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From Coronavirus Fears to Strict Marketing Rules, How the 2020 Summer Olympics Will Challenge Athletic Brands

Update: Feb. 25, 2020 5 p.m. ET

Dick Pound, a senior member of the International Olympic Committee told the Associated Press on Tuesday that if it’s deemed too dangerous to hold the Summer Olympics in Tokyo because of the rapidly spreading coronavirus, organizers are more likely to cancel the games than to postpone or move them.

Pound, AP reports, estimated there is a three-month window to decide the fate of the Tokyo Olympics.

“In and around that time, I’d say folks are going to have to ask: ‘Is this under sufficient control that we can be confident about going to Tokyo or not?’ ” he said.

As it stands, the added uncertainty — and perhaps an ultimate cancellation of the mega sporting event — only heightens challenges for brands that have likely invested millions in their Olympics showing.

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What We Reported Earlier: Feb. 25, 2020 4:30 p.m. ET

Despite the hurdles footwear brands have to overcome in order to take advantage of the global athletic stage known as the Summer Olympics, for many labels, the potential payoff makes the effort worth it.

For one thing, the size of the Olympics’ television viewing audience still presents a massive marketing opportunity for athletic footwear and apparel bands, according to Tom Cove, president and CEO of the Sports and Fitness Industry Association.

“More than anything, the main reason the Olympics are so important is that they are a global event,” Cove said. “[And] they still have significant viewership, including streaming. The Olympics offer this unique opportunity to focus people’s attention. It happens over two weeks in the summer, so it’s an ideal situation in terms of its allure.”

Still, in addition to strict rules outlining what brands can and cannot do to market or congratulate their sponsored athletes during the Olympics (or “Rule 40”), the 2020 Summer Games are in Tokyo, representing about a 12-hour time difference from most parts of the United States — a potential hindrance to viewership.

Meanwhile, the deadly Coronavirus outbreak, which has been spreading quickly beyond its epicenter in China to parts of Japan and South Korea, is thwarting international travel and hurting businesses across a range of industries globally.

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Citizens of Seoul, South Korea, in masks amid coronavirus outbreak.
CREDIT: Steve Cho/Shutterstock

And despite its persistent ability to reach millions of people, generally, viewership of the Olympics has been declining: The 2018 Winter Olympics in South Korea were reported to be the least-watched on record.

What’s more, brands whose athletes get significant screen time will have to work within stringent guidelines that govern what Games’ participants can wear in terms of technology and branding.

Nike nearly lost the ability to showcase its new Vaporfly technology during the Olympics, when World Athletics considered a ban on the company’s Next% percent technology. The Vaporfly technology ultimately sidestepped the ban, but a decision that came six months before the games could have shut out years of development from the global sports stage.

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Nike Air Zoom Alphafly Next% and Nike Air Zoom BB NXT sneakers.
CREDIT: Courtesy

Nike chief design officer John Hoke said the company’s focus is on resolving constraints and problems of their athletes and that his design team begins working towards the next Olympic games as soon as the closing ceremonies are over.

“I represent a team of literally hundreds of incredible designers, innovators, engineers. We know [that] every four years the Olympics offers a step-change moment for our athletes, the performances they give and our company,” he told FN this month. “We want to make sure we meet those athletic ambitions with our own [efforts]. We take that very seriously.”

Signs of Progress

The United States Olympic & Paralympic Committee (USOPC) released an amended Rule 40 and paralympic athlete marketing guidance in June of 2019, which gives competitors greater freedom when promoting personal sponsors during the games.

In part, the amendment to Rule 40 reads: “Competitors, team officials and other team personnel who participate in the Olympic games may 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.”

Although marketing during the Olympics remains arguably highly regulated, the updated Rule 40, among other things, now allows athletes to thank personal sponsors during the games and receive congratulatory messages from personal sponsors.

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A barge carrying the Olympic Rings floats in the water, in the Odaiba district of Tokyo.
CREDIT: Jae C Hong/Shutterstock

Meanwhile, athletes will be showing off some of the most innovative designs boldface athletic brands have to offer. And Cove says consumers tend to assume that if a shoe is being worn in the Olympics, then it must be good. That belief, he added, could translate into a consumers’ willingness to pay top dollar.

“Viewers will not only go out and buy the products they have seen in the Olympics, but they will understand the price difference,” Cove added.

For his part, Koichiro Kodama, CEO of Asics North America, says the company believes the Olympics bring unparalleled opportunities to tell a brand story.

“During the Olympic period, the eyes of the world are watching and looking for the next source of inspiration,” Kodama said. “The Olympics create an important moment in time where we have the opportunity to elevate our brand both globally through our partnerships and elite athletes.”

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Asics’ athlete Ryan Hall at the 2012 Olympic trials.
CREDIT: FN Archives

Even after the events come to a close, there are often lingering effects. For instance, data from the Sport and Fitness Industry Association shows that participation in certain sports goes up after an Olympic period.

“We watch participation the year [prior] to the Olympic year to get a baseline,” Cove said. “Then, during the Olympic year, participation in the sport goes up. It will go down the following year, but it doesn’t go back to the baseline. We still see a net increase, and that’s what we call the ‘Olympic bounce.’”

Any kid picking up, say, basketball, after watching the sport played at the games is probably going to want to look just like the athletes they just saw on TV. And insiders suggest that’s where big brands can really cash in.

“We look to scale across all price points and all regions, so more and more people are invited to participate in sports,” Nike’s Hoke said of the brand’s Olympics offerings. “We’re not just here to break records — we’re here to break boundaries. There are audiences and invitations we can look to bring more people into the sports world. We think sports are super important and we want to make sport a daily habit for every single person on this planet.”

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