Tokyo drift: how brands are rethinking their Olympic sponsorships

Despite travel restrictions and the Japanese public’s lack of enthusiasm for hosting the Games, marketing departments are optimistic that the delayed event can still offer a good return on investment

Given the ongoing constraints on travel to Japan and the 50% attendance limit that’s been imposed on its Olympic venues, the pandemic-affected Tokyo 2020 is set to be one of the most unusual Games in living memory.

Also exceptional is the lack of local support for holding the event, which has been delayed for a year owing to the pandemic. An opinion poll conducted by the Asahi News Network in mid-June found that 65% of the population wanted it to be postponed for longer or even cancelled.

Faced with such strong opposition, many Olympic sponsors – especially those in Japan – feel that they are walking a tightrope. Jun Nagata, operating officer at mobility partner Toyota, voiced his concerns during an investor meeting in mid-May, saying: “It breaks our heart as sponsors to see public discontent aimed at athletes. To be honest, we are conflicted every day over what the best course of action is.”

Another domestic sponsor is the Asahi Shimbun newspaper, which gauged the public mood at the end of May and broke ranks. It published an editorial that called on the prime minister, Yoshihide Suga, to conduct a “calm, objective assessment of the situation and make the decision to cancel this summer’s Olympics”.

Some sponsors have sought the help of marketing consultants, including UK consultancy Kantar, to assess the potential reputational risks of their association with the Games. Others have been preparing several marketing campaigns to adjust their messaging according to how the situation develops. 

Alfredo Troncoso is vice-president of global brand and marketing ROI at Kantar. He reports that his firm is “working with some of the major sponsors on their brand positioning and messaging to ensure that sponsoring the games has a positive impact. There is always the risk that a major outbreak could affect brand image, but it is a calculated risk.”

Troncoso adds: “It’s an interesting situation, which varies depending on the lens you look through. While there is a lot of uncertainty in Japan, with most people calling for the event to be cancelled, the global view is different. We ran a survey in the US and found out that the Games are the most anticipated sporting event of the year among fans and non-fans alike.”

Do the benefits still outweigh the risks?

Research published in September 2020 by the University of Oxford estimated that more than £2.2bn had been committed in sponsorship spending alone. With so much already invested by brands, the prospect of leaving the partnership would be of little benefit now, according to Tim Crow, a sports marketing adviser who is working with several sponsors.

If you’ve plotted your path well through this situation, then the investment can still pay back

“If you’re going to get involved with an Olympics, it’s a marathon, not a sprint,” he says. “If you’ve plotted your path well through this situation, the investment can still pay back. It certainly won’t if you pull out.”

Crow, who remains convinced that Tokyo 2020 will be a successful event, argues that “it will surprise people. From the work that I’m doing with sponsors on the ground and other parties involved with the Games, I’m seeing and hearing lots of good things.”

How has the landscape changed for sponsors?

Nonetheless, the pandemic and its economic ramifications have prompted several brands to re-evaluate how they approach big sponsorship deals.

Crow acknowledges that sponsors are “much more focused on the force majeure clause than they were previously. Covid-19 has certainly made people take a long hard look not only at the contractual side of sponsorships, but also at the way deals are activated.”

For sponsors such as Purplebricks, which is partnering Team GB for these Games, public opinion in Japan is less of a concern, yet the online estate agency has been obliged to continually review its marketing campaign throughout the Covid crisis.

The Olympics offer such a beacon of hope for society, so these could perhaps prove to be the most important Games ever

Purplebricks’ head of brand marketing and communications, Gemma Schmid, explains: “At the end of January 2020, we started playing TV adverts that featured Team GB athletes training for the Olympics, which were well received. But, when Covid hit, we no longer felt that they were in keeping with what was happening in the outside world.”

After the UK entered its first lockdown in March, the ad campaign was quickly adapted to show the athletes training at home.

“We had a really good reaction to these, because our new campaign felt more in keeping with the mood of the nation, Schmid says. “It was a nod to indicate that, even with the postponement, we could still show our support for Team GB.”

She has been in regular contact with the British Olympic Association throughout the pandemic and her team has often had to work on two plans simultaneously in readiness for differing scenarios.

The postponement has at least given Purplebricks extra time to come up with some more creative ideas. For instance, it’s planning to install a series of Olympic-themed murals in towns and cities around the UK. The hope is that this will replicate the kind of buzz created in 2012 when post boxes near the homes of Olympic and Paralympic champions at the London Games were painted gold.

Olympic sponsorship retains its value

The British Olympic Association’s commercial director, Tim Ellerton, is confident that its commercial partners, which also include Adidas, Aldi and DFS, will gain a “huge benefit” from their association with Tokyo 2020. 

“The Olympics offer such a beacon of hope for society, so these could perhaps prove to be the most important Games ever,” he says. “For brands to be associated with that is very powerful.” 

The International Olympic Committee also remains optimistic that the prevailing antipathy in Japan towards the Games will soften as soon as the event starts. During a recent press briefing, its director of communications, Mark Adams, said: “The Japanese people are proud hosts of an event that will be a historic moment. I am very confident that public opinion will swing hugely in favour of the Games.”

Schmid believes that any nervousness in Japan about hosting such a large sporting event during the pandemic may be eased if the UEFA European Football Championship proves to be a success in all respects.

“We know how unifying sport is,” she adds. “Its power to bring people together means that the benefits for us as a sponsor really outweigh any of the negatives.”