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Many companies are keenly anticipating the Olympic and Paralympic Games
coming to London in 2012. At a hosting and infrastructure cost of £9.298bn, all of
which comes from the public purse, it’s reasonable to expect that companies will be
Ambush Marketing
able to gain some reflective benefit from the presence of the Games in London.
and the Law
Increasingly, legislation is being brought onto the statute books to protect the
investment of sponsors at major cultural and sporting events. The Institute
supports this in principle, recognising that companies that have invested heavily in Contents
sponsorship, have that investment protected from companies wanting to get free 3 What is ambush marketing?
publicity. There are seven ‘Tier One’ corporate sponsors, each paying £40 million to
the IOC. 5 Why is it important for marketers to know about?
However, there is a huge grey area when it comes to defining what counts as 8 Key points for marketers
an ‘ambush’ – as this paper explores. There is often an assumption, backed by 11 The current legal situation
legislation, that ambush marketing is a ‘parasitic’ process. Ethically, this may not
always be the case. 14 What’s not affected
This research paper builds on our 2008 paper The Event That Dare Not Speak Its 15 What is the Institute doing about the implications
Name and offers a guide to companies about what they can and cannot do during of the Olympics Act?
sporting events, with particular focus on the forthcoming Olympics. 19 What can marketers do?
To read further papers from the Institute, please visit www.cim.co.uk/agenda 21 What other events in the future are likely to include
where previous papers are available as free pdfs. To engage with the debate on this legislation restricting associative practices?
subject visit www.cim.co.uk/blog and add your comments to the live discussions.
22 Thematic space
30 Related courses
32 Sources
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What is ambush marketing?
To prove that goodwill has been ‘…any attempt by an individual or In the past, where defined at all, much more severe than anything
unreasonably taken advantage of, an entity to create an unauthorised ambush marketing has usually been previously on record. In the South
however, claimants must demonstrate or false association (whether or seen as an irritant at worst for most Africa World Cup case study on page
the presence of goodwill through not commercial) with the Olympic sporting events. Today, the situation is 23 two people believed to be behind
signs that are distinctive to the Games, the Olympic Movement, very different. Legislation is becoming the stunt were arrested, had their
claimant in the public mind; such the IOC, the National Olympic more stringent with regards to what passports confiscated and at one
as marks, logos, names and well- Committee of the Host Country companies can and cannot do. point were even facing the possibility
associated imagery. or the Organising Committee of Additionally, the enforcement of this of a jail sentence.
Olympic Games (“OCOG”) thereby legislation is increasing. In the South
The International Olympic Africa World Cup, criminal charges This is a new development in the
interfering with the legitimate history of marketing – that previously
Committee’s (IOC) definition of were newly introduced onto the
contractual rights of official acceptable, commercial practices can
ambush marketing for the purposes country’s statute books to cover
marketing partners of the Olympic now be faced with criminal charges
of the Olympic Games and ambush offences.
Games.’ iii because a powerful organiser doesn’t
Paralympic Games is:
Similarly for the 2012 Olympics, approve. The case study explores
“Key to whether Section 22 of the London Olympic the fact that in the South African
Games and Paralympic Games example, the offenders were not
or not ambush Act 2006 (‘the Olympics Act’) gives even wearing conspicuous logos and
What this means is that the penalties The Institute intends to alert
for marketers found guilty of ambush marketers to the fact that the
marketing are, in future, potentially penalties for ambush marketing are
gain good exposure for their own To clarify the muddy waters, the
now potentially extremely severe; this argument runs, no offence
product or service, without paying Institute believes that potential
for what is often an unclear and has taken place if (for example)
the kind of money that sponsors litigation against ambush should
dubiously condemned area of non-sponsors merely advertise
pay. That, it can be argued, is draw a distinction between whether
commercial practice. their wares in the vicinity of
not only legal but exactly how or not passing-off has been
events that have been sponsored
It is the Institute’s belief that competitive organisations should be attempted and/or confusion exists
by someone else, without intent
sponsors and official bodies enabled to behave. Preventing them in the mind of the customer as to
to mislead the consumer. The
should only have legitimate cause doing so is analogous to authorising who is the sponsor (illegal) and
distinction is subtle, but important.
to cry foul if the ambusher has a cartel or a monopoly to operate, gaining publicity for a company’s
Burton and Chadwick (2008) i claim
misled or confused the public that ‘passing-off is precisely the with unfair competitive advantage own products and services that has
into thinking that they are an aim of ambushers: to confuse enabled simply because the cartel not been paid for (legal competitive
official sponsor. This is what consumers and create the illusion or monopoly paid a fee. activity).
