Leyland Pitt and Michael Parent for the Financial Post: Ambush marketing hurt Adidas brand

When Wayne Gretzky lit the Olympic torch at this year’s Winter Games in Vancouver, organizers didn’t take any fashion chances. Canada’s hockey hero was adorned in gear from an Olympics official sponsor, the Hudson’s Bay Company.

Organizers had reason to be diligent with the clothing showcased at the torch lighting — arguably the most impactful and symbolic moment of the Games. Because less than two years earlier, a Summer Olympics sponsor — Adidas — was successfully ambushed by rival athletic footwear and clothing company Li Ning.

Indeed, the threat posed to sporting events sponsors by ambush marketing seems to grow every year — and ambush marketers will no doubt be targeting the next major event on the global sporting calendar, the 2010 FIFA World Cup in South Africa.

When a firm invests hundreds of millions of dollars in a sponsorship, and many millions more on marketing efforts to exploit that sponsorship, it embarks on a promotional journey that may help establish it as the uncontested brand in its category: Consider Coca-Cola, Visa, and McDonald’s as examples. At the same time, it exposes itself to an array of counter-attacks by competitors who have either chosen not to exploit the sponsorship opportunity, or who have simply not had the resources to do so.

Our recent study showed that the persistent effectiveness of ambush marketers leaves Olympic sponsors and those of other major sporting events particularly vulnerable — costing them not only their financial investment, but also ultimately their customers.

We examined data from the 2008 Beijing Summer Games — which saw Olympic sponsor Adidas ambushed by globally lesser-known Chinese company Li Ning. The Chinese company’s namesake founder, Li Ning, was China’s most decorated Olympian, and it was he who lit the Olympic flame at the 2008 opening ceremony.

Data collected after the closing of the Beijing Games isolated what we call the “Li Ning effect” — being incorrectly identified as an official sponsor as a result of clever ambush marketing.

In the footwear category at least, Li Ning was the clear brand winner of the 2008 Olympics, in spite of the millions Adidas spent to secure a sponsorship.

Amidst the background noise of multiple sponsorships, this highly poignant event stuck in people’s memory such that when they were asked to recall who the official sponsor of athletic footwear was for the Beijing Games, more of our respondents thought it was Li Ning than Adidas.

The return Li Ning received via its minimal investment in sponsorship — lobbying, perhaps? — was almost infinite. And while Adidas undoubtedly enjoyed some benefits from its sponsorship efforts, the company invested heavily to achieve these.

Given this, it needs to be reiterated to would-be sponsors: Don’t naively put yourself in a position to be ambushed. Remember, large sporting events provide optimal venues and occasions for this to happen.

This does not mean that firms should abstain from sponsorship; large global events can provide superlative opportunities for marketing communication. However, walking into sponsorships and blithely ignoring the lessons from the Li Ning affair would be asking for trouble. If you do decide to sponsor a major event, anticipate and behave as though an ambush will happen.