Mulling marketing with IOC's Lumme

International Olympic Committee marketing and TV services director Timo Lumme spoke to media at the Main Press Centre in Vancouver on Feb. 23 about economic conditions now and in the future for the five-ring circus.

On The Olympic Partner sponsor program:

“We have nine at the moment and the level of financial contribution is higher than it was for the previous quadrennial (US$883 million vs. US$866 million). We have the opportunity now that some of the partners for varying reasons their industries have changed or their structures have changed or they’ve been taken over by other companies, they’ve moved away...

"We have the opportunity to look to have an internal scorecard, just like you’re choosing your friends, we want to be in a position to choose the best. We want them to understand the Olympic brand and fundamental values.”

On the cost of IOC rights fees and whether broadcasters may decide to pay less in the future:

"The IOC has never forced any broadcaster to pay any money. At the end of the day, through a bidding process the broadcaster who wishes to pay the most gets the deal. And that's the way it's been, and that's the way it's going to be in the future.

"We are very confident that the Olympic Games will retain a premium status as a world event and I think it will command a premium price."

On whether the IOC might consider changing the clean-venue policy that prohibits advertising in venues:

"We speak to our partners regularly about that. They have always consistently said, 'No, keep the same, we want a clean venue policy, that's what makes the Olympic Games special.' There's no plan whatsoever to change that policy."

On the impact of social media and its potential economic benefits and drawbacks:

“That allows people to engage more with the Olympic brand, what we’re seeing is really a phenomenon where people are able to have more touch points. That’s a huge boost to us. Then if you put the video coverage aspect in the middle that for us carries a greater value.

“It’s a symbiotic, complementary relationship. What we want to achieve is not just the great experience for 17 days but we’d like Olympic fans to feel that they’re connected 365 days of the year even outside the Games period.

“Generally we’ve done gatekeeper deals where we do all means and media, then it’s up to the rights holder in that territory and they decide how to partition and create the coverage across different platforms.

“In Brazil, new media rights were sold first with Terry by Telefonica, then we did pay TV, satellite and standard. This just reflects that it’s a fast-evolving marketplace.”

On Coca-Cola and McDonald’s, two sponsors whose flagship products are seen as unhealthy by critics:

“Both are longtime Olympic sponsors. On the one hand they’re completely committed to the Olympic values, they will promote our brand and make sure that they are reaching young people trying to aspire to better themselves through sport.

“The financial assistance they provide to us, 92 cents of every dollar we get goes towards various programs we have to put on the Olympic Games and help athletes at the grassroots and elite level train. We feel very comfortable with those partnerships, we know that they have the best interest of the Olympic movement at heart,

“They’re very aware in their own sectors how they have to position themselves, obviously to an extent they use the positive values of the Olympics to position themselves, we’re more than convinced they will continue to provide through their sectors the best products and services to their constituents.”

Record numbers forecast for Vancouver, but not record profits

The International Olympic Committee’s marketing director estimated 3.5 billion viewers would experience some of Vancouver’s 2010 Winter Olympics.

Timo Lumme said more than 300 broadcasters in 200 territories delivered the first all high-definition Winter Games to TV viewers. He said the total amount of content delivered was 50,000 hours, which is more than Salt Lake 2002 and Turin 2006 combined.

“In four short years from Torino to Vancouver we’ve had a continuing digital explosion,” Lumme said. “We now have the same amount of hours globally covered on digital media, Internet and mobile, as we have on the old media, broadcast.”
In Canada, a record 22 million people were watching when Sidney Crosby scored the gold medal-winning overtime goal in the hockey final. CTV reported average prime time viewership of 5.8 million.

The ratings were in record territories, but the recessionary Games won’t translate to record profits because of the advertising slump. NBC parent General Electric already announced in December that it would lose $200 million because of Vancouver 2010 and is being coy about its post-London 2012 plans. NBC Olympics chief Dick Ebersol is bearish about Sochi 2014, mainly because it's eight hours ahead of New York. Fox and ESPN have mulled bids.

Also in December, CTV Olympics president Keith Pelley said the aim was to break-even. CTV bid US$153 million five years ago for 2010 and 2012 rights, more than double the CBC contract for US$73 million for 2006 and 2008.

"We've said what we're going to say about the economics leading into the Games. Now we're totally focusing on the actual Games and we'll address the consolidated numbers shortly thereafter,” Pelley said during the Games.

The IOC promised VANOC a roster of 11 global sponsors, but it stalled at nine and no new deals were announced in Vancouver. Last summer, the IOC pledged to help VANOC with losses up to $22 million unless the gap could be narrowed through other means.

The B.C. government is the ultimate guarantor and launched a $38 million tourism ad campaign before the Games. The You Gotta Be Here out-of-home ads took up substantial space in the Olympic city and at transit stations, filling space that would have been used by private sponsors had the recession not happened.