‘passing off’ means – presenting of an association to a property’.
yourself in ways that a customer There is a further weakness In law, any judgement would again
However, it is our contention that
might reasonably believe you are with the argument that ambush come down to whether or not the
this is usually simply not true.
officially representing something marketing should be discouraged company has unfairly traded on the
In many of the cases commonly
or someone, when you are not. If with legal authority, which is that goodwill of the event.
quoted when ambush marketing
‘passing off’ has occurred, then some companies who have been
is discussed, the ambushers are
it is correct to say that an offence ambushed, have themselves been
not trying to commit the crime of
has been committed. However, the ambushers on other occasions:
passing-off; rather, they want to
such as Visa and Pepsi.
In the most recent wave of the is that legislation increases with each Key points from the text that are of most concern to marketers are:
1
Institute’s Marketing Trends Survey, successive Games. Trademarks
Penalties against stadium ambush. According to the Act ‘the Secretary
35% of surveyed marketers said their like the rings device and the words
of State shall make regulations about advertising in the vicinity of London
company was likely to undertake ‘Olympic’, ‘Olympian’ and ‘Olympiad’
Olympic events.’ (Section 19). The implication from this is that no logos or
some marketing activity around have also always been registered and
anything that may be considered to make an ‘association’ may appear in the
the Olympics.iv This enthusiasm cannot be used without permission,
vicinity of the London Olympic events, unless the company is an official Tier
may diminish once the impacts as would be expected.
1 or Tier 2 sponsor.
of the Olympics Act become fully
2
appreciated; in the same survey, 88% What’s new is the way that certain The ‘listed words’. Words such as “gold” or “silver” cannot be used in
of marketers surveyed admitted that words and expressions, when used in combination with words such as “London” or “2012”. For the full list of
their knowledge of the Act was poor combination, are also now deemed to restricted words, visit www.london2012.com/documents/brand-guidelines/
or non-existent. be illegal as it is argued that by using statutory-marketing-rights.pdf We would draw marketers’ attention to pages
words in certain combinations, non- 23 and 25, which include the statements ‘An infringing association can be
The Olympics have always had sponsors are claiming an association created by the use of any “representation”.
a certain amount of legislative with the Olympics.
3
protection, although our observation Anything that appears to create an association where none exists
The guidelines, published since the Olympics Act, emphasise that such
representation can be created by any deliberate associative act; it doesn’t
just have to be by usage of the listed words.
4
The registered trademarks which, as is normal practice, are protected.
“London 2012” is a registered trademark. See ‘What are the Games’ Marks?’
section at www.london2012.com/about-us/our-brand/using-the-brand.php.
In the past, a cheeky association such as ‘Win gold in London next year’ might be
considered acceptable, but the Olympics Act makes a point of making this kind
of creative advertising illegal, by declaring that by doing so, you are making an
association with the Olympics where none exists if you are not a sponsor.
Listed Words
In any marketing communication from non-sponsors it is not permitted to use two
of the words in List A or any word in List A with one or more of the words in List B.
