Olympics-As unpredictable Games looms, Japan's sponsors struggle to adapt
02/06/2021 08:15
By Eimi Yamamitsu and Maki Shiraki
TOKYO, June 2 (Reuters) - With less than two months left
until the start of the Tokyo Olympic Games, Japan's Asahi
Breweries still doesn't know whether fans will be allowed into
stadiums to buy its beer.
Japan has scaled back its Olympic plans amid the COVID-19
pandemic and a slow vaccine roll-out. Now, foreign spectators
won't be allowed in the country and organisers have yet to
decide how many domestic spectators, if any, can attend.
More than 60 Japanese companies together paid a record of
more than $3 billion to sponsor the Tokyo Games, an event most
Japanese now want cancelled or delayed again. Sponsors paid
another $200 million to extend contracts after the Games were
delayed last year.
Many sponsors are uncertain how to proceed with advertising
campaigns or marketing events, according to 12 officials and
sources at companies directly involved in sponsorship.
Asahi has the exclusive rights to sell beer, wine and
non-alcoholic beer at the stadiums. But it won't know more until
there is a decision about domestic spectators, a spokesman said.
That is expected to happen around June 20, toward the end of the
current state of emergency in Tokyo. urn:newsml:reuters.com:*:nL3N2NI12T
Even if spectators are allowed, the Tokyo government has no
plans to allow alcohol at its public viewing sites outside
venues, a representative said.
Asahi hasn't made major marketing changes yet, the spokesman
said. In May it started selling its "Super Dry" beer with a new
Tokyo 2020 design, as planned.
From the start, Japan seized on the Olympics as a rare
marketing opportunity: Tokyo's bid touted "omotenashi" -
exquisite hospitality.
But sponsors have grown frustrated with what they see as
slow decision-making and have complained to organisers,
according to one of the sources, an employee of a sponsor
company.
"There are so many different scenarios that we can't
prepare," said the source, who like most of the people
interviewed at sponsors declined to be identified because the
information isn't public.
Companies have vented to organisers, while lower-tier
sponsors complain their concerns aren't being heeded, the source
said.
Sponsors are divided into four categories, with global
sponsors, who usually have multi-year deals, at the top. The
other three tiers are companies whose contracts are solely for
the Tokyo Games.
In response to Reuters questions about sponsors' facing
difficulty because of the delayed decision on spectators, the
Tokyo organising committee said it was working closely with
partners and all stakeholders.
It also said the committee was still talking with relevant
parties about how to handle spectators, and was considering
factors such as effectiveness, feasibility and cost.
About 60% of Japanese favour cancelling or delaying the
event, a recent poll showed. Japan's government, the
International Olympic Committee and Tokyo organisers have said
the Games will go ahead. urn:newsml:reuters.com:*:nL2N2NI02Q
LOST OPPORTUNITY
For global sponsor Toyota Motor Corp 7203.T , the Games
were a chance to showcase its latest technology. It had planned
to roll out about 3,700 vehicles, including 500 Mirai hydrogen
fuel-cell sedans, to shuttle athletes and VIPs among venues.
It also planned to use self-driving pods to carry athletes
around the Olympic village.
Such vehicles will still be used, but on a much smaller
scale - a "far cry from what we had hoped and envisioned," a
Toyota source said. A full-scale Olympics, the source said,
would have been a "grand moment for electric cars".
A Toyota spokeswoman declined to comment on whether there
were any changes to its marketing.
Wireless carrier NTT Docomo Inc had considered campaigns to
demonstrate 5G technology, but the company is waiting to see
what organisers decide about domestic spectators, a
representative said.
Travel agencies JTB Corp and Tobu Top Tours Co launched
Games-related packages in mid-May, but their websites indicate
those could be cancelled.
Tobu Top Tours "foresaw that situations would change by the
minute," but is selling its packages as planned, a spokesman
said. The travel agency and JTB said they would refund customers
if no spectators are allowed or the Games get cancelled.
Olympic sponsors had planned to offer Japan's top CEOs
itineraries that included welcome parties with celebrities and
famous athletes, private cars and lounges, the employee at the
sponsor company said.
Some companies have now reduced those plans to Games tickets
paired with hotel stays or gifts, the person said.
"There's a much more direct and immediate impact, obviously,
on local advertisers, local participants and local businesses
because of that lack of tourists and attendees," said Christie
Nordhielm, an associate teaching professor of marketing at
Georgetown University's McDonough School of Business.
REPUTATION RISK
Some domestic firms, worried about opposition to the Games,
have called off plans for commercials featuring Olympic athletes
or supporting Japanese national teams, said a person with direct
knowledge of the matter, and the employee at the sponsor, who
was briefed on the issue.
"I'm worried that by airing Olympic ads, it could be
negative for the company," said a source at a domestic sponsor.
"At this point, no amount of publicity we could get would make
up for what we paid."
International advertisers still want to focus on Japan
because of the Olympics, said Peter Grasse, founding producer of
Mr+Positive, a Tokyo-based advertising production company.
But their message has shifted away from the standard images
of Olympic triumph.
"I don't think people have written those triumphant
scripts," Grasse said. "It's a much more kind of muted respect
for humanity."
Some top-tier global sponsors, whose contracts run until
2024, are scaling down Tokyo promotions and deferring budgets
for Beijing in 2022 or Paris in 2024, said a second person with
direct knowledge of the matter, and the employee of the sponsor
company who was briefed on the issue.
But domestic sponsors don't have another Olympics.
"That's why we can't simply quit," said the source at the
domestic sponsor. "Even if the marketing is ineffective."
($1 = 109.4000 yen)
(Reporting by Eimi Yamamitsu, Maki Shiraki, Ritsuko Shimizu,
and Ju-min Park; Additional reporting by Yuki Nitta, Chang-Ran
Kim, Sam Nussey and David Dolan; Editing by Nobuhiro Kubo, David
Dolan and Gerry Doyle)
((eimi.yamamitsu@thomsonreuters.com;))