#Sport: The digital battle between sponsors, rights holders and ambush marketers

Published 13 July 2017 | Authored by: Dan Smith

Digital media has transformed marketing, with global online advertising revenues predicted to exceed US$260 billion by 2020[1]. But the popularity of mobile, social media and digital media marketing generally has also opened up new fronts in the battle between rights-holders and ambush marketers.  And, in social media in particular, some of the most memorable advertising over recent Olympics, World Cups and other major sporting events, has often seemed to originate from unofficial sources.

What do we remember now from the last FIFA World Cup – the official sponsor campaigns or Snickers' response to Luis Suarez biting Giorgio Chiellini?[2]

In response to these new threats, rights-holders have looked to take steps to preserve the value in their official sponsorship packages.  The US Olympic Committee, in advance of Rio 2016, went so far as to warn non-sponsors, in correspondence, that they could not use #Rio2016 or #Team USA, share or retweet anything from official Olympic pages or reference any Olympic results. But it's questionable how effective such threats are, certainly when they appear to extend far beyond the legal recourse which is actually available.

So is it the case that official sponsors will, in practice, have to share the social media spotlight with their "unofficial" competitors?  And will that have a knock-on effect on the value rights-holders are able to recoup from their official sponsorship packages?  This article examines the contemporary battle lines between ambush marketers, rights holders and the law in the context of social media.  Specifically, it looks at:

  • How does the law combat ambush marketing in social media?

  • The use of intellectual property rights

  • Passing off, unfair competition, misleading advertising

  • Specific legislation for major events

  • Control over athletes

  • The practical difficulties of prevention and enforcement

  • Is the battle against ambush marketing in social media being lost? And what can rights holders do to regain the upper hand?

  • The future of ambush marketing

 

How does the law combatt ambush marketing in social media?

Ambush marketing in social media is an ever more popular means of ambush marketing 'by association' i.e. seeking to gain a marketing advantage by associating with an event (as opposed to ambush marketing through intrusion into the event space).

There are a number of traditional “legal” means of combatting ambush marketing by association, helping to preserve official sponsors' exclusive rights.  These tactics can be very effective, in the right circumstances.  However, they do not form an insurmountable barrier, particularly when it comes to the most sophisticated ambush marketers.  And social media has made it easier to work round the legal constraints, while at the same time presenting rights-holders with practical difficulties in terms of monitoring and enforcement.

 

Intellectual property

The organisers of major sporting events own numerous registered trade marks around the world.  The name of the event or competition, the logo, the mascot and other intellectual property assets will typically be protected as registered trade marks.  For example, FIFA has registrations covering FIFA WORLD CUP, WORLD CUP 2018, WORLD CUP 2022, FOOTBALL WORLD CUP (and many more).

Teams participating in competitions, players and, in the case of the Olympics, the national and international governing bodies for individual Olympic sports may all have their own registered trade marks. Rights-holders clearly look to enforce these trade mark rights against those making unauthorised use of them, whether online or offline.

Many aspects of a sporting event may also be protected as copyright works, including logos, mascots, anthems, imagery, broadcast footage, charts showing fixtures etc.  Where these are copied, the rights-holder may be able to bring an infringement action - for example, during the 2014 World Cup, FIFA approached Twitter with takedown notices (issued under the United States' Digital Millennium Copyright Act) after users infringed its copyright by using the World Cup logo as their avatars[3].

The issue for rights-holders, and their official sponsors, is that it is perfectly possible to associate with a sporting event, without using any of the rights-holder's intellectual property.  Major sporting events can attract huge global audiences and dominate the national discourse.  Ambush marketers simply do not need to use the words OLYMPIC or WORLD CUP or copyright works owned by the rights-holder; they can rely on allusions, allowing the public to make the association with the event.  For that reason, generic, non-sponsor campaigns about sport or national pride are a feature of every Olympic or World Cup summer.

These difficulties are often exacerbated in social media.  Mobile has turned every moment of a sporting contest into a betting opportunity (through in-play betting); it has also turned every moment into a potential ambush marketing opportunity.  Owning a registered trade mark for a team or event does not prevent a non-sponsor from talking descriptively about a world record or a red card or a pigeon on the pitch.  The viewing public – checking social media on a second screen, or later in the day – can immediately join the dots.