List A: List B:
Games Two Thousand and Twelve Gold Silver Bronze
2012 Twenty-Twelve London Medals Summer
Sponsor/s
The current assumption that ambush These words would seem noble if London 2012’s UK statutory established the London 2012 Inspire
marketing is ipso facto a ‘bad thing’ it were not for the fact that official marketing rights programme to allow other non-
needs to be addressed. In the early sponsors to the 2012 Olympics are April 2010 commercial organisations to apply
1990s, Jerry Welsh, former Global paying a total of £930 million, none of to associate with the 2012 Games
Marketing Head of American Express, which is returned to the public purse Section 4.12 of the London Olympic through use of the London 2012 Inspire
stated that: which is funding the entire £9.298bn Games and Paralympic Games Act mark. [This is detailed in section 4.11 of
‘…ambush marketing, correctly cost of hosting the Olympics.vii If 2006 defines the Authorised Users who the same report]
understood and rightly practiced, there is an ‘Olympic spirit’, surely it is are entitled to advertise and to use the
tarnished at least as much by official emblems. 4.12.3 Register of authorised users
is an important, ethically correct,
commercialisation than ambush LOCOG is obliged under the 2006
competitive tool in a non-
marketing. The literal reading of the 4.12.1 London 2012 Sponsors and Act to maintain a register of all people
sponsoring company’s arsenal
IOC’s view is that a company does not Official Suppliers etc authorised to create an association
of business- and image-building
‘discredit’ itself and does not ‘threaten London 2012 Sponsors and Official with the 2012 Games. A list of all official
weapons.’v
sport’ as long as it pays sums of money Suppliers, and the IOC’s TOP Sponsors London 2012 sponsors and suppliers
Welsh’s credentials in expressing this that most companies would only dream which have signed up until 2012, (ie all is publicly available via this register. The
view are perhaps confirmed by the of as their total marketing budget, companies which have paid, in cash or register also includes details of rights
fact that it was Welsh who coined the to the organising body. However, value in kind, for the right to associate granted to non-commercial partners,
expression ‘ambush marketing’. marketers need to work within these with the 2012 Games), are able to and will include class exemptions (for
parameters, and this is why this paper advertise their association with the example if all UK schools are authorised
This is in distinct contrast with the IOC’s is being published. 2012 Games within the terms of their to hold a London 2012 themed event).
view of ambush marketing, which is sponsorship agreements with LOCOG
expressed as: Note: Tier One income (7 x £40 million) goes to the
or the IOC (as appropriate). For a full http://www.london2012.com/
IOC, whilst Tier Two and Three income goes to LOCOG,
list of London 2012 sponsors in the UK documents/brand-guidelines/statutory-
‘A dishonest, parasitic and illegal as part of the £2 billion budget to stage the games.
The £2 billion staging budget consists of £650 million see www.london2012.com marketing-rights.pdf
way to do business. Companies anticipated final income from Tier 2 and 3 sponsors,
that practice it deceive the £350 million from ticketing and merchandising, and £1
http://www.london2012.com/
billion from the IOC.vii 4.12.2 Non-commercial partners
customer, threaten sport and documents/brand-guidelines/statutory-
LOCOG has/will authorise its key
discredit themselves. We combat register.pdf
non-commercial partners (eg Central
ambush marketing to preserve and
Government departments, local
promote the Olympic spirit’.vi Full text of the London Olympic Games
boroughs hosting the Games, and
and Paralympic Games Act 2006:
the National Lottery) to use the
http://www.legislation.gov.uk/
London 2012 emblems and otherwise
ukpga/2006/12/contents or pdf
associate with the 2012 Games in
available at http://www.legislation.gov.
a variety of ways. LOCOG has also
uk/ukpga/2006/12/data.pdf
Products, services or brands that were which have branded names – such The Institute has met with LOCOG money, the threat of punitive fines
already in place before the Act became as The O2 – will be re-named for the and urged them to communicate will make small companies avoid the
law in 2006 are not affected. So the Games as ‘The North Greenwich clearly how far they intend to exercise event altogether.
