MUST READ: You Can Pay $750,000 For Sipping Pepsi. Here's Why...

Barr. Rockson A. Igelige

Ronaldinho, one of the most skillful footballers to have ever walked the earth, got a lucrative $750,000-a-year endorsement deal with Coca Cola terminated
in 2012 for taking a sip of Pepsi at a news conference.

This got me wondering why  Coca-Cola ended its expensive relationship with the former star of Brazilian soccer just because he sipped from a can of Pepsi.


An Entertainment/Sports lawyer, from the University of Westminster, London, Barrister Rockson A. Igelige threw more light into that practice and explained that what Pepsi did is a practice in entertainment law referred to as “AMBUSH MARKETING.”  
It's an interesting read and I felt I should share. enjoy!

According to him, in a piece he titled, "Ambush Marketing; Threat To Sport But Strange To Sports Administrators In Nigeria", Global sport events like the Olympics and the World Cup have become battle grounds where marketers try every trick in their kitty in their bid to convince consumers of the desirability, if not usefulness, of the products or brands they promote. And the reason why marketers pull out all the stops at these events is plain enough:  they constitute the two largest global sporting events with mammoth broadcast reach, thus providing marketers the most advantageous occasion for advertising their products to consumers. The 2008 Beijing Olympics is a good example of the audience reach of the Olympic Games. It is on record that the games were beamed to a live audience of over 4.7 billion or 70 percent of the World population.

The tussle by different brands to outdo themselves at major sporting events like the Olympics or World Cup is linked to the commercialization of these events, with particular regard to corporate sponsorship.

Garrigues (2002) sees sport sponsorship as an attractive area for both companies and event organizers in the sense that they provide the most coveted room for selling their brands to a wide audience. There is also the additional benefit of a boost to the image of a company for identifying with the event and the real sport heroes. The major aim of sport event organizers is to maximize income, and corporate sponsorship is a very effective means of achieving that goal.

Corporate sponsorship of an event, according to Garrigues, is a commercial arrangement whereby a sponsor pays a fee for certain exclusive rights including the use of the official marks, logos, etc, of the organizers for the right to describe themselves as an official sponsor of the event in advertising and promotional campaigns for their brand to the exclusion of other brands or competitors.

Global sport sponsorship now involves billions of pounds or dollars. FIFA is said to have received around $1.6 billion in sponsorship revenue between 2007 and 2008 for the World Cup event that took place in South Africa (Cran and Griffiths 2010).  And, according to Crow and Hoek, the growth in sponsorship is as a result of two factors:  first, a sporting event medium is more effective than the traditional mass media for advertising (Meenaghan 1998a); and, second, event owners get higher returns (Altobelli 1997). Meanwhile, as sponsorship appetite grew, a company’s ability to enter into sponsorship contracts or deals dwindled drastically because of the increased cost and higher level of competition from other brands.

Sponsorship takes different shapes. It can be in the form of official sponsorship of the main event, or of athletes, or even a team. In most cases, companies that lose their bid to secure the status of official sponsor of the main event would opt for identifying with a particular team or athlete for a chance to showcase their brand to spectators.  Crag and Griffiths (2010) point out that this sort of back door sponsorship is highly frowned at by companies that spend huge sums for official sponsorship rights and expect their investment to be protected against other competitors. According to Crag and Griffiths (2010), the public and some sections of the media do not see anything wrong with the activities of back door sponsors. Rather, they applaud their creativity and innovative approach which tends to come with a good deal of fun.

However, it is this interplay of differing forms of sponsorship that gave birth to the phrase, ambush  marketing. While event owners and official sponsors see ambush marketing as detrimental to sporting events, those who engage in it see their action as squarely within the ambit of the relevant laws.

DEFINITION AND TYPES OF AMBUSH MARKETING

 Jerry Welsh sees ambush marketing as a legitimate strategy for occupying the thematic space of a sponsoring competitor, formulated to compete with that sponsor (Welsh 2007).

The result is that ambush marketing now describes a more aggressive and guerilla strategy of reaching out to consumers at the expense of event owners and official sponsors.

