CorpComms Magazine

Picture the scene. Jessica Ennis, Tom Daley and Chris Hoy are making Olympic history while London's gleaming new arenas, fast transport links and transformative legacy mean the 2012 Games are imbuing Britain with new confidence and vigour. What corporate sponsors wouldn't want to be benefiting from the shared halo effect? Then smell the embers from last month's burnt-out shops in London, Birmingham and Manchester, recall the critical and pitying foreign commentary and glance again at Private Eye's depiction of the riots under the headline Olympics Rehearsal, with the caption This is the worst opening ceremony ever. Aren't you glad your company isn't sponsoring the XXX Olympiad?

Adidas, BMW, BP, British Airways, BT, EDF Energy and Lloyds Banking Group obviously disagree. They are all signed up as domestic tier one partners for London 2012, each paying an estimated £40 million, while Adecco, steel company ArcelorMittal, Cadbury, Cisco Systems, Deloitte, Thomas Cook Group and UPS have second tier associations.

Then there are 25 tier three suppliers and providers and 11 worldwide Olympic partners, including Coca-Cola, McDonald's and Procter & Gamble. Of course, corporate communications and reputation management are all about opportunities and risks, while being associated with London 2012 brings potential bucketloads of both.

So how do corporate communicators go about getting their organisations on the winning rostrum? It's a fair question for reasons ranging from the sensational to the mundane.

Olympics, with all their political and security implications, are highly risky events. Past Games have attracted outrages from the terrorist kidnaps and killings of Munich 1972 to the Atlanta 1996 bomb. The 1980 Moscow and 1984 Los Angeles Games demonstrated that there is no guarantee that all nations will actually take part, while Atlanta suffered from transport chaos and Beijing 2008 set off libertarian protests.

The risks, moreover, don't disappear when the Games finish. Virtually all recent Olympics, but especially Sydney 2000 and Athens 2004, encountered major legacy problems - something that would be particularly painful for London 2012 given the emphasis its bid for the Games put on its lasting benefits. And most Games make pretty substantial losses.

Other operational risks also abound for London 2012. There are major challenges for London's already creaking transport system, while last month's riots showed the potential for major social unrest.

Meanwhile, on the track, in the pool and inside the other sporting venues from rowing to beach volleyball, there is still plenty of potential for Team GB to finish embarrassingly short of podium finishes after working its way to fourth place in the medals table in Beijing from 36th at Atlanta.

In addition to all that, sponsorship itself is beset with complexity, not least in the Olympic-sized squad of multi-tiered partnerships, preferred suppliers and full-on sponsors that most Games sign up to provide funding and support.

Each of the 2012 sponsors have had to go through detailed vetting by The London Organising Committee of the Olympic Games (LOCOG) to ensure they are in line with Olympic values, as well as their financial negotiations.

Return on objectives

So what do large corporate sponsors get out of backing the Games and how do they prevent the public relations opportunities being sullied by events that risk reputational damage by association? Andy Sutherden, global head of sports marketing and sponsorship at public relations group Hill & Knowlton, says partners and sponsors are united in one key respect.

'They have spent a lot of money, so this is for them a business investment that requires a commercial return. We are a long way past the indulgence of the boardroom. They are doing this for good commercial reasons,' he says.

Quantifying such returns, however, is where metrics get introduced and language becomes specific. Sutherden says businesses are slowly learning to measure such investments by returns on objectives rather than on investments. And, of course, the objectives can differ enormously.

'Some firms, like Deloitte, are in this to attract and retain the best possible talent,' observes Sutherden. 'For them it's about the acquisition of the best people in the industry and they think that by sponsoring the London Games, they've got a great calling card for some of the best people out there because recruitment costs are expensive.

'However, companies with consumer brands - Procter & Gamble are a good example - are in it for sales. They are trying to move the needle on brand favourability and on the way they're perceived by local communities.

'All of Lloyds' activities, for example, have been characterised by doing things at a local community level.'

Lloyds has been staging events across the UK, including roadshows involving the Olympic Torch, the bank's Local Heroes initiative in partnership with SportsAid to support promising and emerging British sporting talent on their journey to London 2012 and Lloyds TSB National School Sport Week, which the bank says this year inspired more than four million children to try more Olympic and Paralympic sports to achieve their personal best.

Gordon Lott, head of London 2012 and group sponsorship at Lloyds Banking Group says the bank believes there are three major benefits for it in partnering the Games: motivating and inspiring its staff, deepening its relationship with customers and bringing the bank to the attention of new customers. He says research carried out for Lloyds shows that the objectives are being met, he adds.

'The results are proving to be excellent,' states Lott. 'There's been a 100 per cent increase in the likelihood that existing customers will consider us for other financial services when they are aware of what we're doing. This is not just a partnership with the Olympics and Paralympics. More importantly, it's a partnership with our communities.'

Opportunities abound

Different objectives govern the Olympic partnership of minerals group Rio Tinto, a tier three London 2012 supplier which is providing the medals for the Games as well as sponsoring the team of Australia, where it has 50 per cent of its mining assets, and athletes from Mongolia, where it has a major gold and copper mine.