Little Chef ‘Olympic Breakfast’ will not Arena’viii. The fact that O2 is not a their rights in relation to the Olympics
be banned, nor will ‘Olympus’ cameras sponsor is incidental, as this ‘clean Act. We cannot get the details of the 3. The small-time association by
(Olympus, Olympic and OIympian are branding’ applies to sponsors and Act changed, but we can request companies, to which in the past a
registered trademarks of the LOCOG). non-sponsors alike. As an interesting assurance that companies will not be blind eye would have been turned,
comparison, in Germany in the 2006 prosecuted under the strict letter of does not adversely affect the
Other consequences include FIFIA World Cup, Hamburg’s AOL the law where what was previously interests of sponsors in the ways that
uncertainty about whether advertising Arena was renamed ‘FIFA World Cup common marketing practice might be are claimed. Customers understand
and franchises of non-sponsors will Stadium Hamburg’ for the duration of employed. the difference between a company
need to be covered up for the period the tournament.ix associating itself proximally with the
before, during and after the Games Defining what creates ‘association’ is a presence of a major global event,
in the specified vicinities around
stadiums and other event locations.
“Products, services sticking point. The Institute believes that
current ambush legislation is loaded
and the official corporate sponsors.
There will be zones around Olympic or brands that were unfairly against legitimate marketing on 4. Sponsors pay for a particular
product. They do not ‘own’ the
venues which will be clean from four counts:
branding, and the extent to which already in place surrounding infrastructure and should
1. Companies should be able to make not be protected from what people
this applies, and to who, needs
clarity. For example, Olympic venues
before the Act are reasonable levels of association with are eating, drinking or wearing
not affected.” the presence of a major sporting
event, especially when public and
in the defined spaces near the
sponsorship.
business money is being used to
fund that event and/or where that There is also a level of confusion
event is highly profitable for the event about what will happen to existing
organiser(s). brands within the defined areas of the
sporting events. The legislation states
2. It unfairly penalises small companies that the ‘Secretary of State shall make
in particular, who will be surprised to regulations about advertising in the
discover that they cannot use certain vicinity of London Olympic events’.
words in certain orders. Whilst These regulations are currently under
the threat of large fines may not consultation through the Department
necessarily prevent ambush attacks for Culture, Media and Sport. The
by large companies, as they may see wording of the Act relates to “events”
the cost of the fine as good value for so includes stadiums and the route of
the Marathon, and any other places it will exercise its legislative powers. This has happened in previous major are meant to be non-commercial. As
where events are taking place. We The judgement call is on whether the events, such as when attendees at the this is patently no longer the case, and
would like LOCOG to assure us, where interests of the sponsors have been 2004 ICC Champions Trophy were told we are seeing restrictive legislation
companies operate within these areas, reasonably damaged and/or whether they could not bring in mineral water brought in to protect official sponsors,
that common sense will prevail and goodwill has been appropriated. that was not Abbey Well (belonging surely it would be a logical step to allow
they will not be fined or prosecuted to sponsor Pepsi). We would like major sponsors to advertise in the
if (to take a realistic example) vans We would also like to see the distinction LOCOG to assure us that this will not stadiums, and then the impact of any
displaying logos are parked in the drawn between small companies be the case. A recent report highlighted potential ambushing is less damaging
vicinity. There must be a proven intent making a reasonable level of that ‘1 in 5 meals at the Olympics to the interests of the sponsors.
to ambush before the legislation is connection between their business and will be served by McDonald’s’.xi The One of the reasons given for anti-
used and in addition, it should be the presence of the Games, and a case Institute understands why the event ambush legislation is that sometimes
reasonably asserted that the ambusher of ambush marketing that is severe is largely sponsored by companies consumers are unsure exactly who are
intended to create confusion in the enough to negatively affect official such as McDonald’s and Coca-Cola, the sponsors; for example in the 1992
mind of the consumer – and not merely sponsors. As the text of the Act stands, as they are among the only corporates Winter Olympics, more people thought
because the ambusher was gaining both are seen as equitable in the eyes large enough to afford the Tier 1 Wendy’s was an official sponsor when
some publicity for their own product or of the law and we believe this is wrong. sponsorship fees. However, we believe it was McDonald’s, after Wendy’s had
service. it is inappropriate and perhaps even achieved an effective ambush.xii
The Institute would prefer to see an
unethical to forbid people from eating In-stadium advertising would help
The Institute argues that the legislation approach similar to that taken by
or drinking other brands, considering reduce this confusion and thus make
maybe unenforceable in the way it is the organisers of the Wimbledon
that the event is meant to be one the threat of ambush less of a problem.