It is against this backdrop that Zimbo (1996) defines ambush marketing as “the unauthorized association of a business or organization with  the marketing of a particular event-gaining benefit for the marketing right or licensing fee applicable in order to be associated with an event, such as a sporting event”. In another breath, Moss (2004) also sees ambush marketing as a company’s intentional plan to weaken its competitor’s official association with a sport organization, acquired through payment of sponsorship fees, by running advertising or promotional campaigns near a station or in close proximity to an official sponsor with the sole purpose of confusing the public as to the identity of the official sponsor. These definitions by Moss and Zimbo (1996) reflect the views of those scholars that see ambush marketing as unethical and parasitic; a view that is contrary to that propounded by Jerry Welsh. This school of thought is of the view that the activities of ambush marketers, if left unchecked, would lead to dire consequence such that sponsorship of major events like the Olympics and the World Cup would be difficult to secure (Cran and Griffiths 2010).

Consequently, organizations like FIFA,  the governing body of the World Cup, now try  to secure assurances from host countries to put proper legislation in place to check the activities of ambushers before  hosting rights  are granted (Pina and Gil-Roble 2005).The Sydney 2000 and the Beijing 2008 Olympic Games are good examples of host countries that ensured proper legislation was enacted and gave assurances that the menace of ambush marketing would be vigorously tackled before they were granted  hosting rights (Abbotts 2011).

Ambush marketing can be viewed from two major angles (Dean 2002); namely, ambush by association (Moss 2004) and ambush by intrusion (Cran and Griffiths 2010).

 In ambush marketing by association, the ambush marketer intends to avail himself of the good will, reputation and popularity of a particular event by creating an association without the consent of the event owners (Moss 2004). This is usually done by using the official insignia of the event or other insignia so similar as to be capable of confusing the public (Dean 2002).The stunt pulled by Bavaria at the 2010 World Cup in South Africa where about thirty-seven young Dutch ladies appeared on television screens around the World in identical orange outfits, thereby succeeding in capturing the attention of cameras, is a good example of ambush marketing by association. Although at half time, the women were ejected from the venue and detained for some time at the FIFA office where they were interrogated about the stunt and the level of Bavaria’s involvement (Cran and Griffiths 2010). A similar event also occurred at the 1996 Atlanta Olympic Games of which Reebok was the official sponsor. Reebok expressed its dissatisfaction when the British sprinter, Lindfors Christie, showed up for a press conference sporting blue contact lenses displaying the logo of a rival company, Puma, an event that was seen worldwide and made front page news in many local and international newspapers (Garrigues 2002).

Ambush marketing by intrusion is a situation whereby the ambush marketer does not seek to associate with the event but rather to promote his own brand through the publicity generated by the event without seeking consent from the event owners or official sponsors (Deans 2002). Cran and Griffiths (2010) see marketing by intrusion as the ambush type to which organizers seem to object most strongly because more often than not the marketers would enter the arena of events themselves to carry out their business. Ambush marketing by intrusion, according to Dean (2002), includes but is not limited to the following practices: placing advertisements for a product on the outskirts of a stadium at which a sponsored sporting event is taking place; causing an aeroplane towing an advertisement for a product to fly over the venue of a sponsored event running a promotional competition with reference to a sponsored event directly or indirectly; running advertisements that make reference to a sponsored sporting event without suggesting that the advertiser is a sponsor of the event. Nike’s strategy at the 1996 Atlanta Olympics is a good example of ambush marketing by intrusion. Nike bought up almost every outdoor poster site in the city and set up its own “Nike village” next to the Olympic village. The effect was that Nike became the corporate face of the games without spending a penny on the event (Cran and Griffiths 2010).

The inadequacy of the existing intellectual property laws to curb ambush marketing in sporting events led to the birth of intellectual property plus as a complementary effort and an attempt to minimize ambush marketing practices.

According to Cran and Griffiths (2010), FIFA’s strong stance on ambush marketing activities in South Africa was a clear and strong message that exclusivity must be reserved for corporate sponsors and that action would be taken against violators. Johnson (2008) acknowledges South Africa as the first country, arguably, to take the boldest step in that direction.