Did you spot an ambush marketer?

24 Mar, 2011, Asha Nayar-Basu,

Did you spot an ambush marketer?

Over the last two decades, there has been an extraordinary growth in sport sponsorship and its commercial orientation. Even as India, Sri Lanka and Bangladesh are co-hosting the biggest cricket event, the World Cup, several companies have prepared a marketing blitz for the event. And at the same time, several others will seek to associate themselves with the World Cup and access to its audience and will try to capitalise on the accompanying goodwill without approval of the ICC or payment of the requisite sponsorship fees (sometimes without breaking a law).

When Jerry Welsh coined the term 'ambush marketing' in early 1990s, while at American Express, it was seen more as an act of subversion against expensive and often ill-conceived sponsorships. Today, however, the expression has acquired a negative overtone. It is more like commercial theft. Sport bodies across the globe are not only familiar with the phenomenon but have learnt to fear it. It is believed to be the biggest risk for advertisers seeking sponsorships at sporting events.

The best example of ambush marketing in India was during the 1996 Cricket World Cup. Coke was an official sponsor, but Pepsi's brilliant counter-ad, Nothing official about it, clearly occupied more of the consumer's mindspace. While PepsiCo did not hijack a brand, it almost hijacked the entire event. Studies have shown that ambush marketers often get at least as much mileage as the official sponsors.

That explains why sporting bodies are alarmed by the phenomenon, since ambush marketing poses an odd fringe gray area threat because it is not technically trespassing on a trademark. The status of sport stars as youth icons also increases the possibility of conflict between an event, the organisers and the individual sponsorship contracts.

Usually, the ambush marketer's intention is not to create an impression of affiliation with the sponsor's trademark but to create a nexus between the event and his brand. Thus, there is no confusion or deception between the two trademarks and, hence, there is no infringement.

For example, American Express bought substantial advertising time on TV networks to counter Visa's official sponsorship of the 1992 Olympic Games in Albertville, France, and Barcelona, Spain. Although American Express did not use the official IP, it featured ad spots that referred generally to 'winter fun and games' and depicted the French Alps, and ran advertisements that stated, And remember, to visit Spain, you don't need a visa.

It is an established fact that despite the inclusion of a term setting down the minimum visibility that the sponsor must be provided in the field of play and elsewhere, the sponsor may not be able to hold the organiser liable for an unforeseen incursion of a competitor upon that event. However, the broadcaster contracts may have clauses that restrict endorsements by competing brands, thus securing the sponsors rights on media.

Rising awareness of merchandise use to promote a rival brand has seen entry prohibited to those spectators who wear apparel bearing a rival's logo. During the Athens Olympics, strict rules by the Greeks and the IOC dictated that spectators be refused admission to events till they discarded food or drinks made by firms that were not official sponsors. The Olympics staff checked for t-shirts, flags, hats and bags displaying the unwelcome logos of non-sponsors.

One classic ambush marketing strategy is to buy up billboards during an event. During the 2008 Olympics, the Beijing Organizing Committee introduced priority allocation of prominent surrounding sites to sponsors and worked with the Beijing Municipal Government to prevent ambush marketing by controlling content of advertisements near games venues, regardless of long-term pacts.

In India, the 2003 case of ICC versus Arvee Enterprises and Philips , the Delhi High Court, while recognising the alleged act as ambush marketing, categorically stated that such acts were not, in fact, prohibited under Indian law and observed that "an ambush marketer does not seek to suggest any connection with the event but gives his own brand or other insignia, a larger exposure to the people, attracted to the event, without any authorisation of the event organiser".

Recognising the inadequacy of law to combat ambush, or parasite, marketing, which undermines an event's ability to attract future sponsors, several host countries of major sporting events such as Australia (Olympics 2000), South Africa (2003 Cricket World Cup), West Indies (2007 Cricket World Cup), China (Olympics 2008), Canada (Winter Olympics 2010) and the UK (Olympics 2012) either passed event-specific legislation or amended law to contemplate protection of official sponsors of sporting events. These legislations often have a limited life and cease once the event ends.

Event organisers and sponsors will have to develop intelligent strategies if they are to make the most of their huge investment in the games, such as:

Since a major chunk of an event's budget comes from corporate sponsors, broadcast rights fees and royalties from official merchandise licensees, event organisers should educate the public about the basics of intellectual property and ambush marketing in its battle against trademark infringement.

In some events, sponsorship rights to the event do not include associated media rights. Therefore, the event owners can consider reducing the cost of broadcast rights in return for obtaining more control over who these are sold to, thereby ensuring official sponsors can also purchase normal advertising time and space.

Finally, the success of a sponsorship rests on the sponsor's ability to sign a watertight contract that clearly defines event owners' responsibility and sponsors' rights as providing more grounds for action and a wider range of remedies.