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«Sponsorship Program Protection Strategies for Special Sport Events: Are Event Organizers Outmaneuvering Ambush Marketers? Steve McKelvey University ...»

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What has emerged through scholarly research, as well as debate among practitioners, is an evolution in our understanding of the concept of ambush marketing, as well as a fleshing out of the ambiguities that surround the practice. From the earliest definitions of ambush marketing as a pejorative term involving “unauthorized” practices has emerged not only an acknowledgment of the considerable vagueness that surrounds the concept but also a conceptual framework of ambush marketing that more accurately reflects the balancing of sponsors’ contractual rights against the rights of nonsponsors to maintain a market presence during an event through legal and competitive business activities. Hence, while at one extreme end of the ambush marketing conceptual debate we have what the Olympic Games have termed “parasite marketing” (Payne, 1993, p. 4), at the other end we have what has been referred to as “parallel marketing” (Glengarry, 2007).

Companies engage in ambush marketing for a variety of reasons. First, the company may view the official sponsorship rights as too expensive. Second, the company may be excluded from becoming an official sponsor because of a sport organization’s restrictions on the number of sponsors or specific product or service categories. Third, the company may be blocked from becoming an official sponsor because of a sport organization’s preexisting exclusive deal with a competing company. Various scholars have identified frameworks for categorizing a broad range of methods, or tactics, available to nonsponsors seeking to align with a sports event.

Meenaghan (1998), in suggesting that ambush marketing is a “continuum of activities that vary in the extent to which both legal and ethical limits are infringed” (p.

310), has identified the following ambush strategies: (1) sponsorship of the media coverage of the event; (2) sponsorship of a subcategory within the event coupled with aggressive promotions; (3) sponsorship-related contributions to the “Players Pool” (relevant to sport systems located outside the U.S.); (4) engagement in advertising that coincides with the sponsored event; and (5) use of miscellaneous ambushing strategies that serves as a catch-all for a wide range of “highly imaginative strategies (allowing nonsponsors) to associate themselves with particular events” (p. 112).

Other researchers have elaborated upon or expanded the avenues of ambush marketing tactics (Crompton, 2004; Crow & Hoek, 2003; McAuley & Sutton, 1999).

Event organizers and official sponsors typically position such tactics as unethical, without acknowledging that they are not illegal. As suggested by Crow & Hoek (2003), “sponsors may feel aggrieved by their competitors’ behavior but, unless a breach of trademark or some form of passing off has occurred, their ability to pursue the matter will be limited” (p. 2). The ambush marketing tactics discussed below, while by no means exhaustive, serve to illuminate the practical and legal implications for event organizers in seeking to prevent such tactics.

Sponsorship Program Protection Strategies Use of Generic Phrases Event organizers have become increasingly vigilant in protecting their intellectual property through the registration of marks and symbols associated with their events. Even phrases that incorporate the name of the host country or city have been granted trademark protection (e.g., “The Road to Indianapolis” for the NCAA Men’s Basketball Championships, “The Games in Salt Lake City” for the Olympic Games). However, ambush marketers often use generic phrases that refer to the event. For example, although the NFL owns trademark registrations for the phrases “Super Bowl,” “Super Sunday,” and their corresponding logos, the most popular way for nonsponsors to refer to the event is “The Big Game” (Petricca, 2006). For example, in conjunction with the 2005 Super Bowl, IGA promoted its “Big Game Blowout”; Sears promoted its “Big Game Sale” in print and broadcast advertising; and RadioShack advertised that “there’s still time to go to RadioShack before the Big Game” (cf. McKelvey, 2005). As discussed in greater detail below, the principles of trademark law provide scant protection from such use of generic phrases, thus presenting an ongoing challenge for event organizers.

Purchase of Advertising Time Within the Event Broadcast The purchase of advertising within a sporting event telecast is one of the most common and popular tactics of ambush marketing (McAuley & Sutton, 1999;

McKelvey, 1994b; Meenaghan, 1996). This tactic was also deemed to be the most effective form of ambush marketing, according to a survey of senior marketing executives of corporations actively engaged in sport sponsorship (McKelvey & Gladden, 2006). The highly publicized advertising campaigns of Wendy’s restaurants featuring founder Dave Thomas participating in a variety of Olympic sporting events alongside famous former Olympians (ambushing Olympic Games official sponsor McDonald’s) and American Express (ambushing Visa) serve to illustrate this tactic in the Olympics context (Sauer, 2002). Given its worldwide audience, telecasts of the Super Bowl have also provided numerous well-known illustrations of ambush marketing via event broadcasts. For example, for a decade beginning in the late 1980s, Anheuser-Busch annually aired it highly-publicized “Bud Bowl” commercials during Super Bowl telecasts, serving to ambush the NFL’s then-official beer sponsor Miller Brewing (Khermouch, 1998).

Because event organizers for major sporting events typically sell their event broadcast rights to broadcasting companies, they relinquish a measure of control over the advertisers as well as the advertising content. Consequently, although event organizers negotiate contractual language with their broadcast partners that provides their official sponsors the “right of first refusal” to purchase advertising within the event telecast, they are not in a bargaining position to prohibit their broadcast rightsholders from selling advertising to nonsponsors or even competitors of official sponsors. Such restrictions would put the rightsholders in an untenable position in their attempts to sell advertising to recoup the costs of broadcast rights fees. Event organizers can also contract with their broadcast partners to prevent nonsponsors’ advertising from using phrases associated with the event (e.g., “official sponsor of 556 McKelvey and Grady the Olympics telecast”) and to obtain approval rights on advertising content. The latter was an effective tactic for the NCAA, which was able to prevent the Hooters restaurant chain from airing a basketball-themed advertisement within the 2007 NCAA Final Four telecasts that featured noted basketball announcer Dick Vitale in a sexually provocative dialogue with a Hooters waitress (S. Bearby, personal communication, April 24, 2007). Furthermore, the ability of nonsponsors to purchase advertising through local network affiliate stations remains beyond the control of event organizers. The purchase of commercials within the broadcast cannot be assumed to be an attempt to ambush market, because it may be simply the most cost-effective way to reach key audiences. Furthermore, unless the content of the advertisement rises to the level of a legal claim of unfair competition or passing off, it may be impossible for an event organizer to prevent this marketing tactic.

