Going for (marketing) gold: Advertising law in the summer of sport (Part 1)
This summer, the world of sport will captivate fans worldwide. From the thrill of cheering on national teams in the Euro, to witnessing Olympic dreams unfold, and following the grueling stages of the Tour de France, athletes will inspire audiences across the globe with their feats of skill and endurance. Yet behind the roar of the crowds lies a significant business opportunity: the vast audiences drawn to these events present lucrative possibilities for advertisers. In this 'Going for (Marketing) Gold' series, we'll delve into essential considerations and legal nuances for businesses looking to advertise to the audiences of global spectacles while navigating the complex landscape of advertising law over the next month.
As the world gears up for Paris 2024, we're getting ready to watch world-class athletes face off in the stadium, on the track and in the pool. But behind the scenes, an equally fierce battle is playing out: that of brands looking to bask in the spotlight of international events to showcase their products and services to the massive audiences drawn in by some of the world's largest sporting events.
There are different ways in which brands can officially associate themselves with the Olympic Games or other major sporting events: these include primarily becoming either an official sponsor of the event, such as via a partnership with the International Olympic Committee ("IOC") or becoming a domestic sponsor, via the national Olympic committee of the host country. Such sponsorships can come with significant benefits – including permitted use of official Olympic marks (in accordance with the sponsorship agreement), and potentially public goodwill.
But official sponsorship is expensive, and in many cases, sponsors are offered exclusivity in their category – meaning that if a competitor has already signed on as a sponsor, a brand may be foreclosed from becoming one themselves. Many brands therefore look for alternative ways to tap into the excitement and engage the event's audience. Their solution? Ambush marketing, which can boost visibility without an official sponsorship title – but comes with the inability to use official marks, an increased risk of challenge from the event organizer and the refusal of some media to carry advertising (for example, where the media itself has a relationship with the event organizer).
What is ambush marketing?
There are different definitions of ambush marketing. According to Merriam-Webster's dictionary, it is:
"Marketing in which a company attempts to advertise and promote its products by associating them with a public event (such as a major sporting event) without paying the fees that an exclusive sponsor is required to pay."
The Canadian Olympic Committee takes a somewhat more critical view, defining ambush marketing as:
"Marketing that capitalizes on the goodwill of the Olympic Movement by creating a false, unauthorized association."
While misleading representations to promote commercial interests are prohibited by Canadian law, as are infringements of third-party copyright or trademark rights, in practice, enforcement efforts by rights holders may be broader than the underlying legal prohibitions.
Despite the negative connotations that the term "ambush" may evoke, it is worth noting that in certain cases ambush marketing can be both legal and a clever marketing tool. As discussed in greater detail below, while this practice can infringe upon legal rights and be costly if done improperly, it can also be done in compliance with applicable laws.
Prime time for ambush marketing
Ambush marketing can occur in various situations and contexts; it is not limited to large-scale sporting events and has been used in a broad range of situations – including major movie premieres, holidays and even the births of the royal babies. Essentially, anything that garners significant media and public attention will attract advertisers and brands eager to associate themselves with it. Large sporting events, which generate international attention (and often carry a significant price tag for official sponsorship), tend to be prime targets for ambush marketing, including the Olympics, World Cup, Super Bowl and NHL Playoffs.
In the realm of major events, official sponsorships often prove mutually advantageous: the event host relies on the sponsorship fee paid by partners, and in turn, sponsors benefit from the visibility they gain from a well-attended, highly mediatized event. Subject to the sponsorship agreement, they may also gain the ability to associate directly with the event organizer, such as by using its famous marks in advertising to identify themselves as an "Official Sponsor," and public goodwill from financially supporting the event.
Given the cost of official sponsorship, and the reliance on event organizers on sponsorship fees, it's no surprise that both parties tend to be wary of ambush marketing, with event organizers striving to maintain the allure of sponsorship, and sponsors hoping to safeguard the – often exclusive – promotional rights for which they've made a substantial investment.
Ambush marketing can take various forms, including notably:
1. Ambush by association
When a brand implies an association with an event (or a participant in an event, such as a team, an athlete, etc.) without permission to do so. This can involve overt use of event-related intellectual property, such as logos, names, etc., or more subtly associating the brand with an event without making any direct reference to it, for example, by timely responsive messaging.
Ambush by overt, or potentially call to mind, use of event-related intellectual property carries the greatest risk, as it risks infringement of intellectual property rights – which are associated with statutory causes of action. Intellectual property owners can be expected, and in fact may be entitled, to enforce their property rights. Indeed, in some cases, failure to do so can jeopardize those very rights. International sporting organizations can be quite diligent in this regard.
A well-known example of the latter form of ambush by timely messaging, without use of third-party intellectual property, occurred during the 2013 Super Bowl, when the stadium lost power partway through the game. Within minutes, the brand Oreo cookies tweeted the message "Power out? No problem." along with an image of an Oreo cookie on a dark background, with the caption "you can still dunk in the dark." The tweet went viral – allowing the brand to instantaneously steal the spotlight (or lack thereof...) without being an official sponsor. Oreo did not explicitly refer to the event, nor did it use any protected names, logos or other intellectual property, or imply that it was a sponsor or otherwise associated with the event. Clever, indeed.