Many of the most well-known examples of “real-time marketing” – engaging with followers or customers instantly, based on real-time events – have been linked to sport.  Oreo's 'You can still dunk in the dark' tweet, during the power cut which interrupted the 2013 Super Bowl, achieved cut-through without any use of the words SUPER BOWL.  The timing of the tweet was enough to make the connection for the game's audience, triggering high levels of engagement, while side-stepping the risk of infringement claims.

In fact, the greater risk for real-time marketers seeking to exploit “moments” in sports contests may well be claims from individual athletes.  Some jurisdictions, such as the U.S. have very broad personality or publicity rights – for example, Michael Jordan secured millions of dollars in compensation when he sued two grocery chains[4] who published advertising congratulating him on his induction into the Basketball Hall of Fame. In the UK, we have seen the cricketer Kevin Pietersen accept libel damages[5] over real-time marketing which implied he may have tampered with his bat. So while marketers need to think before they post, it may not always be the rights-holder for the event who has a potential claim.

The saving grace for event owners, as opposed to their athletes, may be official hashtag use. For a major sporting event, the official hashtag is usually the event name or a variant (#Olympics etc.). For that reason, it will typically incorporate a registered trade mark (or be confusingly similar to a registered trade mark). Ambush marketers do not have to use the official hashtag but they may well be tempted to do so, to help channel users to their content. If marketers do adopt an official hashtag, then they may well expose themselves to an action for trade mark infringement. It's not cut and dried – there is a lack of case law providing a definitive position on trade mark infringement in hashtags and there would certainly be arguments in defence of “descriptive” hashtag use (e.g. if the post as a whole was unlikely to lead users to conclude there was an economic link between the advertiser and the event owner). However, for the time being, combating official hashtag use is likely to form a key part of rights-holders' anti-ambush strategy in social media.

 

Passing off, unfair competition, misleading advertising

In the UK, the specific common law right of passing off is sufficiently broad to cover the situation where an ambush marketer misrepresents an official relationship with a sports team or event.  The ingredients of passing offare[6]:

  1. goodwill (which will almost inevitably exist in major sporting properties);

  2. a misrepresentation (for example, where the public is confused into believing that an advertiser is an official sponsor); and

  3. damage (such as lost sponsorship revenues). 

A potential action in passing off (or perhaps an action in unfair competition in other jurisdictions) can therefore be a useful tool in a rights-holder's efforts to combat ambush marketing by association.

Again though, the protection afforded to rights-holders is far from comprehensive, particularly when it comes to experienced ambush marketers.  The key difficulty is in establishing that there has been a misrepresentation. Official sponsors do not tend to be shy about asserting their official status – the sums of money involved provide ample encouragement to make the most widespread use of official logos and designations. In that context, if the marketer is relying only on an allusion to an event (and save, perhaps, where that marketer is producing very high volumes of event-related content), it is very hard to argue that people would be confused into believing there is an official sponsorship relationship in place.

For the same reason, it is likely to be difficult to take action against an ambush marketer, on the grounds of misleading advertising.  For example, in the UK, the Advertising Standards Authority (ASA) has held that a beer ad which invited consumers to SUPPORT ENGLISH RUGBY did not mislead – the relevant brewer had been involved in supporting club rugby over a number of years and, the ASA found, the ad did not go so far as to misleadingly imply an official sponsorship relationship with the England Rugby team.

When it comes to social media, the smart ambush marketer should, if properly advised, be able to minimise the risk of action based on any kind of misrepresentation of official status, by relying only on allusions to the event, or a particular moment during the event.  A brand like Oreo is not seeking to imply that they are an official sponsor – if anything, they are simply looking to show that they are watching the game and joining the conversation, along with the rest of the viewing public.  And when everyone on social media is talking about a particular sporting event, what are the chances that the public will be confused or misled when a non-sponsor participates in that discussion, so long as they do not suggest they have “official” status or link the event directly to one of their products?

Even worse for the rights-holder, non-sponsors may wear their “unofficial” status with pride, producing campaigns which are sufficiently irreverent or anarchic that they are unlikely to have come from any official source. In the US, Newcastle Brown Ale's 'If We Made It' campaign actively celebrated the Super Bowl commercial they didn't have the permission (or the money) to make, leaving no room for confusion as to their [non-]connection with the event.

