Date: February 17, 2012
Subject: Point of View- Visa's Sponsorship of the Olympic Games
Team / Individual: Individual
The Takeaway: This global financial service wanted to evaluate its brandpositioning within the Olympic Games context in order to maintain itsmultinational category leadership. After a thorough look into the benefitssurrounding the sponsorship, I have recommended that Visa increase its adspends in order to create a distinguishable gap between it and its non-sponsorcompetitors. Followership of the Games on the national and international levelsprovides monumental opportunities for growth, which Visa should furthercapitalize on.
The full text may be seen below.
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Purpose:
The purpose of this memorandum is to evaluate the overall effectiveness ofVisa’s corporate sponsorship of the Olympic Games in order to determine whetheror not the company should further its media investment beyond the sponsorship,particularly within the US market.
History of Visa’s Sponsorship:
Visa became an official sponsor of the Olympic Games in 1986. As such, it wasawarded exclusive marketing and promotional rights within the Payment Servicesector for the Olympic Games. All official Olympic sales, including tickets,merchandise, and ATM withdrawals at the events must be Visa transactions. Thisallows Visa to raise awareness of its current products and services, increasecard issuance, and strengthen relations with its global network of financialinstitutions. 1
Considerations for Analyzing ROI:
· Awareness& Perceptions
· Media Exposure
· Financial Benefits
Awareness & Perceptions:
More than a quarter of consumers have positive perceptions of Olympic sponsorsand their advertisements during Olympics coverage. This is expected to increaseas the Olympic Games draw near. 2 Much if these sponsors’ success isbased on the idea that the Olympics is a culmination of intensive training, andthat for the US, the Games represent what it means to be an American. Sponsorscan connect with consumers through these ideals. According to TheSportJournal,Americans have a tendency to openly accept promotional techniques. 3A Nielson survey reported that future card holders’ perceptions of credit cardbrands are based entirely on word of mouth. 4 In China, Visa is thetop-of-mind credit card brand. It is also positioned as one of the most widelyaccepted credit cards in London and Rio de Janeiro. 31.5% of consumers weremotivated to visit Visa’s website during the 2008 Olympics. It is uncertain ifthe traffic is due to the consumers’ knowledge of the endorsement or the factthat non-Visa customers must apply for a Visa credit card in order to purchasetheir tickets. Even though exclusivity rights generate more Visa transactions,it does have its drawbacks. 44 million people in the UK are MasterCard or Amexholders and will have to obtain a Visa credit card in order to access theirfinances around the event. 5 14% of consumers surveyed by a Bostonmarket research firm also mistakenly identified American Express as an Olympicssponsor. Others that were mistakenly included were Subway, Pepsi, and Verizon,at rates similar to General Electric, Samsung and Panasonic being correctlyidentified as official sponsors. 6 This emphasizes the need for acompany to maximize its marketing efforts when sponsoring a massive globalevent so that it can ensure its differentiation as an official sponsor.
Media Exposure:
Olympic Broadcast Policy strives to make the Games accessible to anyone withtelevision and will only agree to broadcast on stations that do not charge forviewing. This benefits the Visa brand because cable advertising is a verylow-cost and highly effective opportunity. Visa was able to increase itsadvertising spend by 30% in its campaign for the Beijing games. 750% of Olympic marketing revenue comes from television broadcasting. Theestimated number of Olympic television viewers is an unparalleled 3.7 billion. 3The Internet, despite being limited by the International Olympic Committee’sPress and Radio/Television Commissions’ policies for viewing the Games, stillhas vast potential to reorient the forms of media used to spread awareness ofthe event. The development of mobile devices such as tablets and smartphoneshas also improved coverage and generated more brand exposure for some sponsors.However, Visa has had difficulties expanding its advertisements onto new mediaplatforms in ways that are fundamentally different from its current ideas ontraditional media. Nevertheless, while new media largely remains untapped,traditional forms of advertising are still, in their own rights, improving inboth quality and capability, and therefore continue to successfully provide theGames with a strong financial foundation.
