What is ambush marketing?
Ambush marketing is "a marketing technique in which advertisers work to connect their product with a particular event in the minds of potential customers, without having to pay sponsorship expenses for the event." Classic examples of ambush marketing that have appeared on the biggest stages in the world include:
- Paddy Power who, at the time of the London 2012 Olympics, created and sponsored an athletics event in “London” although, crucially, London was in fact a small town in the middle of France.
- Budweiser, official beer of the 2010 World Cup in South Africa, had its thunder truly stolen by 36 women wearing orange mini dresses bearing the logo of a Dutch brewery, called “Bavaria Beer”. The two alleged organisers were arrested by South African police, before the then football pundit Robbie Earle, to whom the seats were originally allocated, was fired by his network employer, ITV.
- Beats Electronics, who, at the London 2012 Olympics, gave free “Union Jack” branded headphones to members of Team Great Britain resulting in a flurry of tweets from various athletes (including statements such as “Loving my new GB Beats by Dre #TeamGB #Beats”), followed by a number of swimmers wearing the headphones poolside before their races, despite the IOC’s prohibition on advertising.
Why does everyone get so hot under the collar about it?
Although sports fans may regard ambush marketing as harmless and ‘tongue in cheek’, it can have serious commercial implications. Big brands pay eye-wateringly large sums of money for the privilege of being ‘Official Sponsor’ of global events such as the World Cup or Olympic Games. If ambush marketing has the potential to raise the profile of a brand to the same extent as Official Sponsor status (or, in some cases, due to the high jinks usually involved, more) the prospect of paying vast sponsorship fees becomes much less attractive. This can have a direct impact on the staging of the event itself and, consequently, the overall experience for fans.
What can Official Sponsors and Event Organisers (like FIFA) do?
The primary concern of ‘Official Sponsor’ brands will be to protect their commercial investment. In some instances, the campaigns used by the ambush marketers may infringe their intellectual property rights, by making unauthorised use of their copyright works, infringing trade mark or design rights or by using branding that constitutes passing off. Brands will be able to enforce these rights against the ambush marketer. However, an IP infringement action can be costly and time consuming, and is often post-ambush when the damage has already been done (and once the benefit has been obtained by the ambush marketer). In addition, ambush marketers are often careful to frame their campaign so that no IP rights are infringed. For example, no rights were infringed in any of three instances referred to above.
An Official Sponsor will often look to the event organiser to take action against an ambush marketer. Organisers are keen to look after their Sponsors – to do otherwise would set a dangerous commercial precedent for future events. Ambush campaigns may infringe the IP rights of the event itself (such as a FIFA trade mark), although this is often rare. To address this rights gap, sports governing bodies have begun working closely with governments to provide specific and bespoke legal protection for sporting events and their Official Sponsors. London blazed the trail on this in 2012 by introducing a new ‘IP right’, known as the “London Olympics Association Right” specifically for the Games. The objective of this carefully crafted new right was to deter and capture activities attempting to create unauthorised commercial links or associations with the Olympics (exactly the nature of an ambush campaign). The new right also regulated the use of advertising space in the vicinity of the various sports arenas.
What can we expect at this World Cup?
Event organisers are now very much alive to what they perceive as the threat from ambush marketing. There is likely to be a heavy clamp down on any such activity at the World Cup in Russia, which begins in just a couple of weeks’ time. Brands weighing up the potential risks and rewards of staging an ambush campaign should be aware that Russia has introduced specific Federal Regulations covering the event. These Regulations explicitly prohibit any marketing at the event without FIFA consent (which would need to be obtained in advance through a formal application procedure). Only pre-approved sales and advertising will be permitted in the vicinity of the sport facilities.
In addition, any advertising material used within the Russian Federation during the 2018 World Cup which makes any reference to, or claims any affiliation whatsoever with, FIFA or the World Cup will require the express prior consent of FIFA. A brand engaging in such activity without consent can be fined between to 100,000 and 500,000 Russian rubles.
Ambush marketing is often a highly effective means of raising brand profile. Indeed, although many people would struggle to name an Official Sponsor of the last Olympic Games, an ambush campaign lasts much longer in the memory because of its daring nature and the press publicity it attracts. But this comes at a price – civil, or even criminal, liability and high fines. There is also the potential for wider damage to brands that have paid in full for sponsorship privileges, and a negative impact on the attraction of sponsoring global events, denying these events the crucial financial backing they need.
Marcus Pearl (UK) and Steve Smith (US) are transactional co-leads of BCLP’s Sports Sector Group. Ash von Schwan is a Senior Associate (London) specialising in IP and Alexey Gorlatov and Vlad Vdsovin (Moscow) advise on Russian commercial matters.