Olympics-As unpredictable Games loom, Japanese sponsors struggle to adjust

By Eimi Yamamitsu and Maki Shiraki

TOKYO (Reuters) – With less than two months of the start of the Tokyo Olympics, Japanese brewery Asahi is still unsure whether fans will be allowed into the stadiums to purchase their beer.

Japan has scaled back its Olympic plans amid the COVID-19 pandemic and slow vaccine deployment. From now on, foreign spectators will not be allowed in the country and the organizers have not yet decided how many domestic spectators, if any, can attend.

More than 60 Japanese companies together paid a record-breaking more than $ 3 billion to sponsor the Tokyo Games, an event most Japanese now want to cancel or postpone again. Sponsors paid an additional $ 200 million to extend contracts after the Games were delayed last year.

Many sponsors don’t know what to do with advertising campaigns or marketing events, according to 12 officials and sources from companies directly involved in the sponsorship.

Asahi has the exclusive rights to sell beer, wine and non-alcoholic beer in the stadiums. But he won’t know more until a decision is made regarding domestic spectators, a spokesperson said. This is expected to happen around June 20, towards the end of the current state of emergency in Tokyo.

Even though spectators are allowed, the Tokyo government does not intend to allow alcohol at its public screening venues outside of the venue, a representative said.

Asahi has yet to make any major marketing changes, the spokesperson said. In May, she started selling her “Super Dry” beer with a new Tokyo 2020 design, as planned.

From the start, Japan seized the Olympics as a rare marketing opportunity: Tokyo’s bid boasted “omotenashi” – exquisite hospitality.

But the sponsors have become frustrated with what they see as slow decision-making and have complained to the organizers, according to one of the sources, an employee of a sponsoring company.

“There are so many different scenarios that we cannot prepare,” said the source, who like most sponsor interviewees declined to be identified because the information is not public.

Businesses have turned to organizers, while lower-level sponsors complain their concerns are not being addressed, the source said.

Sponsors are divided into four categories, with Global Sponsors, who typically have multi-year agreements, in mind. The other three levels are companies whose contracts are solely for the Tokyo Games.

In response to questions from Reuters about the difficulties the sponsors faced due to the late spectator decision, the Tokyo organizing committee said it was working closely with partners and all stakeholders.

He also said the committee is still discussing with relevant parties how to handle spectators and looking at factors such as efficiency, feasibility and cost.

About 60% of Japanese people are in favor of canceling or postponing the event, according to a recent poll. The Japanese government, the International Olympic Committee and Tokyo organizers have said the Games will go ahead.

LOST OPPORTUNITY

For global sponsor Toyota Motor Corp, the Games were an opportunity to showcase its latest technology. It planned to deploy around 3,700 vehicles, including 500 Mirai hydrogen fuel cell sedans, to transport athletes and VIPs between venues.

He also planned to use self-contained pods to transport athletes around the Olympic Village.

Such vehicles will still be in use, but on a much smaller scale – “far from what we had hoped and envisioned,” a Toyota source said. A full-scale Olympics, the source said, would have been a “big moment for electric cars.”

A Toyota spokeswoman declined to comment on whether there had been any changes in its marketing.

Wireless operator NTT Docomo Inc had been considering campaigns to demonstrate 5G technology, but the company is waiting to see what organizers decide regarding domestic viewers, a representative said.

Travel agencies JTB Corp and Tobu Top Tours Co launched Games-related packages in mid-May, but their websites say these could be canceled.

Tobu Top Tours “predicted that things would change by the minute” but sold their packages as planned, a spokesperson said. The travel agency and JTB said they would reimburse customers if no spectators were allowed or the Games were canceled.

Olympic sponsors had planned to provide Japan’s top CEOs with itineraries that included welcome parties with celebrities and famous athletes, private cars and lounges, the employee of the sponsoring company said.

Some companies have now reduced those plans to Games tickets associated with hotel stays or freebies, the person said.

“There is obviously a much more direct and immediate impact on local advertisers, local attendees and local businesses due to this lack of tourists and attendees,” said Christie Nordhielm, associate professor of marketing at the McDonough School of Georgetown University Business.

REPUTATION RISK

Some domestic companies, worried about opposition to the Games, have canceled plans to advertise Olympic athletes or support Japanese national teams, said a person with direct knowledge of the matter and the sponsor’s employee, who was informed of the problem.

“I’m concerned that running Olympic ads could be bad for the business,” said a source at a national sponsor. “At this point, no publicity we could get would make up for what we paid for.”

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 strayed from standard images of Olympic triumph.

“I don’t think people wrote these triumphant scripts,” said Grasse. “It’s a much more low-key sort of respect for humanity.”

Some top global sponsors, whose contracts run until 2024, are cutting promotions from Tokyo and postponing budgets for Beijing to 2022 or Paris to 2024, said a second person with direct knowledge of the matter, and the employee of the sponsoring company who was informed of the matter.

But the national sponsors do not have other Olympic Games.

“This is why we cannot just stop,” said the source of the national sponsor. “Even though 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)


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