In July 2003, B.C. governments, corporations and sports fans broke out the bubbly to toast the news that Vancouver and Whistler had won the bid to host the 2010 Olympic Winter Games and the Paralympic Winter Games. Proponents were intoxicated by visions of how the city, Whistler and the province as a whole would benefit from the influx of tourists, upgrades to infrastructure and construction of venues that would be enjoyed long after the athletes departed. Who could have predicted, with just one year to go before the torch is lit, those heady visions would be clouded by a suddenly unstable economy? And who would have imagined Olympic sponsor Nortel Networks—with an investment said to be worth upwards of $15 million—would file for bankruptcy protection 13 months before the start of the Games? Or that other major sponsors, including General Motors and Bell, would be grappling with a tanking economy? You certainly couldn’t blame those same celebrants from feeling a wee bit nervous now that they are in the home stretch.
“The big issue is, to what extent is VANOC and all the other parties involved able to cope with the recessionary environment we find ourselves in now,” says James Brander, professor in the Sauder School of Business at the University of British Columbia, who has been following the development of the 2010 Games. “Ticket sales, as I understand, have been OK, but who knows what’s going to happen as the Games approach?”
Brander believes the overall management of the Olympics is going well, despite the challenges. He points to Expo ’86, which also had its share of naysayers and turned out just fine for the city. “Arguably, Expo ’86 did a lot for Vancouver, but it was hard to predict that,” says Brander. “It really wasn’t obvious until well after the fact. Could this work out as well [for the Games]? Maybe, but right now, because of the economic environment, things look pretty tough.”
In true Olympic spirit, however, the Vancouver Organizing Committee (VANOC) is staying positive and upbeat, maintaining a show-must-go-on determination. “Every organization is going through challenges… but we made some decisions early that really helped us a lot,” says Dave Cobb, executive vice-president, revenue, marketing and communications for VANOC. “For example, we set out to complete our venue program a year before the Games, which we’ve done. We went out very early with our revenue-generation programs and generated a huge majority of our targets before the economy took a bit of a downturn.”
To date, no sponsors have reneged on their commitments to the Games, and none have asked for added perks, according to Cobb. Even Nortel, which is supplying communications infrastructure to the Olympics, reaffirmed its sponsorship commitment after filing for bankruptcy protection Jan. 14.
Brian Findlay of Toronto sports marketing firm Stellick Marketing Communications thinks VANOC is in good shape, largely because it signed contracts with big-name sponsors before the real economic trouble began. And, he says, companies are still investing in strong packages, and will consider VANOC before other sponsorship deals because it’s a once-in-a-lifetime opportunity.
While he expects sponsors’ initial commitments to VANOC will be honoured, the account activations could be affected by the downturn. For example, if sponsors’ budgets are slashed, they may run less Olympic-themed advertising than they originally intended. However, Findlay hasn’t seen any signs of sponsors cutting back. “There’s a lot of activation in the works,” he says. “RBC and Coke are putting a lot of energy into [Olympics initiatives].”
While economic woes may affect media sales (see “Will Advertisers “Believe” above), Findlay says because sponsors have signed contracts, they can’t back out of any commitments. The only foreseeable way VANOC will lose any of its current sponsors is if another files for bankruptcy, which Findlay says is unlikely, given the calibre of the companies VANOC has attracted. “It’s a pretty good list of sponsors. I wouldn’t be worried personally if I were [VANOC].”
Although VANOC announced its revised budget on Jan. 21 in the face of the economic downturn, Cobb remains confident VANOC will meet its $1.63 billion operating budget target. On Jan. 20, VANOC secured new sponsor Cold FX, and Cobb says they’re in negotiations with six other companies. Cobb also notes the strong ticket sales in the first phase exceeded expectations, leading him to believe every ticket to the Games will be sold, netting them an additional $230 million. To date, VANOC has signed $751.5 million in sponsorship revenue against a $760 million budget.
The deals themselves are wide and varied, as each marketer has different objectives, notes Cobb. Most align themselves with the Games to raise the image and awareness of their brand. For others, it’s to provide opportunities for their employees to volunteer, or be involved at other levels with such a prestigious event. “Bell Canada, for example, has dozens of people working on the Games; they’ve been able to provide a unique experience to their employees,” says Cobb.
Bell’s Olympic sponsorship is also “a critical element of the customer experience,” says Loring Phinney, Bell’s vice-president of corporate and Olympic marketing. For example, as it did at the 2006 Winter Games in Torino, Bell will enable consumers to watch the events live on their cellphones. “It showcases in a very hands-on, face-to-face way how our products and services actually make these events and the customer experience better,” says Phinney.
Rona, a national partner of the 2010 Games, helped build the venues, but also worked with VANOC and community organizations to launch the fabrication shop. The fab shop builds medal podiums, wheelchair ramps, sports racks and warming huts. Notably, the program provides training in carpentry skills and job experience to socially and economically challenged people. One participating community organization, the non-profit Tradeworks Training Society, which helped develop the program, provides job and life skills training to unemployed residents of Vancouver’s drug-riddled downtown eastside.
From the start, VANOC’s biggest challenge was the finite number of years there were to work on this project. “As an organization, we have a very short life-span of five years or so; a bit less than that when you’re really up and running,” says Cobb. “We don’t have year after year to fine-tune things and develop relationships. We need to hit the ground running in everything we’re doing.”
For the Games’ advertising agency of record, the strategy doesn’t change in the face of unforeseen challenges; you simply soldier on. “All anybody can really do is keep your head down and worry about what you can control,” says David Martin, president and creative director at Vancouver-based Hyphen Communications which, along with partner BleuBlancRouge in Montreal, won the advertising and marketing account for the 2010 Games. “And what we can control is the story of the brand. You can’t control the background noise but you can make sure you’re not being distracted, that you stay on message and on strategy. Like the old expression, ‘Plan the work and work the plan.’ ”
That brand story includes the Games’ bilingual motto: with glowing hearts/des plus brilliants exploits. “It’s the first time in the history of the Olympic Games that the motto [is] bilingual,” says BBR’s creative director, Gaetan Namouric. Although the translation is different—des plus brilliants exploits means “most brilliant exploits” or “greatest achievements”—Nicolas Van Erum, BBR’s vice-president in charge of account services, says, “It represents our multiculturalism, our open-mindedness and our openness to the world. It represents multiple languages but it also represents a spirit that’s beyond a language or a race or a culture.”
While it seems VANOC is on the right track, is the team close to the finish line? “From a marketing standpoint, we’re a long way there, but the last 10% is probably the biggest challenge,” says Cobb. “We’re still looking to bring [up to] five more sponsors on board, we’re getting close to finalizing our plans for the torch relay, we have completed our first phase of ticket sales… and we have our test events this year. We’ll have [practice] sport events at almost all our venues and do our best to prepare for what may happen in 2010.
“It’s a big year,” he adds. “We just want to build awareness and excitement for the Games and make sure people are planning to come to Vancouver and have a great time when the Games are here.”