Financial Gain:
Commitment is the key to predicting consumers’ future spending behavior becauseit measures current attitudes and emotions. This is where Visa must ask itselfif it is reaching out to its target market to create the strongest relationshipwith them as well as if it is utilizing its potential to gain new customers.The more committed the consumer is to the brand, the more he is likely tospend. 8 Consumer card expenditures at the Sydney Olympics totaled arecord $14 M and rose to a whopping $40 M during the winter games in Salt LakeCity just 2 years later. 7 As of September 2010, the US’s 269million Visa cardholders represented 87% of the American population. 9Further investing media spend within the US market would mean that Visa tapsinto a consumer base that nearly controls the entirety of credit and debit cardmarkets.
Recommendation:
The Olympic Games provide an unmatched opportunity for Visa to differentiateitself in the global and American financial sector, and therefore, Visa shouldcontinue its media investment within the US market. The Visa brand already hasconsumers’ high top-of-mind awareness in regard to credit card companies butshould increase its ad expenditures surrounding the Olympic Games in order tocreate a substantial gap between it and other brands such as American Expressand MasterCard so that its title as an official Olympics sponsor is more widelyrecognized. Developments in traditional media have given way for drasticallyimproved exposure and coverage of the Games and sponsors’ advertisements, andinteractivity generated from new media will only add to that growth.Exclusivity to the Olympics financial sector allows Visa to generateinternational business as well as appeal to its vast consumer base on the homefront. By continuing its role as an official sponsor, Visa remains inextricablylinked to the high return on investment that the Olympic Games provide to itsaffiliates.
References:
1 Visa. http://corporate.visa.com/media-center/press-releases/press977.jsp
2 Mintel. http://academic.mintel.com.ezproxy.lib.utexas.edu/sinatra/oxygen_academic/search_results/show&/display/id=545507/display/id=584084/display/id=584022?select_section=584024
3 The SportJournal. http://www.thesportjournal.org/article/marketing-and-promotion-olympic-games
4 Nielson. http://cn.en.nielsen.com/site/documents/Olympic_en.pdf
5 The Guardian. http://www.guardian.co.uk/money/2010/jun/24/london-olympics-visa-card-tickets6 Media Post. http://www.mediapost.com/publications/article/122665/olympics-sponsors-benefit-as-do-competitors.html
7 IncorporatingResponsibility. http://www.ir2008.org/PDF/monitoring/Olympics-Sponsorship.pdf
8 AME Info. http://www.ameinfo.com/61816-more1.html
9 CreditCards.com http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php
Subject: Point of View- Visa's Sponsorship of the Olympic Games
Team / Individual: Individual
The Takeaway: This global financial service wanted to evaluate its brandpositioning within the Olympic Games context in order to maintain itsmultinational category leadership. After a thorough look into the benefitssurrounding the sponsorship, I have recommended that Visa increase its adspends in order to create a distinguishable gap between it and its non-sponsorcompetitors. Followership of the Games on the national and international levelsprovides monumental opportunities for growth, which Visa should furthercapitalize on.
The full text may be seen below.
----
Purpose:
The purpose of this memorandum is to evaluate the overall effectiveness ofVisa’s corporate sponsorship of the Olympic Games in order to determine whetheror not the company should further its media investment beyond the sponsorship,particularly within the US market.
History of Visa’s Sponsorship:
Visa became an official sponsor of the Olympic Games in 1986. As such, it wasawarded exclusive marketing and promotional rights within the Payment Servicesector for the Olympic Games. All official Olympic sales, including tickets,merchandise, and ATM withdrawals at the events must be Visa transactions. Thisallows Visa to raise awareness of its current products and services, increasecard issuance, and strengthen relations with its global network of financialinstitutions. 1
Considerations for Analyzing ROI:
· Awareness& Perceptions
· Media Exposure
· Financial Benefits
Awareness & Perceptions:
More than a quarter of consumers have positive perceptions of Olympic sponsorsand their advertisements during Olympics coverage. This is expected to increaseas the Olympic Games draw near. 2 Much if these sponsors’ success isbased on the idea that the Olympics is a culmination of intensive training, andthat for the US, the Games represent what it means to be an American. Sponsorscan connect with consumers through these ideals. According to TheSportJournal,Americans have a tendency to openly accept promotional techniques. 3A Nielson survey reported that future card holders’ perceptions of credit cardbrands are based entirely on word of mouth. 4 In China, Visa is thetop-of-mind credit card brand. It is also positioned as one of the most widelyaccepted credit cards in London and Rio de Janeiro. 31.5% of consumers weremotivated to visit Visa’s website during the 2008 Olympics. It is uncertain ifthe traffic is due to the consumers’ knowledge of the endorsement or the factthat non-Visa customers must apply for a Visa credit card in order to purchasetheir tickets. Even though exclusivity rights generate more Visa transactions,it does have its drawbacks. 44 million people in the UK are MasterCard or Amexholders and will have to obtain a Visa credit card in order to access theirfinances around the event. 5 14% of consumers surveyed by a Bostonmarket research firm also mistakenly identified American Express as an Olympicssponsor. Others that were mistakenly included were Subway, Pepsi, and Verizon,at rates similar to General Electric, Samsung and Panasonic being correctlyidentified as official sponsors. 6 This emphasizes the need for acompany to maximize its marketing efforts when sponsoring a massive globalevent so that it can ensure its differentiation as an official sponsor.