2. Ambush by intrusion
This involves more physical or temporal tactics where a business actively inserts its branding in the same physical space as the event, or times campaigns to run at the same time as the event, to benefit from its audience despite not being an official sponsor. A few examples that come to mind include:
- Flying a branded plane over an event's airspace,
- Handing out branded products to event attendees as they enter a venue.
- Placing a billboard activation right next to the event so as to ensure that it appears in video footage of the event or its activities.
While these approaches can avoid risks associated with the inappropriate use of third-party intellectual property, they may of course implicate other legal considerations, for example, municipal signage by-laws, and other prohibited conduct such as trespassing at a venue.
The approach utilized by champagne house G.H. Mumm during the 2018 Olympics offers an example.
Through its ambassador, Usain Bolt (a then newly retired Jamaican Olympic runner), G.H. Mumm ran a campaign (pun intended) where any athlete who won a medal during the games and posted a photo of themselves striking Bolt's famous pose on the podium, tagging him, would receive a free bottle of its champagne. The campaign went viral – allowing G.H. Mumm to benefit from the increased audience these athletes enjoyed, despite the brand not being an official sponsor. Since Bolt was not a participant in the games, tagging him in podium photos was difficult to argue contravened Rule 40 of the Olympic Charter (see below and our upcoming article on this topic!).
The ambush marketing rulebook
Many jurisdictions, including Canada, do not have laws that explicitly address ambush marketing – the practice is therefore often considered to fall into somewhat of a grey zone. Given the lack of legislation addressing ambush tactics directly, this practice remains subject to the general rules of advertising – including, notably, intellectual property laws and the prohibition on making false or misleading representations enacted by both the federal Competition Act and provincial consumer protection legislation.
As mentioned above, it is possible to engage in ambush marketing in a manner that stops short of violating applicable legislation or infringing on third-party intellectual property rights. By refraining from reproducing event logos, names, apparel or other protected intellectual property, and avoiding falsely creating the impression that they are a sponsor of – or are otherwise formally associated with – an event, brands can mitigate their legal risks.
However, brands considering such tactics should also note that some media entities that themselves have partnerships with the events, such as an "Official Broadcaster," may refuse to carry advertising they, or the event, deems too close to the rights or benefits the event organizer seeks to reserve for its official, paying sponsors. They should also consider public relations considerations – for example, the public audience may itself distinguish between sponsors that pay to support the events and athletes they love, and those they perceive as trying to capitalize on their audience without offering real support.
In the context of major sporting events, various steps have been taken to make ambush marketing more difficult, and to protect the intellectual property relating to an event. Event sponsors, of course, benefit from and enforce the protections available to all intellectual property rights holders – for example, under the Trademarks Act and Copyright Act. Marks associated with the Olympic movement also receive protection under the Olympic and Paralympic Marks Act. Violation of a party's intellectual property rights can not only contravene these laws – it can also lead to costly legal proceedings and financial penalties.
Event organizers may also seek to protect their interests though their own rules. While such may not have the force of law, they may become 'enforceable' through de facto means, such as where exhibiting media agrees to their content via an official partnership with the organizer, or where the organizer requires athletes to abide by them as a condition of participation in the event.
For example, in the Olympic Charter, the IOC asserts at Rule 7 that it has exclusive rights to all "Olympic properties" – which include:
"[t]he Olympic symbol, flag, motto, anthem, identifications (including but not limited to "Olympic Games" and "Games of the Olympiad"), designations, emblems, flame and torches, [...] and any other musical works, audiovisual works or other creative works or artefacts commissioned in connection with the Olympic Games."
The Olympic Charter also provides, at Rule 40, that athletes competing in the Games:
"[m]ay allow their person, name, picture or sports performances to be used for advertising purposes during the Olympic Games in accordance with the principles determined by the IOC Executive Board."
(In the coming weeks, we will be releasing further commentary on the restrictions established by Rule 40, especially as they pertain to Team Canada athletes and their individual sponsors.)
Host countries may also adopt specific legislation aimed at protecting the intellectual property associated with the competitions to be held on their territory. For instance, in preparation for the 2010 Olympic Games in Vancouver, Canada took such a step by enacting the Olympic and Paralympic Act1, establishing strict guidelines surrounding the use of various trademarks relating to the Olympic and Paralympic Games.
Takeaways and further considerations
When done carefully, ambush marketing may present a cost-effective way for advertisers to ride the coattails of major international events. But ambush campaigns can involve significant legal – as well as reputational and financial – risks.
Advertisers wishing to engage in this type of campaign must navigate trademark and copyright laws, avoid deceptive tactics and be wary of event-specific requirements such as Rule 40 of the Olympic Charter. They should also consider non-legal consequences, such as relationships with exhibiting media, and potential public perceptions of using such tactics.
Over the coming weeks, we'll be releasing a series of articles that delve deeper into these issues to help brands navigate the hurdles and minefields of advertising during this summer of sport.
Ready, set, stay tuned!
Footnote
1. S.C. 2007, c. 25
Read the original article on GowlingWLG.com
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.