Ambush marketing and the Olympics

With the Games of the XXIX Olympiad in Beijing underway, it is interesting to look at the efforts by the Beijing Organising Committee for the Games (BOCOG) to fight against ambush marketing and draw parallels with this issue in New Zealand, particularly in the lead up to Rugby World Cup 2011.

As one of the most-watched events on the sporting calendar, the Olympics provide advertisers with an opportunity to market goods and services to a worldwide audience. As a result, the International Olympic Committee and BOCOG have established a partnering programme that is designed to grant exclusive rights to advertising associated with the Olympics in particular product categories.

Consequently, we have been seeing advertisements from a range of the best-known consumer brands each noting that they are an official (worldwide) Olympic partner. Some of those in the first tier of main Olympic sponsors are long-time Olympic partners. Kodak backed the first modern Olympics in 1896 whilst Coca-Cola has been a sponsor since 1928. Others, such as Chinese computer brand Lenovo, are recent entrants. Amongst other things, such partnering arrangements enable the advertiser to use certain Olympic imagery in association with their advertising campaigns. As a result, each Olympic sponsor is seeking to improve its reach in a country with 1.3 billion people and double-digit growth as well as a world-wide television audience in the billions.

The opening of the Olympics also sees a rise in the number of advertisers who seek to capitalise on the publicity and claim a share of that worldwide audience by stealth, without being required to pay the sponsorship and other fees required to become an official Olympic partner. Whilst 'ambush marketing' in its simplest form is a direct attack by a competitor on the marketing efforts of a rival which has paid for and secured a berth as (say) the official supplier of widgets to the Olympics, in recent years ambush marketing efforts have been much more subtle. Therefore, rather than seek to attack the competitor head-on and directly undermine their privileged (official) position, rival widget suppliers may seek to use a variety of indirect means to coattail on the popularity of the Olympics. A list of some of the best-known examples of ambush marketing, many of which have centred around the Olympics, are a testament to the inventiveness of the advertisers and advertising agencies concerned. Some of those are seeking to get a free ride on the bow-wave of publicity surrounding the event itself, while others are looking to undermine the position of a competitor which has positioned itself as 'official' sponsor. In a New Zealand context, perhaps the most widely viewed example of ambush marketing came during a Bledisloe Cup match in Sydney in 2002 when play was disrupted by two streakers wearing nothing but a Vodafone logo.

In keeping with the efforts by other Olympic Organising Committees, BOCOG has implemented a detailed campaign which is designed to combat ambush marketing surrounding the Beijing Olympics. This campaign has included public requests that advertising agencies, as well as the Chinese business community, work to contribute to the success of the Olympics. The Chinese business community has also been asked to abide by all relevant laws and fair and honest advertising principles. In addition, the campaign urged Chinese businesses to protect the legal rights of the Olympic partners and sponsors and Chinese advertising agencies were requested not to create or establish false or unauthorised commercial links with non-Olympic partners or sponsors in publicising their products and services. Chinese businesses were also urged to work together with their clients to avoid using Olympic symbols for commercial ends without authorisation.

BOCOG has also recommended that, during the period from 1 August to 27 August 2008, there be no unauthorised use of images of athletes, coaches and officials participating in the Beijing Olympic Games and Chinese media publications were advised to carry advertisements of Olympic partners or sponsors on their Olympic channels, and not allow non-Olympic partners or sponsors to appear on the channels.

Given the size of the audience and the amounts at stake, it remains to be seen whether during the four-yearly gathering of some of the biggest names in the sporting world, many with branding and other commercial arrangements unrelated to the "official" Olympic partners, calls to honour advertising principles will be an effective curb on commercial opportunism and creative inventiveness.

Ambush Marketing – the New Zealand legislative response

In a New Zealand context, particularly with Rugby World Cup 2011 in mind, there has been a legislative move to curb ambush marketing. The Major Events Management Act 2007 (Major Events Act), which is partly based on similar English legislation which was developed as a legislative strike against ambush marketing in advance of the 2012 London Olympic Games.

