30 January 2014, 18:12

Sochi Olympics sets advertising record

Sochi Olympics sets advertising record

The Winter Olympic Games in Sochi have attracted a record number of advertisers with the total value of contracts with sponsors, suppliers and licensees amounting to almost half a trillion dollars. This is an all-time record not only for Winter, but also for Summer Olympic Games.

Besides ten global corporations, traditional partners of the International Olympic Committee, the organizers of the Games in Sochi have managed to sign marketing contracts with eight national partners. For comparison, there were seven national sponsors at the Summer Olympics 2012 in London.

In addition to this, the Sochi 2014 Organizing Committee has three marketing partners, 31 purveyors and 46 licensees – companies that assign royalties from selling souvenirs with the symbols of the Games to the Organizing Committee. It is expected that more than five million souvenirs will be sold altogether and royalties to the Organizing Committee will exceed $30 million. Of course, advertising contracts will not cover all expenditures for the preparation for the Olympics, but they may bring a substantial income, marketing expert Andrei Mamontov says.

“The Olympic Games have always been an unprofitable event, but since 1990s, the Olympic Games began to bring in a larger enough income, mainly because of sponsorship packages. In principle, Olympic incomes have been growing for the last few years. It is quite possible that the Russian Olympiad will also set its own record for income that our country will accrue.”

The total amount of marketing revenues at the Games in Sochi will be nearly half a trillion dollars. Until now, such an income was received at one Summer Games only - in Beijing. But it is not correct to compare revenues at Summer and Winter Olympic Games. As more athletes participate in the Summer Games, they attract a larger audience of TV viewers, and thus attract more sponsors. Therefore, the fact that Sochi managed to catch up with Beijing is a great victory of the organizers, since they’ve managed to attract major companies at the stage of preparation for the Olympics, Director of the United Traders Analytical Department Mikhail Krylov says.

“The sponsors’ interest in the Games in Sochi can be explained by the same things that explain their investments during the preparation period – it is their sincere desire to promote the development of Russian sport.”

The partners themselves argue that the main thing for them in the Olympic partnership is an issue of image, and not commercial benefit. In addition, it offers them an opportunity to introduce their products and brands to the guests of the Olympic Games from all over the world. Pavilions of national partners of the Games will appear in the Sochi Olympic Park.

Participation in the Olympic movement is an issue of reputation of a company that is often far more important than payback, marketing expert Andrei Mamontov says.

“Many companies want to and many have been sponsoring the Olympics for a long time not because they get some great effects, but because they try to accumulate this effect over a few years and decades with the goal of consumers associating them with the most interesting and large-scale event, which the Olympics is.”

It is expected that Sochi will also set a record for advertising contracts during broadcasting time. Thus, as of today, one of the largest American companies - NBC - has already signed advertising contracts for 800 million dollars, having broken the previous world record for winter Games. Experts believe that this figure will increase, because the Olympic Games are one of the world's major TV events. Viewers across the planet watch battles unfold on screen. Any TV company is ready to pay big money for the right to broadcast the Games. And advertising time during a broadcast becomes really golden.

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