Sponsors Win Big With Coveted Olympic Partnerships

Aug. 7, 2008— -- When millions of people around the world tune in to the Beijing 2008 Olympic Games starting tomorrow, they will be watching more than just basketball, swimming and gymnastics.

Thanks to millions of dollars in sponsorships and aggressive marketing campaigns, Coca-Cola, Visa, McDonald's and a slew of other global and Chinese sponsors will also be the face of the Olympics and are expected to win big when it comes to attracting viewers' attention.

On the other hand, those who don't hold the coveted sponsorships -- such as Pepsi, MasterCard and American Express -- to name a few -- will be on the back burner, at least for the next two weeks.

"Essentially they are sitting on the sidelines while their competitors are getting all the glory," said Jed Pearsall, president of Performance Research, which conducts sponsorship marketing research.

Sponsorships for the summer Games are highly prized. And it's not just because of the worldwide audience. China has one of the largest and fastest-growing economies in the world, and the Olympics provide a unique opportunity for brands to tap into that lucrative market. Consider this: Beijing has more than 17.4 million residents -- that's more than the populations of New York, Los Angeles, Miami and Boston combined.

That type of exposure doesn't come cheap.

The top 12 Olympic partners paid a total of $866 million to the International Olympic Committee for global sponsorship rights at the 2006 winter Games in Turin, Italy, and for the Beijing Games, according to Chicago-based IEG, a sponsorship tracking firm.

Those millions are paid by companies just to have their names at the Games and to be able to use the Olympic name and logo on their advertising.

The Beijing organizing committee collected another $740 million for local sponsorship deals, estimated IEG. The International Olympic Committee sells international sponsorships while the host country arranges national deals.

Snatching Olympic sponsorships is not an easy task, especially for those who have not been previously involved. Under the contract terms, existing sponsors get the first shot at having their name associated with the next Olympic cycle.