What McDonald's Olympic exit says about the future of marketing around the Games

McDonald's still had three years left on its contract with the IOC

Life was very different in 1976, when McDonald’s first sponsored the Olympics: Britain suffered a heatwave, there was a row about Europe and the hit film of the year was All The President’s Men, an expose of dark deeds in the White House.

Since the Innsbruck Winter Games of that year, the relationship between the fast food giant and the world’s greatest sports event has been controversial, for obvious reasons.

The negative headlines have been a feature of every Games since, and are unlikely to have played a major role in the unusual decision on the part of McDonald’s management to end its current deal three years early.

The last deal was signed in January 2012 and was due to run out after the Tokyo Games in 2020 but its worth noting that despite pulling out with immediate effect, McDonald's will be present at next year's Winter Olympics in South Korea due to a local organising committee deal.

The rumoured cost of the partnership was in the region of $100m for eight years, which is a big financial commitment when there are so many new ways to spend the marketing budget today compared to 41 years ago.

The company has always maintained that the Olympic relationship was not about brand fame. “It is not an awareness issue,” said chief executive Steve Easterbrook, at the Sport Industry breakfast a few years ago. "People expect us to be a sponsor anyway, we could probably come out of sponsoring and people would still think we were associated with the event.”

But it was notable how irritated the sponsor appeared to be when the IOC changed its advertising rules ahead of the Rio Games last summer. This allowed non-official brands - i.e. companies that had not spent $100m on IOC rights - to use athletes to build an association with the Olympics.

The loophole was triggered by the explosion in digital and social media around sport.

Under the IOC's Rule 40, official partners such as McDonald’s were protected from competitors advertising during the games. Most significantly, the athletes were not allowed to use their social media platforms to plug their own sponsors, some of whom are direct competitors of the official brands.

When Rule 40 was relaxed, it prompted many in the Olympic brand family to look again at what it is they actually get for their money. This is the key question. What is it worth?

And irritatingly, it’s not possible to give a simple answer, because the value of sport sponsorship is contextual. By that I mean, what its worth depends on what you do with it.

For example, it’s hard to find a business case for the Olympics based on brand awareness. Almost uniquely in modern sport, the Olympics maintain a ‘clean stadia’ approach, meaning there is no commercial signage in the arenas, unlike say the Fifa World Cup or Formula One.

This lack of brand presence forces the brands to think more creatively about how to build an association with the famous five rings.

And I’d argue that McDonald’s did this better than most. The company’s designated rights mean that McDonald's was the only branded food out outlet of any type within the Olympic Parks, Media Villages or Athletes Villages at every Olympics.

You’ll remember the messaging around London 2012, with widely reported estimates that "one in five" of all meals eaten was a McDonald’s. These stories were propelled by pictures of Usain Bolt scoffing chicken nuggets after winning the 100 metres.

Below that level however, I was always a fan of the way McDonald’s activated around the theme of volunteering, which helped showcase the company’s excellent training and career development programmes.

For the IOC, the money will continue to roll in. But the exit of such a high profile B2C partner will cause some in the sponsorship world to pause and wonder what it means for the future of their industry.

Joanne Warnes is chief operating officer of HSE Cake, Havas’ sports and entertainment agency in the UK.

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