodak’s behavior with concern as he considered it attacked Fuji’s rights as an official IOC sponsor. He described ambush marketers as “thieves knowingly stealing something that does not belong to them” and later argued that ambush marketing breaches one of the fundamental tenets of business activity, namely truth in advertising and business communications. As Fuji had purchased the exclusive category rights to this event from the IOC, Payne considered they had a legitimate right to publicity that might be generated by the event. Kodak infringed upon this right when it purchased the broadcasting sponsorship rights, thereby gaining an association with the event and access to its audience.
However, Jerry C. Welsh, a former marketing executive at American Express, criticized the weak-minded view that competitors have a moral obligation to step back and allow an official sponsor to reap all the benefits from a special event. He further stated that competitors had not only a right, but an obligation to shareholders to take advantage of such events and that all this talk about unethical ambushing is intellectual rubbish and posturing by people who are sloppy marketers. Kodak’s behavior, when viewed from Welsh’s perspective, would place more responsibility on the event owner’s behavior. The category exclusivity introduced in 1984 by the IOC prevented Kodak from obtaining any exposure opportunities once Fuji had secured the Games sponsorship. Worse, because the Games drew such a large audience, many of the other promotional options open to Kodak would have afforded a reduced reach over the period of the Games. Kodak simply chose to capitalize on an ancillary promotional opportunity that was legitimately available for purchase.
From a legal point of view, it is clear that Kodak’s behavior did not breach the contract Fuji held with the IOC. Rather, the IOC, in its eagerness to maximize its revenue from both sponsors and broadcasters, failed to protect its sponsors sufficiently. If Fuji believed they had purchased an entitlement to broadcast rights as part of its contract with the IOC, the dispute was a matter between Fuji and the IOC. If Fuji had not expected to obtain broadcast rights as part of the sponsorship contract, they were either remiss in not obtaining these or naive in believing that a competitor would not take advantage of opportunities legitimately open to it.
2. Sponsoring a Sub-Category within an Event
In 1988, the roles were reversed: Kodak secured the worldwide category sponsorship for the 1988 Olympic Games, while Fuji obtained sub-sponsorship of the U.S. swimming team, which it promoted aggressively. In this instance, the IOC had conferred official sponsor status on Kodak and viewed Fuji as usurping this arrangement. However, from Fuji’s point of view, they had not retained their official sponsor rights and so took advantage of other opportunities that remained available. It is possible that Kodak did not foresee this possibility, though this would be surprising, given their own behavior in 1984. Alternatively, the costs of Kodak’s sponsorship may have reflected the fact that competitors could purchase sub-category rights. In this case, the IOC arguably placed more emphasis on ensuring its own revenue streams than it did on safeguarding sponsors’ interests.
3. Making a Sponsorship-Related Contribution to a Players’ Pool
As well as purchasing mass media sponsorship rights, rivals of official sponsors can also sponsor teams or individuals competing within specific events. Examples of this form of sponsorship include Adidas’ sponsorship of Ian Thorpe when Nike was the official clothing supplier for the Australian Olympic team. Thorpe was photographed with his towel draped over Nike’s logo at a medal presentation ceremony, a gesture they suggest was necessary to protect his personal contract with Adidas. Also Cathy Freeman’s appearance in advertisements for Telstra, an official Olympics sponsor, and Optus, a rival of Telstra who held no official sponsorship rights. They ask “Should Cathy Freeman have been prohibited from appearing in advertisements for non-official sponsors for a period before the Sydney 2000 Games? While the IOC Charter (binding all athletes) restricts athletes from engaging in marketing activities during the Games period, would it have been fair, even ethical, to limit her activities prior to the Games? Equally, should Optus, the sponsor of athletics in Australia for over 5 years, have been prevented from sponsoring her?”
These questions focus attention on the difficulty of defining ambush marketing, and the need to consider where and when an activity breaches relevant statutes. Although the appearance of an individual wearing apparel from a rival would undoubtedly have irked official apparel suppliers, engaging in sub-category sponsorship may be a legal activity.
Payments to individuals or teams raise the question of whose rights should prevail — those of individual athletes or teams, or those of sporting associations and event owners? The brand endorsement contracts held by members of the Indian cricket team clearly illustrate the potential for conflict between event sponsors and individual sponsors. Team members’ lucrative endorsement contracts generate considerable personal revenue and run counter to the International Cricket Council (ICC) ruling that bars players from endorsing the products of companies who are the rivals of ICC sponsors for 30 days either side of ICC events. These examples suggest that companies involved in sub-category sponsorship have not necessarily engaged in illegal behavior. Although official sponsors may see the appearance of rivals’ insignia at an event as likely to create confusion, this argument overlooks the fact that rivals have the right to promote their sponsorship associations.