represented in the text. A judgement tennis championship, which makes
celebrating health, fitness and activity,
statements such as: ‘we… have no
call has to be made on whether
a contravention is (a) a deliberate issue with spectators who bring their
as these are qualities which are not “We would like
always associated with the main
ambush that creates confusion in the own branded food and beverages
into the grounds… similarly, branded
sponsors’ products. to propose a
mind of the customer and so should
be prosecuted, (b) a coincidental clothing purchased for normal personal If these views are not seen as change to the
use, with no obvious ‘ambush’
appearance of brand or logo, or (c) a
level of association that is intended, potential, is entirely acceptable.’ x
acceptable as they might damage
profits, for future Olympic events the
rule preventing
but does not harm the official sponsor.
Current ambush legislation could be
Institute would like to suggest a change in-stadium
It is in (c) that we would argue there to the rule preventing in-stadium
should be some leeway, especially for
used to remove spectators wearing,
or consuming, branded products that
advertising. Presently the stadiums are advertising.”
small companies, and we would like to ‘advertising-free’ because the Games
are not sponsor-branded products.
see LOCOG define the extent to which
There are supplier opportunities It’s the Institute’s hope that the
for companies in areas such as legislative powers will only be
construction, leisure and tourism, exercised when there is a clear
transport, security and logistics. Many intent to directly ambush one of the
of these contracts are being awarded events in the Olympics, and that the
to small or medium sized companies, broader implications of the associative
and interested companies are directed restrictions will not be used to penalise
to www.competefor.com. companies wanting to gain benefit from
the presence of the Games. We would
Outside of contracts, for companies like to see LOCOG confirm this is the
wanting to gain some benefit from case. Otherwise, the only safe option
the Games, the key is for marketers for most companies, particularly smaller
to find creative and innovative ways ones, will be to steer clear of any
around the strictures of the legislation. mention of the Olympics at all. Small
Non-specific associations with health, companies are, it could be argued, in a
fitness and athleticism will not infringe no-win situation: they cannot afford to
the Act. LOCOG has published a guide be a sponsor; being a supplier does not
‘Business – What you need to know’ give any exemptions; and few will be
which outlines some examples of what able to afford the risk of litigation.
would and would not be against the
law. This guide is available from http://
www.london2012.com/documents/
“The key is for
brand-guidelines/guidelines-for- marketers to
business-use.pdf. The Institute’s earlier
paper The Event that dare not speak find creative
its name: Marketing and the Olympics
also covers this in some depth. This
and innovative
is freely available at http://www.cim. ways around the
co.uk/resources/emergingthemes/
home.aspx. strictures of the
legislation.”
England’s recent bid for the 2018 hosting of the event; and paid for the
World Cup was unsuccessful, but new sports stadia and infrastructure
legislation at least as strict as that for itself. On top of this, Fifa has tax-free
the Olympics Act, and possibly as status in Switzerland and insists host
strict as the South Africa World Cup, countries waive taxation as part of the
is likely to be brought in for the 2018 ‘right’ to host the World Cup. The final
and 2022 events. We would question cost to the South African government
why the penalties are so severe when for hosting the event was estimated to
the events are so profitable. The 2010 be over $4 billion.xiii
World Cup, for example, is forecast to
have brought Fifa profits of $2.5 billion Other events which will be subject
(£1.7 billion). Despite this, the South to similar ambush marketing
African government takes no share of legislation include the Glasgow 2014
merchandising, ticketing or television Commonwealth Games and the Isle
rights income. It does not tax Fifa on of Man Commonwealth Youth Games
merchandising and match day events. 2011. Interested marketers may find
It has paid Fifa a premium to secure the the following links useful.
