Paris (AFP) – LVMH’s high-profile and highly visible product placement in the Paris Games opening ceremony surprised marketing experts and raises the possibility it could cause problems for the International Olympic Committee with their long-term sponsors. The world’s largest luxury group has eked everything possible out of a partnership with the IOC, which cost LVMH a reported 150 million euros ($163 million) when it was agreed in 2023. What sets the Olympics apart from other events is that its stadia are free from advertising.
The uniforms worn by the French team at Friday’s opening ceremony were designed by LVMH, although due to the heavy rain, they were largely covered by ponchos. However, their branding was clearly on display on their trademark trunks and suitcases in one segment of the ceremony. Aside from that, at this Olympics, LVMH made the trunk for the torches, the medal bearers will be dressed in outfits designed by the group, and both the medals and their presentation trays are created by them.
The global exposure could not come at a better time for the group after they announced earlier this week their half-year net profit slid 14 percent. Michael Payne, a former head of IOC marketing who was credited with overhauling its brand and finances through sponsorship, says that while LVMH’s partnership with the IOC for the Paris Olympics has been “brilliant,” he thinks they got a “massive free ad” at the opening ceremony. Payne says it could upset the IOC’s 15 TOP partners—who, unlike LVMH, are tied in for several Games at great expense. He himself helped found the programme and advises several of the TOP partners. During the last quadrennial, they accounted for approximately 30 percent of the IOC’s $7.6 billion revenue.
“I thought the ceremony was spectacular,” Payne told AFP on Saturday. “The direction of stylish sponsor product placement may not be wrong, but needs exceptionally careful management. LVMH got a massive free global ad last night and other partners are all going to be asking, how did that work?” He said the IOC’s other partners could well be asking, “Why were we left out and given no chance to propose ideas or even had them rejected?” “LVMH partnership potential is right—but at your peril don’t get caught being unfair with your long-standing international partners,” said Payne.
Ricardo Fort, the founder of Sport by Fort Consulting and a former sponsorship executive for Visa and Coca-Cola, cast an admiring glance at LVMH’s ceremony exposure. “I can’t remember in an International Olympic Committee – IOC Opening Ceremony a branded moment like Louis Vuitton today in Paris. Their trunks were an integral part of the story,” he said on social media. The chief organiser of the Paris Olympics, Tony Estanguet, said he had no qualms with the LVMH segment. “We are very proud to have LVMH as a partner and they have contributed to the success of Paris 2024,” he told a press conference on Saturday, adding the group had “really bought into our ambition of organising this ceremony in the city.”
Terrence Burns, another former IOC marketing executive, says the Olympics would lose its unique appeal if advertising was permitted. “The clean venue is the most powerful example of the Olympics’ true differentiation,” he told AFP. “The clean venue affords an arena that is free of psychological or commercial intrusion.” This begs the question of what the TOP partners get out of their partnership if their brands are not seen at the stadia, but Payne says it is simple.
“This is why the Olympics is different from everywhere else. You’re not buying exposure,” said Payne. “If you’re buying at the World Cup, maybe 50% of your fee is allocated to the advertising around the stadium. What you’re buying is an association with the Olympic brand and everything it stands for. It buys you national depth because you then become a partner of the 200-plus Olympic teams.”
Payne recalled how things were very different at the 1996 opening ceremony in Atlanta when he took extreme measures to prevent ambush advertising. “I broke into a McDonald’s restaurant to turn off the electricity to pull down the big M sign,” he said. “They had positioned it front and centre of where each team had to march in. It took me until I think Djibouti marching in to break in. The staff member said, we’ll get arrested. I said, we’re all going to get arrested if you don’t turn that light off!”
Payne says a balance must be struck when it comes to the Olympics and branding. “You can’t turn the Olympics into a massive product placement exercise; you would totally destroy the brand,” he said.
© 2024 AFP
