The Invisible Olympic Sponsors – And Why The Games Couldn’t Happen Without Sponsorship

There is a large group of Olympic sponsors whose primary objective over the next 17 days is to be brilliant, but invisible: the companies who provide vital Games Time services.

For brands like Atos (IT), BT (communications), Cisco (networks), Omega (timing) and UPS (logistics) the starter’s pistol on their sponsorship fires today. Everything they have done previously has mattered only in being preparation for this point. And if they make headlines in the next 17 days, it will be for one reason only: the Games being badly affected by a problem with their services.

To illustrate the point, all I need to write is G4S. Until a few weeks ago, G4S was familiar only to the big public and private sector buyers of its services, and was hoping to use London 2012 as a showcase to that small but highly lucrative audience. Now, of course, G4S is a household name because it failed to deliver, and the resulting fall-out has been calamitous for its reputation and share price.

In this space, it pays to be invisible. Get it right, and you have a trump card case study in the high-stakes world of big B2B contracts: “If we can do this for the Olympics, the biggest most complex event in the world, imagine what we can do for you.” Get it wrong and you’re where G4S is right now.

All of which reveals other aspects of the widely misunderstood Olympic sponsorship model, and why sponsorship is far more important to the Olympics than is commonly perceived.

The media convey the impression that the Olympic sponsorship model is the same as World Cup sponsorship and the like – a small group of consumer brands paying big money only for marketing rights.

The reality is very different. The Olympic sponsorship model is actually a giant joint venture, with the IOC and the local organising committee outsourcing critical expertise from multiple partners.

Because the Games is the world’s biggest and most complex peacetime operation, it takes far more to deliver it than pure cash. This Atos Olympics ad evokes that perfectly.

That’s why there are so many Olympic sponsors, and why the majority are B2B brands - although every Olympic sponsor, B2C brands included, provides important products and services as part of its sponsorship, without which the Games couldn’t happen.

And it’s why the majority of Games sponsorship is delivered in the form of ‘value in kind’ (VIK) products and services that are budget-relieving. In the modern era, VIK has consistently contributed the majority of domestic Games sponsorship, and I expect LOCOG’s final accounts to show VIK at 60% of its £700m domestic sponsorship total.

So if you’re ever tempted to join the vociferous chorus of those who criticise Olympic sponsorship, ask yourself this: if the sponsors weren’t there, contributing so importantly behind the scenes, how else would the Greatest Show On Earth be as big and brilliant as it is going to be, once again, in London?