Disputes between Reebok, who was official apparel supplier to the US team at the 1992 Olympics, and Nike, who contracted the US track and field team to wear Nike clothing when competing, illustrate this problem. Reebok considered Nike guilty of stealing exposure and publicity they believe they had purchased when they obtained the apparel sponsorship for the entire U.S. team. However, Nike argued they simply exploited a legitimate sponsorship opportunity open to them. Moreover, Nike’s contracts with some of the athletes, for example Michael Johnson, existed well before the 1992 Olympics. Overall, Reebok’s involvement with the U.S. Olympic team did not prevent Nike from finding ways to publicize its relationships with athletes and athletics. The ability to exploit these relationships was constrained only by the legally binding agreements that existed between individual athletes, teams, associations, governing bodies and event owners.
The existence of earlier sponsorship contracts questions the level of exclusivity that event owners can offer prospective sponsors and may require a reconsideration of the benefits “exclusive” sponsorship can actually deliver. In particular, the fact the event owners do not own media, venues, or competitors, means they cannot exert full control over all other contracts that may exist. Contracts that specify the contingencies within and outside the control of event owners would clarify sponsors’ expectations and make them more alert to their competitors’ likely behavior. This, in turn, could provide a stronger basis from which to take any legal action, should a rival’s actions breach the contract.
4. Engaging in Advertising that Coincides with a Sponsored Event
Rivals of official sponsors can also purchase normal advertising time and space. Intense advertising by a competitor during or around a sponsored event is also viewed as another form of ambush marketing. Large international sporting events, such as the Olympic Games or Football or Rugby World Cups attract very large audiences, at least some of whom will see or hear advertising that screens during interval periods.
Official sponsors have expressed even more concern about themed advertising that features competitors from sponsored events. For example, during the 1992 Winter Olympics, McDonald’s were the official sponsors of the U.S. team, yet Wendy’s featured Kristi Yamaguchi, an Olympic champion figure skater, in its advertising. Yet while McDonald’s viewed Wendy’s behavior as ambushing, Wendy’s argued they had a right to maintain the saliency of their brand during the Olympic Games, using airtime available to all advertisers.
During the 1992 Barcelona Olympics, Nike held press conferences for Olympic athletes it sponsored and displayed large murals of members of the US basketball team on buildings in Barcelona, even though they were not the official sponsors. Nike manager, Mark Pilkenton rationalized these actions by stating: “we feel like in any major sporting event, we have the right to come in and give our message as long as we don’t interfere with the official proceedings”. Pilkenton’s comments suggest that ethical considerations do not form part of Nike’s decision criteria; instead, they focus on the legality of their actions to ensure they do not breach relevant statutes.
Qantas’ campaign in the period preceding the 2002 Sydney Olympics, which involved a series of advertisements featuring famous Australian athletes and posters with slogans such as “Australia Wide Olympic Sale”. Although Ansett sued Qantas, the issue settled, though not before nearly 60% of the public believed Qantas was the official Olympic airline (compared with the 38% who correctly identified Ansett as the official sponsor). While the Australian public appeared confused, it is difficult to attribute their confusion to the advertising campaign alone, which did not appear either to breach any trademarks or imply official associations that did not exist.
Development of Other Imaginative Ambush Strategies
As marketers make greater use of new media such as text messaging and event merchandising, so ambush marketing strategies have also become more creative. Fosters allegedly ambushed the official England sponsors, Steinlager, when they ran a campaign in Britain during the 1992 Rugby World Cup with the tag line “Swing low sweet carry-out”. This was an obvious play on the words of the English rugby anthem “Swing low sweet chariot” and an alleged attempt to obtain benefits that an association with the English team might bring. A range of other possible promotions. non-sponsors handing out coupons and caps to spectators, hanging banners from tall buildings, running ‘good luck’ and ‘congratulations’ ads, purchasing billboards around the venue, using World Cup tickets in consumer sweepstakes etc. The use of temporary tattoos, or “body billboards” on athletes as presenting another challenge to event owners wishing to preserve the exclusivity of official sponsorship rights. Increasing awareness of the use of merchandise to promote a rival’s brand has seen event officials screen spectators and prohibit entry to those who wear apparel that bears a rival’s logo. A South African newspaper reports that schoolchildren with Coca Cola in their lunch boxes had to peel off the can labels and scrape off Coca Cola logos from bottle tops and lids before they could enter a World Cup cricket match.