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Toyota has pulled Olympics TV ads in Japan – here’s why it’s a smart move

With opposition escalating in Japan, Toyota has taken its Olympics-related TV ads off air in Japan

Just days away from the starting line, Toyota has made the decision to take its Olympics-related TV ads off air in Japan, despite its major sponsorship deal. While the news comes as a shock, The Drum talks to experts about this smart move by Toyota, and why it is unlikely that other sponsors will follow suit.

With opposition to the Tokyo 2020 Olympics escalating in Japan, ahead of the opening ceremony this Friday Toyota has taken its Olympics-related TV ads off air in Japan, despite being one of the International Olympics Committee’s (IOC) top corporate sponsors.

An Olympic Games like no other, three athletes have now tested positive for Covid-19 inside the Olympic village, just days after Japan declared a fourth state of emergency in Tokyo. It’s no surprise that 68% of Japanese people doubt the IOC can control the spread of infection. With spectators now banned from events, this is not the Olympic Games they have dreamt about since Tokyo won the bid in 2013.

Toyota’s decision to pull its TV ads and stop senior execs from attending the opening event is sure to sting, as the IOC now waits with bated breath for any more sponsors to follow suit.

While the move doesn’t paint a confident picture of the upcoming Games, have commentators been quick off the mark, blowing the news out of proportion? Here’s why this is actually a smart move by Toyota that sponsors are unlikely to copy.

What does this mean for Toyota’s sponsorship?

“There are many issues with these Games that are proving difficult to be understood,” says Toyota chief communications officer Jun Nagata on Toyota’s decision to not run Games-related TV adverts in Japan.

A last-minute bit of brand control, the strategic decision ensures the car brand stays in tune with its loyal Olympics-sceptic Japanese audience, of which it has a 50% market share. “Toyota’s decision won’t have been taken lightly, but as a Japanese company at the Tokyo Games, the decision may be more cultural and political than meets the eye,” insists Josh Krichefski, global chief operating officer and EMEA chief exec of MediaCom.

Considering its TV placements in Japan are but a small percentage of total ad spend and Toyota official vehicles will still be in attendance during the Games, Rik Moore, head of insight, strategy and planning at The Kite Factory, believes while it is clearly listening to its domestic audience, it’s a win-win decision.

“Toyota branding will still be emblazoned across the Games. It will no doubt still be activated (although in a more subdued manner) at the point of sale. TV airtime doesn’t even need to be canceled in Japan as Toyota can simply air alternative creative,” Moore explains. “Therefore, Toyota can show it is not tone-deaf to the public’s needs, but can still proceed with planned marketing, and still support the Games.”

And when Toyota signed the dotted line on its eight-year deal with the IOC (reportedly worth $1bn) in 2015, it made its intentions clear that the move was to help the car brand reach an international audience, recognizing the potential to put its cars and technologies on display to the rest of the world. While the decision keeps it safe with Japanese customers, Toyota has always set its sights further afield.

Sports consultant Tim Crow adds:" This is very smart marketing by Toyota. It plays well with public opinion in Japan and wins it worldwide headlines, when all it will be actually be doing is to redeploy some ‘icing on the cake’ domestic TV spend into digital or international media, which would already have been priorities given that it is a global Olympic sponsor."

Will brands follow suit?

This is the billion-dollar question as organizers wait to see if 60 Japanese corporations (who have paid more than $3bn for sponsorship rights) will untie their brands from the event. That’s bigger than any other host nation’s contribution ever.

Krichefski admits that even with the opening ceremony beginning this Friday, we could yet see a domino effect from brands following Toyota’s withdrawal.

However, “as most athletes have now entered the Olympic bubble and the Japanese government is insisting that the Games will go ahead, a full-scale cancelation is unlikely and any Covid-related disruption seems to be closely and stringently managed,” he argues. “But I’m sure brands will continue to decide right up until the 11th hour if their participation is worth it ultimately.”

And while withdrawals will clearly have an impact on the reputation and potential legacy of the Games, Krichefski says this will only be in the short term. “History will still remember the athletes that won and any short-lived disruption will be an incentive for everything to be even more carefully managed in 2024,” he insists.

If big brands decide to withdraw, it will be difficult to measure the impact it could have on the Olympics themselves, argues Gonzalo Brujó, global president at Interbrand. “But it is true that these brands would lose a unique opportunity to accompany and connect with the millions of viewers who will be connected in an edition that is already historic,” he says.

For Brujó, Tokyo 2020 is a great opportunity to see the strength of this virtual audience that deserves to enjoy the Olympics experience. “The withdrawal of sponsors and advertisers at this time might not even be good for the audience. The Olympic Games has the ability to generate very positive emotions among the spectators and the protagonists themselves,” he says. “Now that vaccination is progressing and we are close to ending the pandemic, the Olympics offers the perfect setting for brands to join the celebration through sport.”

Additional reporting by John McCarthy. After a year blighted by postponements and empty stadiums, fans and marketers have had plenty to look forward to during a bumper summer of sport. As part of The Drum’s sports marketing deep dive, which examined how our industry can capitalize on such spectacles, The Drum pulled together the best Tokyo 2020 Olympics ads so far.

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