Whilst Part 3 of the Major Events Act provides a mechanism for the permanent protection of certain emblems and words, prohibiting the unauthorised use of emblems and words relating to the Olympics and Commonwealth Games, the Act is primarily targeted at ambush marketing associated with major sporting events. As a result, the Major Events Act provides a flexible regime for sporting events to be declared "major events" with the result that the following are prohibited in relation to that major event:

• ambush marketing by representations of association with the major event;
• other forms of ambush marketing that intrude on a major event; and
• ticket-scalping

In order for the protections under the Major Events Act to be utilised, the event in question needs to be declared a "major event" by means of an Order in Council made on the recommendation of the Ministry of Economic Development after consultation with the Ministers of Commerce and Sport. A recommendation from the Minister of Commerce is subject to two sets of requirements. First, the Minister must be satisfied that the event organiser has the capacity and intention to use all practicable measures available under the existing law to prevent unauthorised commercial exploitation of the event. Secondly, the Minister must apply a type of national interest test by considering the number of participants and spectators to be attracted by the event, and whether it will generate significant tourism opportunities and other benefits (including economic benefits) for New Zealand.

The recommendation process should be reasonably clear-cut for events such as RWC 2011 or another Americas Cup defence and possibly even the 2010 World Rowing Championships. The more difficult question will be in relation to events which, whilst significant in terms of size and organisational requirements, have a lesser economic impact than top tier events. For example, would the 2009 Under 19 Mens Basketball World Championships to be held in Auckland qualify?

The objective of the prohibitions on representations of association with the major event are to prevent one of the most common forms of ambush marketing where an advertiser misleads the public into thinking that the advertiser is an authorised partner or sponsor or is otherwise associated with the major event. The two primary exceptions from the prohibitions on ambush marketing by association are (logically) authorisation by the major event organiser and freedom of speech exceptions such as for the purposes of news coverage and personal opinions made for no commercial gain.

A breach of the prohibitions on "association" under the Major Events Act is an offence leading to the imposition of fines. However, this does not prevent the event organiser also pursuing civil remedies either under the existing law or seeking a range of civil orders under the Major Events Act, including by preventing repeated infringements and seeking the delivery up of offending material.

The second major limb of ambush marketing addressed by the Major Events Act is that of "intrusion". After the "clean stadiums" controversy affecting the hosting of the 2003 Rugby World Cup it is clear that legislation was needed to prevent commercial interests intruding on the attention of the audience for a major event. As a result, the Major Events Act enables the Minister of Economic Development to declare clean zones and clean transport routes associated with a major event. Clean zones and routes will cover the venue or venues for a major event as well as the major transport routes to and from the venue.

Once declared, the Major Events Act operates to prohibit the following activities without authorisation:

• street trading in a clean zone;
• advertising in a clean zone;
• advertising which is clearly visible from a clean zone; and
• advertising in a clean transport route.

Again, it is an offence to breach these restrictions and a breach can expose the offender to fines as well as civil remedies at the hands of the event organiser. There are also defences which are designed to protect existing businesses carrying out their ordinary business in accordance with "honest practices".

As a result, if it could be established that a business pays for, commissions or authorises the advertisement, a Bledisloe Cup-style streak at a major event would amount to an offence under the Major Events Act if the ground was declared a clean zone. For good measure, the Major Events Act also provides a separate offence of pitch invasion – thereby exposing the streakers themselves to liability for a fine or even a term of imprisonment.

The prohibitions on ticket-scalping make it an offence to sell or trade a ticket to a major event for a value greater than the original sale price of the ticket. This is straightforward enough, but also should serve as a reminder that even activities undertaken for a good cause, such as a charity auction of tickets to a major event, will need to seek authorisation from the event organiser.

One of the concerns about the offence provisions in the Major Events Act is the absence of a requirement that members of the public are reasonably likely to be misled. In this regard, the protections afforded to the organisers of major events and their authorised commercial partners can be seen to be more wide-reaching than those provided either under existing New Zealand laws, such as the Fair Trading Act 1986, or under some comparable "major events" protection measures implemented overseas. These concerns, coupled with issues about the practical likelihood of an event organiser seeking recourse to the armoury of weapons available to protect their commercial interests (and those of their authorised commercial partners) when they could have an enforcement officer appointed under the Major Events Act do the job for them. This could include obtaining search warrants and seizing offending materials. Effectively, it is suggested by some commentators that the organiser of a major event could launch such enforcement officers into the community in advance of a major event with few of the usual checks and balances which are applicable to the exercise of powers of search and seizure under other relevant legislation.

These criticisms have lead to suggestions that elements of the Major Events Act represent a legislative sledgehammer to crack a problem where more refined tools are either available or could be mirrored. In their defence, the proponents of the Major Events Act argue that such an extensive weaponry is needed to combat the inventiveness of some would-be ambush marketers. In addition, that it is in the national interest to ensure that there are no repeats of the "clean stadium" debacle.

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