Ambush marketing at CWG

Till the XIX Commonwealth Games (CWG) began, many companies were wary of letting their brand ride on the Games. Hence, official corporate sponsorships were limited to begin with. Having been launched successfully, the Games now find many riding the wave. Ambush marketing has taken over!

The surreptitious entry of non-sponsor brands into the Games Village and the eleventh hour tangential entry of companies have made non-sponsor brands ubiquitous.

Ambush marketing is not new to sports events. At the 1996 Summer Olympics in Atlanta, Nike saved $50 million by shying away from official sponsorship but mounted a marketing campaign plastering billboards around the city, handing out free banners to spectators and erecting an enormous Nike centre overlooking the stadium.

The tactics devastated the International Olympic Committee’s credibility and spooked other organizations such as FIFA into adopting more assertive anti-ambushing strategies. That explains why sporting bodies, including the CWG organizing committee (OC) are alarmed by the phenomenon, more so because ambush marketing is not illegal. Just unethical.

When Jerry Welsh coined the term ‘ambush marketing’ in the early ’90s, 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’s more like commercial theft. Sports bodies across the globe are not only familiar with the phenomenon, but have learnt to fear it.

Narrowly viewed, ambush marketing refers to the direct efforts of a party to weaken or attack a rival’s official association with an event acquired through the payment of sponsorship fees. More broadly, rather than direct misrepresentation or infringement, ambush marketing refers to a company’s attempt to capitalize on the goodwill, reputation, and popularity of an event by creating an association without the authorization or consent of the necessary parties. It is believed to be the biggest risk for advertisers seeking sponsorships at sporting events.

Ambush marketers simply develop a creative advertising campaign around the event, never use the event logo, trademark, and capitalize by association with the event without paying for “official sponsor” status. The Pepsi hot air balloon flying above Sharjah, on the day of the Coca-Cola Cup final, is one such example. And closer home, the straight fight between Hero Honda, a global sponsor of the Champions Trophy taking place in Sri Lanka, and its rival TVS. TVS has, according to industry experts, paid Rs 12 crore to rope in cricketer Sachin Tendulkar as its brand ambassador for three years.

In most legal systems it would be very difficult to argue that a parody is illegal or a copyright infringement as most often it is protected free speech and a form of permissible cultural criticism. But imagine if it makes better sense to ambush than to be an official sponsor, they would soon be left with nobody to foot the bill!

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

In India, existing law does not provide the “ambushed” entity or the event organiser a ready remedy. In the 2003 case of ICC vs Arvee Enterprises and Philips, the Delhi High Court, while recognising the alleged act as ambush marketing observed that such acts were not in fact prohibited under the Indian law. As a result, the contractual restraints are (for various technical reasons) of very limited use in curbing ambush marketing by opportunistic players.

It would be interesting to see how the CWG OC will deal with ambush marketing at the Games. Given the event’s ultimate success, after all that bad press, there may be more attempts on the closing day!

(The writer is partner S Jalan & Co, Attorneys, New Delhi, and Advisor, Communication, Sponsorship & Legacy, CWG 2010)