Olympic Sponsors: Are They Getting "Hurt" By The Games?
CNBC Sports Business Reporter
Michael Maslansky of Luntz, Maslansky Strategic Research just went on the air with me. His company polled 1,000 people online and asked them various questions about the Olympics.
Here is the most important question. How much more or less likely are you to buy a product or service from a company because it is a sponsor of this year's Summer Olympics in Beijing?
12 Percent More Likely
26 Percent Less Likely
62 Percent No Impact
While 26 percent seems like a small percentage, it's huge in this case. This basically says that for every person that says that the Olympic sponsorship means something in a positive way towards a purchase, there are two people who will purposely stay away from that product because of the association with China and the perception of their human rights issues.
You think all the big sponsors paid tens of millions of dollars for that?
While I don't doubt that the answer here is representative of the general population, and that it’s amazing that buying a sponsorship could actually hurt you, it's still skewed in the overall scheme of things.
The fact is that these multi-national companies are worth billions of dollars and there are many other factors that drive purchasing decisions.
So, for example, the low price of a burger a McDonald's --a TOP Olympic sponsor--could allow a person who answered "Less Likely" in the above question to still show up and make a purchase.
You see, while it’s a good question and it’s worth asking, it can’t be viewed in a vacuum. Visa, an Olympic sponsor, just saw profit go up 28 percent.
Sponsor Johnson & Johnson’s profits were benefited partly by a weak dollar. Manulife Financial , also a sponsor, had a weak quarter but that was about declining equity markets.
I’ll also say that I suspect that if you asked that question in China, you’d likely get a more positive response on the sponsors, even though Maslansky says that data he has seen doesn’t reflect that.
Pulling out of the Olympics as a sponsor would kill that company’s efforts in China forever because China can and will control the ability of a company to do business there. And I suspect that all these companies have looked at the numbers and have found that, in the long run, it’s still better to be an Olympic sponsor than not.
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