Hence, it is incumbent upon event organizers to negotiate broadcast contracts that provide as much control as possible over advertising content, as well as over which companies can advertise. It has been argued that event organizers concerned over ambush marketing should consider reducing their broadcast rights fees in exchange for broader contractual protection aimed at thwarting ambush marketing (Shani & Sandler, 1998).

Presence in and Around the Event Venue Another popular form of ambushing marketing is for nonsponsors to secure a presence in and around the sporting event venue. In the early days of ambush marketing, companies would employ blimps and airplanes with trailing banners to ambush a major sporting event, but event organizers long ago closed this ambush opportunity by working closely with the Federal Aviation Administration and with host cities to enact air traffic restrictions during such events. Granted, aggressive and clever ambush marketers have continued to use other tactics for on-site presence, including securing strategically-placed billboards, erecting tents and inflatables in high-traffic locations, and distributing literature and samples to consumers attending the event.

The Olympic-themed ambush marketing activities of Nike and Target cited above serve to illustrate these types of activities. Event organizers have, over the years, achieved some measure of success in combating ambush marketers through more aggressive on-site policing and the establishment of “clean zones” in cooperation with host cities. However, as event organizers have sought to minimize such activity through host city contracts and legislation, they have, as discussed in more detail below, fueled the tension between free enterprise, the rights of fans, and the needs of event organizers to deliver ambush marketing-free environments to their official sponsors. Such activity also raises issues regarding the level of protection, contractual and otherwise, that has been promised to official sponsors, particularly in venues where nonsponsors have preexisting contracts for permanent signage.

Hence, as suggested by Hoek and Gendall (2003a), event organizers need “to provide transparency as to the actual rights purchased” by official sponsors, as well as “tighter sponsorship contracts that better define event owners’ responsibilities and sponsors’ rights as providing more grounds for action and a greater range of remedies” (p. 10).

Sponsorship Program Protection Strategies Conducting Consumer Promotions Another popular ambush marketing tactic is to conduct consumer promotions that associate the ambush marketer with popular sporting events. Such promotions typically are offered at retail locations and are supported by point-of-sale displays that feature visuals “themed” to the particular sporting event that use words that generically refer to the sporting event. For instance, a company intent on associating itself with the NCAA Final Four may conduct an in-store promotion offering consumers a free basketball in exchange for proofs-of-purchase or inviting consumers to enter to win “a trip for 2 to the College Hoop Championships.” While purposely avoiding the use of any registered trademarks, the displays are intended to lure consumers through an implied association with the NCAA Final Four. Such use of consumer promotions, typically conducted in concert with generic phrasing, continue to pose significant legal hurdles for event organizers in that they do not rise to the level required to bring a legal claim of unfair competition or passing off. Scholars have suggested that the extent to which official sponsors aggressively activate their sponsorship rights through consumer promotions can serve as a deterrent by overshadowing nonsponsors’ promotional activities (Meenaghan, 1998; Shani & Sandler, 1998). If a nonsponsor knows, or expects, that the official sponsor within their respective product or service category is going to aggressively leverage their promotional rights, that company may be less inclined to commit valuable marketing funds in an attempt to overshadow the rights of the official sponsors of that event.

Congratulatory Messages In an attempt to create an association with a particular event, companies will often create advertisements offering “congratulations” to participating teams or players.

For instance, only days after the 2003 Super Bowl, the National Dairy Council, although not an official sponsor of the NFL, ran a full-page advertisement in USA Today congratulating the game’s two MVPs in their “Got Milk?” moustache campaign. The one-time nature of such advertisements, coupled with the protections afforded by the First Amendment (Vassallo, Blemaster, & Werner, 2005), makes this tactic difficult to stop, particularly if the congratulatory message is not tied directly to the sale of a product or service. However, while research has shown the efficacy of this tactic to be limited (McKelvey & Gladden, 2006), event organizers and official sponsors should consider jointly implementing their own congratulatory advertisements. The pre-event education and public relations strategies discussed below also provide event organizers the opportunity to state their position regarding the use of congratulatory advertisements by nonsponsors.

The Legal Landscape of Ambush Marketing The debate over ambush marketing is further clouded by questions regarding its legality, because “purely defined, [it] does not involve traditionally illegal activities as trademark infringement or manufacturing of counterfeit goods” (Vassallo et al., 558 McKelvey and Grady 2005, p. 1340). In addition to the historical difficulties of relying on trademark law to combat ambush marketing in the United States, event organizers face additional hurdles when staging events in countries with even less developed trademark protection legislation and policy, such as China.

The Olympic Movement within the United States, governed by the United States Olympic Committee (USOC) has, because of the protections afforded by special legislation, been able to be extremely vigilant in its pursuit of ambush marketers (McKelvey & Grady, 2004). The Olympic program within the United States was created by Congress through Section 110 of the Amateur Sports Act of 1978.

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