 

Specific legislation for major events

The organisers of the very biggest global sporting events – and those which command the highest price for official sponsorship packages – have sought to address some of the difficulties in using existing legal rights to control ambush marketing, by demanding specific legislation.  So the IOC, for example, requires, in the host city contract which it enters into in connection with each Olympic Games, that host nations introduce specific legislation, controlling unauthorised associations with the Games[7].  Similar, far-reaching legislation has been enacted in countries hosting the FIFA World Cup[8] and a number of other major events.

This specific legislation can make it much more difficult for ambush marketers – alluding to the event (and thereby avoiding the risk of a claim based on infringement of intellectual property rights) may still amount to an actionable “association” under specific legislation.

Marketers looking to draw links with a sporting event, in real-time on social media, therefore need to be even more cautious where specific legislation exists.  However, they can take comfort from a number of factors:

  • Only the very biggest events are able to demand the enactment of specific legislation – most obviously the Olympic Games and the FIFA World Cup;

  • Less high profile events, including for example, UEFA European Championship football, have not been able to secure equivalent protections over the course of recent tournaments (and even the IOC and FIFA may begin to struggle if the pool of willing host cities/nations continues to dwindle);

  • Audiences for major events are global but specific legislation will be local to the country hosting the event - it is therefore ineffective in controlling ambush marketing by association in digital media targeted at other territories (and potentially in the host country too, if large numbers of local users follow non geo-blocked accounts based outside the jurisdiction).

It's possible that indirect associations with the Rio 2016 Olympic Games in social media targeted at Brazil attracted enforcement action (based on the specific legislation which existed there).  But elsewhere, at least looking from the UK perspective, non-sponsor comment was widespread across Twitter and other platforms.

 

Control over athletes

Often the most successful non-sponsor campaigns around major events make use of high profile sports stars.  Beats, for example, has run a series of very successful campaigns around major events sponsored by its competitors, from the Olympics – when it gave out headphones to athletes who then wore them on camera - to last summer's European Championship football.  Social media – given its immediacy – is an ideal platform to promote a relationship with an individual, when that individual wins a medal, scores or is otherwise directly involved in the action.  Athletes, acting as influencers and promoting their sponsors on their personal social media pages, can obviously also be enormously valuable as a marketing tool.

One practical way to help preserve the value of official sponsorship packages is to impose controls on athletes as a condition of participating in the relevant event.  The IOC has gone furthest in this regard through Rule 40 of the Olympic Charter, which obliges athletes to respect a “blackout period”, preventing their name, image or performance from being used in advertising around the Games (without the IOC's permission)[9].  Athletes who contravene the rules to promote their sponsors face the prospect of sanctions which could include fines, removal of accreditation and disqualification.

Rule 40 is, however, not popular with many athletes.,

That's despite the IOC, through individual National Olympic Committees, allowing some increased flexibility around Rio 2016. A social media backlash – with athletes posing with tape over their mouths or using #WeDemandChange - is not exactly a positive outcome for the rights-holder or its official sponsors and it remains to be seen whether athlete pressure will result in a further relaxation of the rule.

 

The practical difficulties

There are also practical difficulties in enforcing against ambush marketing in social media, particularly opportunistic ambushes which are not part of an ongoing campaign.  Effective monitoring tools may not exist across all platforms (for example, on Snapchat) and the sheer volume of brands seeking to associate with a high-profile event may make selecting targets for action a labour-intensive exercise.

While the marketing benefit of a social media ambush will be realised immediately, any legal remedy for the rights-holder will take time. Unless special take-down arrangements can be negotiated with the various platforms, it may be long after the event before any action comes to a head (and experience shows that enthusiasm for legal proceedings can die away once the sporting contest is over). In addition, heavy handed action against social media posts could easily backfire by drawing more attention to an unofficial campaign.

 

Is the battle against ambush marketing lost in social media?

There is likely to be plenty of scope for the best-advised and most creative ambush marketers to associate with a sporting property without paying out for an expensive official sponsorship package.  And practically, enforcement is certainly not straightforward. But does that mean the battle against ambush marketing is lost, at least in social media?  And will the value of official sponsorship packages decline as a result?

Not necessarily.