The Glasgow Commonwealth Games Act 2008 gives details about the 2014 Games:
http://www.legislation.gov.uk/asp/2008/4/contents and pdf available at
http://www.legislation.gov.uk/asp/2008/4/data.pdf
Arguments in favour of ambush In other words, ‘when you own and The Dutch brewing company which would have been a clear
marketing are increasingly academic license Kermit, you have only given Bavaria has achieved fame of sorts breach of the rules. Whilst Fifa wants
because the legislative environment the rights you own to one specific for several high-profile ambush to protect the rights of the official
becomes more and more loaded in frog – not to all frogs, and maybe not events in recent years. The most sponsor (Budweiser in the case
favour of bodies such as Fifa and even to all green ones’. Anything not prominent was in 2006 when the of the World Cup) does wearing a
the IOC. However, it’s worth pausing specifically licensed in this way ‘is up for company gave orange lederhosen particular colour count as an act of
to consider what it actually is that commercial grabs.’ For Welsh, ‘that’s to Dutch fans at Fifa World Cup ambush marketing?
companies buy when they pay for as it should be in sponsorship and as it matches in Germany. Orange is a
sponsoring an event, as this can lead is in the larger world of both commerce colour associated with the brewery; Looked at more closely, it can be
us to interesting conclusions about and life.’ and the trousers were deemed seen that there is a small label on
whether ambush marketing (where to be creating an ambush, so the each item of clothing, albeit not
there is no attempt to mislead) does, or It’s possible that in the future, we fans were forced to part with them significant enough to get picked up
does not, actually infringe the assumed will see challenges to the legality of (leaving some of them to watch the by the TV cameras. This would mean
rights of sponsors that are now being preventing ambush marketing. In the match in their underwear). that it’s technically against the rules.
routinely supported in law. meantime, we need to be aware of However, plenty of fans arrive at
the restrictive detail of legislation for In Johannesburg in this year’s World sports events wearing clothes with
Jerry Welsh is again lucid on this area. sporting events, and find other ways Cup, 36 Dutch fans were ejected small logos on them that most of the
For Welsh, the point to understand to compete on a playing field that has from the game between Denmark time, will not be that of the official
is that ‘in buying a sponsorship, a become distinctly less level in recent and the Netherlands, because they sponsor.
company buys only that specific years. were dressed entirely in orange. Fifa
packaged product […] the company had the fans removed, believing they The take-out is that, as in this
does not thereby purchase the rights “It’s worth pausing were not fans at all but hired models,
and brought charges against the
case, it must be the intent to
ambush that triggers usage of the
to all avenues leading to the public’s
awareness of that property; and, more to consider what two women they believed to have legislation – there are no objective
planned it. distinctions between what is, or
importantly, […] does not buy the rights
to the entire thematic space in which
it actually is that isn’t, an ambush in terms of actual
the purchased property is usually only companies buy The impacts of the Bavaria cases
are interesting. Firstly, can it really be
actions. Furthermore, as this paper
has argued, it should be intent to
one resident’.
when they pay for a the case that simply wearing orange pass-off, create confusion in the
creates an ambush? In neither mind of the customer about who
sponsorship.” example were the people concerned the sponsor is, and/or to imply a
flaunting conspicuous logos; the connection between the company
clothes did not have ‘Bavaria’ and the event, that constitutes an
written in large letters across them, illegal ambush.
The full text of the London Olympic Games and Paralympic Games Act 2006 is available at
http://www.legislation.gov.uk/ukpga/2006/12/contents or pdf available at
http://www.legislation.gov.uk/ukpga/2006/12/data.pdf
The full text of the Olympic Symbol etc. (Protection) Act 1995 is available at
http://www.legislation.gov.uk/ukpga/1995/32/contents or pdf available at
http://www.legislation.gov.uk/ukpga/1995/32/data.pdf
Link to the restricted words
http://www.london2012.com/documents/brand-guidelines/statutory-marketing-rights.pdf
Link to the guides for business, and small business, that LOCOG has published
Business – What you need to know
http://www.london2012.com/documents/brand-guidelines/guidelines-for-business-use.pdf
Non-commercial organisations – What you need to know
http://www.london2012.com/documents/brand-guidelines/guidelines-for-non-commercial-use.pdf
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Take control of your development today – if you’re already a Games Limited (“LOCOG”)
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