'These Olympics are billed as the most sustainable Games ever and we have a commitment to sustainable mining,' says global head of media relations Christina Mills. 'We see the Games as an opportunity to highlight our commitment to that, as well as helping to build employee pride. They can be part of the biggest sporting event in the world and there are lots of ways they can get involved.

'Our partnership is more at a corporate level. We're not trying to sell to customers. Every ton of iron ore we can produce we can already sell more than once.'

Similar motivation is behind EDF Energy becoming the first sustainability partner of the London 2012 Games.

The power group is providing shower timers and recycling facilities to the Paralympics GB training camp and encouraging its customers and others to use energy more sustainably through initiatives including Team Green Britain and products such as smart meters.

The opportunities provided by the Games also stretch well beyond major corporations. The Chartered Institute of Public Relations (CIPR), for example, is partnering with Our Team 2012, an initiative allowing small firms to support the 1,200-strong Great Britain Olympic and Paralympics team.

In return for £7,500 a year, sponsors receive opportunities for staff engagement, hospitality events and an Olympic tickets package.

Paul Mylrea, president of CIPR, says: 'This is a unique and unmissable opportunity for the PR profession to embrace London 2012 and share in its success. The CIPR's partnership status fast tracks the ability of members across the UK to get behind their local athletes on what we hope will be an inspiring journey of hope and endeavour towards excellence.'

There are opportunities too for local authorities and not-for-profit organisations. Carl Welham, head of communications at the London Borough of Hackney, says the local authority is benefiting hugely from transport infrastructure improvements for the Games and a drive to promote the area as an IT hub that will bring jobs and investment to the borough.

The legacy plan for the Olympic media centre involves turning it into a location for media and creative companies, while Welham also hopes that a free rock festival for 100,000 music fans, televised by the BBC, and the work the authority is planning to do with the non-sports journalists covering the Games for the world's media, will put Hackney on the map.

Strict rules prevent local authorities other than the five London 2012 Olympic boroughs of Hackney, Waltham Forest, Greenwich, Tower Hamlets and Newham from using official 2012 collateral but David Holdstock, head of corporate communications at the London Borough of Hillingdon, says they can still benefit in other ways.

Hillingdon's remit, for example, covers Heathrow Airport, the UK entry point for many Olympic teams and spectators, so the borough has an opportunity tomake its name known while Holdstock believes the Games will also assist use of its investment in two new leisure complexes and help the council in its health promotion activities.

Risky business

The dangers are also very real, however, with partners carrying out regular assessments of the physical, financial and reputational risks of being closely associated with the London Games.

Lott says that for Lloyds, the most important risks are those to the security of the bank's customers and staff and to business continuity.

These were considered last month when the bank looked at whether its Olympic Torch roadshow in Birmingham needed to be cancelled during the rioting.

The event went ahead unhindered but at the Olympics themselves, Lott says it will be important for partners to differentiate between risks they can control and those they have to trust LOCOG to deal with.

Financial risks include the possibility that partners' products and services will be overshadowed or damaged by 'publicity efforts from other companies trying to bask in the reflected glow of the Olympics', with 35 per cent of marketers polled earlier this year by the Chartered Institute of Marketing (CIM) saying they would almost certainly carry out some form of marketing around the Games.

CIM has warned that proposed rules to prevent such benefits could be 'catastrophic' to the business practices of thousands of firms that it advises.

It says that, even if they are awarded tenders to supply the Olympics, companies will have no legal rights to use official emblems or advertise their business or product in association with the Olympics.

Businesses are also restricted from using certain words considered to be linked to the Olympics. Stephen Waddington, managing director of public relations agency Speed, says: 'The organisers are closely protecting the brand identity and PRs could be caught out by the strictly-enforced rules designed to prevent the unauthorised use of the Games for commercial gain.'

Finally, there are reputational risks. Hackney, says Welham, faces major disruption, with the Olympic Route meaning it will have to carry out many services at night.

Any bad news will be quickly transmitted across the world by 20,000 non-sports journalists, while he also believes London 2012 will be the first Games to feel the full force of communications via social networks.

Others are less worried. 'There are risks to reputations of commercial partners of all major sporting events, whether it is the Round the World Yacht Race or the World Cup,' says Lott. 'But what we're focused on is delivering on our promise to bring the Games closer to our customers.

'If we deliver our promises to customers, the values associated with the Olympic Games will still hold true in our mind whether Team GB comes fourth or tenth in the medals table.' Rio Tinto's Mills prefers to focus on the positive impact that Olympics have had on other recent hosts.

'Look at the incredible success of the Sydney Games or the spectacular architecture and brilliant organisation of the Beijing Olympics,' she says. 'Both Australia and China came out of those Games extremely well. You have to think about how much contagion risk there is if something goes wrong. But if there's a problem with transport at the London Games does that mean people are going to think negatively about its sponsors? I'm not sure that sort of problem becomes a sponsorship issue.'

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