What are the risks and opportunities for ambush marketers at the FIFA World Cup Brazil?

Published 24 June 2014 | Authored by: Kevin Carpenter, Louise Millington-Roberts
Choosing which sport event to either sponsor or associate with is a difficult yet crucial decision for brand and advertising managers. The two largest global sports brands, Adidas and Nike, often want to be official sponsors for the same headline global sporting events, yet there can only be one.
Anyone watching Nike’s "The Last Game" computer animated short film, released ahead of the 2014 FIFA World Cup Brazil and part of their #RiskEverything campaign, would perhaps think they are an official sponsor / sports apparel partner. Well, you would be wrong.
 
Adidas are an official FIFA partner and supplier to the 2014 World Cup, and have been since the 1998 tournament in France,1 which provides them with (objectively) valuable commercial rights to exploit attaching to those prestigious events. So why do Nike have a brand value of $17,085m, ranked 24th overall in the world, and yet Adidas trail some way behind on only $7,535m, 55th in the world? (Best Global Brands 2013, Interbrand)2 Ambush marketing, and the ineffective laws and regulations that allow it, may be the answer.
 
Brand assets and intellectual property (‘IP’) such as official logos, emblems, mascots and slogans are FIFA’s most valuable commercial assets. Indeed the FIFA World Cup website has a dedicated section for 'Brand Protection'3 and has issued an open letter4 giving an overview of its policy on brand protection and the principal offences.
 
As part of the World Cup Hosting Agreement there are sizeable obligations on host country governments to pass the requisite legislation to protect FIFA’s IP, amongst other matters. The Brazilian government has passed a Federal Statute called the General Statute of the World Cup, n. 12.633/2012, with Article 16 of the General Statute providing a mechanism for the protection of the brand and symbols of the FIFA World Cup.5 In addition, much of FIFA’s general and World Cup specific IP is protected through a combination of laws and regulations in different territories of its members.

 

One area the General Statute covers is what FIFA calls ‘prohibited marketing activities’ (i.e. ambush marketing) and defines them on its website as, “[those] marketing activities which try to take advantage of the huge interest and high profile of an event by creating a commercial association and/or seeking promotional exposure without the authorisation of the event organiser.6 If a non-FIFA Commercial Affiliate engages in such activity then FIFA is entitled to apply for an injunction which will include the payment of legal costs an account of profits and/or damages. This is meant to protect, “the goodwill and positive image generated by the FIFA World Cup”. More seriously, the legislation also makes ambush marketing a criminal offence.
 
It is very rare for a brand to use direct ambush marketing techniques, where for example, a brand intentionally claims to be an official sponsor or uses protected IP without authorisation and in breach of regulations. More common is indirect ambush marketing. An indirect ambush is characterised by the concept of an “association” with an event and is the most difficult type of ambush marketing to regulate and police. Many view it as a clever form of advertising that can be very effective for the ambusher, however it is damaging for the official sponsor and event organiser as the ambusher is attracting consumers’ attention by undermining the official sponsor and denigrating the brand of both the event and the sponsor. Laws such as the General Statute, and the Glasgow Commonwealth Games Act 2008, define “association” as wide as possible to deter notorious ambushers such as Paddy Power and Nike from engaging in any promotional activity around major events.
 
The most notable ambusher of recent FIFA World Cups was Bavaria Brewery (Budweiser being the official World Cup beer sponsor). At Germany in 2006 male fans were asked to remove orange coloured branded shorts which had been distributed by the brewery and at South Africa in 2010 female fans wearing orange dresses were ejected. Two of the fans were arrested which caused a media storm, you have to question whether such measures will ever be taken again by FIFA as the Bavaria Brewery brand is now known worldwide.  
 
Nike is renowned for its innovative technology and marketing. Many of their campaigns have been seen during the Olympic Games, where Adidas is now the official IOC sponsor, including at London 2012 (which became known as the Nike Olympics) with its #FindGreatness social media campaign and Nike's Flyknit Volt running shoe7 worn by hundreds of the athletes. Nike could splash out to try and woo FIFA to become an official partner but it is highly unlikely that this will ever happen. Such a choice maybe determined by the value of the gross revenue of a particular event versus the likelihood of prosecution for unofficial association with an event (minus the undoubted publicity), with Nike appearing to have chosen the latter. Nike's Dermott Clearly, global Vice President and General Manager for Soccer, puts it best, “Although we're not a sponsor of the World Cup itself, we connect where it matters - by partnering with clubs, federations, and elite and everyday players. Ten teams at the tournament will wear Nike on the pitch in Brazil, including the hosts, along with hundreds of the players who will wear Nike boots. We're confident we will stand out on and off pitch better than any other brand.'' (Brandchannel.com, 9 June 2014)8.
 
The apparent boost in brand value for successful ambushers, and the lack of successful enforcement of the legislation and regulation truly raises the question of whether the current exclusive sponsorship model for rights holders such as FIFA is sustainable for a number of reasons including the proliferation of social media. This is especially so given it is unlikely such widely drafted prohibitions as seen in recent event specific legislation would ever be upheld if interpreted by a court. It is also certainly questionable whether specific regulations guaranteeing a sponsor’s exclusive rights unjustifiably limits the freedom of expression of visitors to an event.
Watch this video "Brazil World Cup business battle" where Kevin discusses ambush marketing for Reuters.

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About the Author

Kevin Carpenter

Kevin Carpenter

Kevin is a advisor and member of the editorial board for LawInSport, having previously acted as editor. In his day-to-day work he has two roles: as the Principal for his own consultancy business Captivate Legal & Sports Solutions, and Special Counsel for Sports Integrity at leading global sports technology and data company Genius Sports.

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Louise Millington-Roberts

Louise Millington-Roberts

Louise has extensive experience working with major brands in the field of sport, media, commercial and intellectual property law, providing practical commercial advice on specialist legal matters including rights and brand protection, the commercialisation of brand, sponsorship, endorsement, and event management.

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