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International Olympic Committee’s Rule 40 dims spotlight on smaller brands

by Aug. 6, 2012, 4:03 PM

Rule prohibits athletes from promoting brands that are not official Games sponsors

Jennifer Escalas
Jennifer Escalas (Vanderbilt University)

When it comes to which companies can cash in on Olympic fame, at least during the Games, the situation can be a bit fuzzy, according to Vanderbilt marketing professor Jennifer Escalas. Escalas and her husband, Olympic swimmer (’80, ’84) Rafael Escalas, own a small performance swimwear company called Agon.

“Big companies such as Coca-Cola, Adidas and McDonalds have paid up to $150 million to sponsor the Olympic Games. These companies are banking on the positive feelings Olympic viewers experience when seeing their brands associated with the Olympic Games, building favorable brand associations and enhancing brand equity,” Escalas said.

Rule 40

But in order to protect their investments, the IOC has created Rule 40 which prohibits athletes from promoting non-sponsor brands while the Olympic Village is open.

“The argument is that if athletes are able to promote other brands, the link between the Olympic image and the brand image of the official sponsors will be diluted,” Escalas explained.

Rebelling against Rule 40

She pointed out that in response to the rule, which athletes feel limits their freedom of speech, the U.S. track and field athletes are leading a campaign against Rule 40, using the hash tag #WeDemandChange on Twitter.

“These athletes argue that they should be able to thank their sponsors, including friends and non-profit organizations,” Escalas said. “Limiting their ability to do so may make it difficult for them to obtain sponsorship in the future, which they depend on to excel in their sports, many of which do not have lucrative professional outlets.”

Limited spotlight

For many of these athletes, the Olympics are the one time the public spotlight is on them.

“This is the one time they have enough celebrity clout to make a difference for their sponsors. Their tweets and blogs giving fans an inside look at the Olympics Games are connecting them to consumers in an unprecedented fashion,” said Escalas.

Some companies appear to be pushing against the limits of Rule 40 as well, including Nike and Beats headphones. They’re engaged in a kind of “ambush marketing,” Escalas said, potentially diluting the massive investments of the official Olympics sponsors.

“There are interesting arguments to be made in support of and against all sides of this issue,” she added.

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