Skipping the Olympics is “not an option” for many advertisers

The Olympics have long been an almost ideal forum for businesses looking to promote themselves, with plenty of opportunities for brands to nestle advertisements among pageantry and wellness stories about athletes overcoming adversity – all of it. for less than the price of a Super Bowl commercial.

But now, as around 11,000 competitors from more than 200 countries gather in Tokyo as the coronavirus pandemic persists, Olympic advertisers are worried about the more than $ 1 billion they have spent running ads. on NBC and its Peacock streaming platform.

Calls for the cancellation of the more than $ 15.4 billion extravagance have intensified as more athletes test positive for Covid-19. The event is also deeply unpopular with Japanese citizens and many public health experts, who fear a large-scale event. And there will be no spectators in the stands.

“The Olympics are already damaged property,” said Jules Boykoff, former Olympic football player and sports policy expert at the University of the Pacific. “If this situation in Japan quickly goes south, then we could see abrupt changes in the way deals are made and the willingness of multinational companies to get involved.”

Panasonic, one of the main sponsors, will not send its managing director to the opening ceremony, which is scheduled for Friday. Nor does Toyota, one of Japan’s most influential companies, which also dealt a blow to the Games on Monday by saying it had abandoned plans to run Olympic-themed TV commercials in Japan.

In the United States, most marketing plans are moving forward.

For NBCUniversal, which has shelled billions of dollars for exclusive rights to broadcast the Olympics in the United States through 2032, the event is a crucial source of revenue. There are over 140 sponsors for NBC’s coverage on television, on its Peacock streaming platform and online, an increase from the 100 who signed up for the 2016 Summer Games in Rio de Janeiro. .

“Not being there with an audience of this size and scope for some of our top advertisers is not an option,” said Jeremy Carey, managing director of sports marketing agency Optimum Sports.

In a Michelob Ultra commercial, sprint star Usain Bolt points joggers to a bar. The Procter & Gamble campaign highlights the good deeds of athletes and their parents. Basketball star Sue Bird is promoting fitness equipment maker Tonal in a spot that debuts Friday.

Chris Brandt, chief marketing officer of Chipotle, said the situation was “not ideal,” but the company was still planning to launch a campaign featuring profiles of Olympic athletes.

“We think people will continue to connect, even without fans, like they have with all kinds of other sports,” Mr. Brandt said. “This is going to be a factor of decrease in terms of excitement, but we also hope that the Olympics will be a little unifying at a time when the country can seem so divided every day.

NBCUniversal said it surpassed the $ 1.2 billion in U.S. advertising revenue it raked in for the Rio 2016 Games and sold all of its advertising slots for Friday’s opening ceremony, adding that it still provided space for the remainder of the Games. Buyers estimate the price of a 30-second prime-time ad to be over $ 1 million.

Television has attracted the bulk of ad spend, but the amount contributed by digital and streaming ads is on the rise, according to Kantar. Several forecasts predict that TV ratings for the Olympics will lag behind the Rio and London Games, while streaming audiences will grow sharply.

NBCUniversal said that in this year’s so-called initial trading sessions, when ad buyers book seats with media companies, Peacock received $ 500 million in pledges for the coming year.

“You won’t find a single legacy media company that doesn’t push its streaming capabilities for its bigger events,” said Mr. Carey, chief executive of Optimum Sports. “This is the future of this company. “

United Airlines, a sponsor of Team USA, has abandoned its original advertising campaign, which promoted flights between the United States and Tokyo. His new effort, with gymnast Simon Biles and surfer Kolohe Andino, encourages a broader return to air travel.

“It didn’t make much sense to focus on a specific destination that Americans might not be able to travel to,” said Maggie Schmerin, general manager of advertising and social media for the airline.

United’s campaign will appear at airports, social media and streaming platforms, including Peacock, but not on television. Ms Schmerin said the airline wanted to “match customers to where they are, based on their viewing habits.”

Executives at advertising agencies said companies regularly check for updates on the Covid outbreak in Japan and may refine their marketing messages accordingly.

“Everyone’s a little cautious,” said David Droga, founder of advertising agency Droga5, who worked on an Olympics campaign for Facebook featuring skateboarders. “People are quite fragile at the moment. Advertisers don’t want to be too sweet or too smart but try to strike the right tone.

Many companies advertising during the Games run campaigns that they had to rethink from scratch after last year’s Olympics postponed.

“We planned it twice,” said Mr. Carey of Optimum Sports. “Think about how much the world has changed in that year and how much each of our brands has changed what they mean, do or sponsor. So we crumpled it up and started over. “

Visa, a sponsor, will not host promotional and client meetings in Tokyo or send senior executives, said Lynne Biggar, the company’s chief marketing officer. The company’s publicity on the opening ceremony airs begins with a football match before showing that Visa is used in transactions around the world.

NBCUniversal’s sports calendar also includes the Super Bowl in February, for which 85% of ad space has already been sold or is under discussion, the company said. Also on the program: the FIFA World Cup in Qatar in late 2022 and the Beijing Winter Olympics in February, both of which put the advertising industry in a difficult position due to China’s poor record and of Qatar in human rights matters.

First and foremost, however, advertising officials just want the Tokyo Games to run smoothly.

“We’ve been dealing with these Covid updates every day since last March,” said Kevin Collins, executive at ad buying and media intelligence firm Magna. “I can’t wait for them to start.

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