Media Exposure:
Olympic Broadcast Policy strives to make the Games accessible to anyone withtelevision and will only agree to broadcast on stations that do not charge forviewing. This benefits the Visa brand because cable advertising is a verylow-cost and highly effective opportunity. Visa was able to increase itsadvertising spend by 30% in its campaign for the Beijing games. 750% of Olympic marketing revenue comes from television broadcasting. Theestimated number of Olympic television viewers is an unparalleled 3.7 billion. 3The Internet, despite being limited by the International Olympic Committee’sPress and Radio/Television Commissions’ policies for viewing the Games, stillhas vast potential to reorient the forms of media used to spread awareness ofthe event. The development of mobile devices such as tablets and smartphoneshas also improved coverage and generated more brand exposure for some sponsors.However, Visa has had difficulties expanding its advertisements onto new mediaplatforms in ways that are fundamentally different from its current ideas ontraditional media. Nevertheless, while new media largely remains untapped,traditional forms of advertising are still, in their own rights, improving inboth quality and capability, and therefore continue to successfully provide theGames with a strong financial foundation.
Financial Gain:
Commitment is the key to predicting consumers’ future spending behavior becauseit measures current attitudes and emotions. This is where Visa must ask itselfif it is reaching out to its target market to create the strongest relationshipwith them as well as if it is utilizing its potential to gain new customers.The more committed the consumer is to the brand, the more he is likely tospend. 8 Consumer card expenditures at the Sydney Olympics totaled arecord $14 M and rose to a whopping $40 M during the winter games in Salt LakeCity just 2 years later. 7 As of September 2010, the US’s 269million Visa cardholders represented 87% of the American population. 9Further investing media spend within the US market would mean that Visa tapsinto a consumer base that nearly controls the entirety of credit and debit cardmarkets.
Recommendation:
The Olympic Games provide an unmatched opportunity for Visa to differentiateitself in the global and American financial sector, and therefore, Visa shouldcontinue its media investment within the US market. The Visa brand already hasconsumers’ high top-of-mind awareness in regard to credit card companies butshould increase its ad expenditures surrounding the Olympic Games in order tocreate a substantial gap between it and other brands such as American Expressand MasterCard so that its title as an official Olympics sponsor is more widelyrecognized. Developments in traditional media have given way for drasticallyimproved exposure and coverage of the Games and sponsors’ advertisements, andinteractivity generated from new media will only add to that growth.Exclusivity to the Olympics financial sector allows Visa to generateinternational business as well as appeal to its vast consumer base on the homefront. By continuing its role as an official sponsor, Visa remains inextricablylinked to the high return on investment that the Olympic Games provide to itsaffiliates.
References:
1 Visa. http://corporate.visa.com/media-center/press-releases/press977.jsp
2 Mintel. http://academic.mintel.com.ezproxy.lib.utexas.edu/sinatra/oxygen_academic/search_results/show&/display/id=545507/display/id=584084/display/id=584022?select_section=584024
3 The SportJournal. http://www.thesportjournal.org/article/marketing-and-promotion-olympic-games
4 Nielson. http://cn.en.nielsen.com/site/documents/Olympic_en.pdf
5 The Guardian. http://www.guardian.co.uk/money/2010/jun/24/london-olympics-visa-card-tickets6 Media Post. http://www.mediapost.com/publications/article/122665/olympics-sponsors-benefit-as-do-competitors.html
7 IncorporatingResponsibility. http://www.ir2008.org/PDF/monitoring/Olympics-Sponsorship.pdf
8 AME Info. http://www.ameinfo.com/61816-more1.html
9 CreditCards.com http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php
