LOCOG’s HOSPITALITY programme caused “significant interference” to the client entertainment and hosting plans of official sponsors, in what may prove to be a one-off concession on hospitality to local organising committees by the International Olympic Committee (IOC).
With the dust settling on London 2012, Michael Payne, a former head of the marketing division at the IOC and currently a key advisor to Rio 2016, identified hospitality as the main commercial issue to emerge from an otherwise flawless Olympic Games.
LOCOG was the first organizing committee allowed to sell its own hospitality programme, a concession drawn from the IOC in part because of IOC president Jacques Rogge’s decision to take a tougher line on revenue sharing.
This meant cutting back on central broadcast and sponsorship income earmarked for the local organizing committee and distributing more to national olympic committees. LOCOG asked for flexibility on hospitality and got the go-ahead to create the ‘Prestige Ticketing’ hospitality programme.
This decision may have added tens of millions of pounds to LOCOG’s bottom line, but some non-sponsor brands from the same sector as official TOP (The Olympic Partner) or LOCOG partners, were amazed to find themselves privy to the same hospitality experiences as their official sponsor rivals.
Michael Payne told Sports Marketing Frontiers: “Hospitality is one of the most valuable benefits that sponsors gain and if everyone can invite their key clients to the Games it fundamentally undermines the benefits of hospitality. I was surprised that LOCOG was allowed to go forward with it.”
Payne continues: “The jury is still out on whether it was successful. The revenue targets for Prestige Ticketing were significantly scaled back and one has to ask whether the final revenue generated was worth the significant interference to the main hospitality programme. On the operation side too, this could have driven the empty seats problem.”
Payne wants to go on record that LOCOG ran the best Olympic ticketing programme in history. “It was second to none and a model to build on in the future. But you can’t suck and whistle at the same time. London 2012 saw £2 billion from the corporate market and it presented hospitality as a huge benefit. I was repeatedly asked if I could look at the concept [when at the IOC] and I vetoed it. London, of course, is a very different market to Rio and it remains to be seen what will happen in 2016.”
Hospitality isn’t the only issue to emerge as London 2012 washes up after the Games. The lack of advertising opportunities around the host nation’s broadcast coverage was another drawback for official sponsors.
Writing in Sports Marketing Frontiers’ sister publication SportBusiness International, Timo Lumme, the IOC’s director of television and marketing, described London 2012 as a “great Games” but one that was not without its challenges from a commercial perspective.
“Because the noncommercial BBC was the over-the-air broadcaster in the host territory, there was no opportunity for partners to advertise around the broadcasts,” he said. “But while we will be looking into that subject in the future, the problem drove the solution and resulted in partners adopting fantastic creative strategies.” Lumme went on to say that the IOC signed off on more than 25,000 different partner activations – more than double the number for Beijing 2008.
While this would imply an unprecedented level of marketing engagement around the Games, Michael Payne believes the absence of advertising around the action on TV contributed to a more muted approach from some brands. “There was the opportunity for electronic advertising on other channels and other media, but the depth and breadth of marketing campaigns were weaker than expected,” he said.