Certainly, there may be a need for change.  Rights-holders and sponsors alike must do more, creatively, to increase the chances of official social media campaigns outshining the efforts of the non-sponsors. That is obviously easier said than done. Rights-holders in sport can be monolithic and resistant to new ways of working. Massive investment in sponsorship packages drives an inherent conservatism – the need to appeal to the maximum number of people and offend no-one. Conversely, ambush marketers may be driven to greater creative heights by the need to work round the legal restrictions which exist – they can't simply rely on the event brand to attract attention. They will always be better placed to poke fun at the pomposity and po-faced nature of many official communications, than a sponsor subject to stringent rights-holder approvals.

But an association with a highly visible sports brand, through an official sponsorship relationship, gives sponsors a powerful tool to drive an audience to their social media pages. And rights-holders control huge amounts of exclusive content – both in-play and behind the scenes – which can surely be better exploited (within the limits of broadcaster relationships) to allow sponsors to create unique and memorable advertising content. Exclusive content should be a key area of focus, as should the streamlining of approval procedures to allow official sponsors to be more responsive in social media – initiatives such as Coke's real-time newsroom for Rio 2016 could show the way.

Beyond that, rights-holders in sport have access to a huge and powerful stable of social media “influencers” – their athletes – some of whom command followings among demographics which are hard for advertisers to reach.  It may be counter-intuitive for organisations fearful of anyone going “off message” (and, like Rule 40, may well cause controversy over exactly whose sponsors benefit) but there is obviously tremendous scope for athletes to better develop their own social media 'brand' and followings, with potentially huge benefits for official partners.

Legal controls can also still play a part – specific legislation combatting “associations” by non-sponsors will no doubt remain a feature of the Olympic and World Cup landscape, at least for the time being.  Elsewhere, there will always be ambush marketers who trip up in social media and leave themselves exposed to legal action. Ambush marketers will no doubt continue to be tempted to tag their posts with #olympics or something similar, relying on the event brand, rather than just the creativity of their post, to draw users to their content. Others may overplay their hand and imply an official connection through the sheer volume of event-related posts. That may well trigger at least a cease and desist letter.  For example, when Zippo ran a #ZippoSavesOlympics campaign, after a Zippo lighter was used to relight the Olympic torch at Sochi 2014, Olympic officials reacted quickly and the content was removed[10].

Conversely, recognising that legal action can never be a bulletproof solution to ambush marketing, should free potential sponsors up to be more innovative in the demands they place on themselves, their agencies and the rights-holders with which they enter into partnership.  Where a rights-holder is unable or unwilling to support a sponsor creatively, then those sponsors will need to balance the benefit of a bland, “by the numbers” campaign linked to a traditional sports property, with that flowing from a more audacious campaign, either as an ambush or in connection with a newer, more forward thinking sport or entertainment property.

 

The future of ambush marketing

So what's next for ambush marketing?

Certainly, ambush marketing by association in social media seems set to continue.  Meanwhile, we will have to wait to see whether trade mark infringement claims, based on hashtag use, become rights-holders' weapon of choice in taking on the ambushers.

More broadly, it's possible that the new world of ambush via digital media will collide with old school tactics of ambush by intrusion.  Live streaming, via Periscope or Facebook Live, means that ambush marketers no longer have to rely on TV cameras or the press choosing to highlight an ambush marketing stunt.  All they need is a smartphone – something which can be carried without question into stadia around the world.

Could we see apps and games – a la Pokémon Go - drawing players to sports stadia to grab sought after virtual items or power-ups?  And could that form a platform for a successful ambush? What might ambush marketing look like in the context of e-sports?

A huge amount of creative energy has been invested in working around legal constraints to deliver effective ambush campaigns, so there's no doubt that innovative marketers will be considering the possibilities.  And, given that it seems unlikely that major sporting events will retreat from the current levels of spectacle, profile and cost – or demand less of an investment from their official partners – rights-holders have little choice but to continue to take the fight to the ambushers.

 

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About the Author

Dan Smith

Dan Smith

Dan is Director, Head of Advertising Law at Gowling WLG. 

Dan has particular expertise in digital media, advising on social media campaigns, app development, contracts and rights management in the increasingly complex digital landscape and emerging issues such as those associated with native advertising, ad blocking, vlogging and live streaming via apps such as Periscope.

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