Source: AFP
LVMH’s high-profile and highly visible product placement at the opening ceremony of the Paris Games surprised marketers and raises the possibility it could cause trouble for the International Olympic Committee with its long-time sponsors.
The world’s biggest luxury group has gained all it can from a partnership with the IOC, which cost LVMH 150 million euros ($163 million) when it was agreed in 2023.
What sets the Olympics apart from other events is that their stages are free of commercials.
The uniforms worn by the French team in Friday’s opening ceremony were designed by LVMH, although due to heavy rain they were largely covered by ponchos.
However, their branding was clearly displayed on their trunks and suitcases at one part of the ceremony.
Apart from that, in this Olympics LVMH made the trunk for the torches, the medal bearers will be dressed in team designed clothes and their medals and presentation trays are created by them.
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Source: AFP
The global report couldn’t have come at a better time for the group, after they announced earlier this week that half-year net profit was down 14%.
Michael Payne, the IOC’s former head of marketing, who was credited with revamping its brand and finances through sponsorships, says that while LVMH’s partnership with the IOC for the Paris Olympics was “brilliant”, he believes they received a “massive free advertising” at the opening ceremony.
Payne says he could upset the TOP 15 IOC partners — who unlike LVMH are tied for several big-spending Games. He helped establish the program and advises several of the TOP partners.
Over the past four years, they accounted for about 30 percent of the IOC’s $7.6 billion in revenue.
“I thought the ceremony was spectacular,” Payne told AFP on Saturday.
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“The direction of product placement with a stylish sponsor may not be wrong, but it needs extremely careful management.
“LVMH got a huge free global ad last night and other partners will be asking, how did it work?”
He said other ILO partners might well ask “why were we left out and given no opportunity to propose ideas or even reject them?”
“LVMH’s partnership potential is right — but at your peril don’t get caught being unfair to your long-term international partners,” Payne said.
Ricardo Fort, founder of Sport by Fort Consulting and former sponsorship executive for Visa and Coca-Cola, took an admiring look at the LVMH ceremony report.
“I can’t remember at an International Olympic Committee – IOC Opening Ceremony a brand moment like Louis Vuitton today in Paris. Their trunks were an integral part of the story,” he said on social media.
Paris Olympics chief organizer Tony Estanguet said he had no qualms with the LVMH division.
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“We are very proud to have LVMH as a partner and they have contributed to the success of Paris 2024,” he told a news conference on Saturday, adding that the group had “realised our ambition to organize this ceremony in the city”.
‘Clean space’
Terrence Burns, another former IOC marketing executive, says the Olympics would lose their unique appeal if advertising were allowed.
“Clean space is the most powerful example of the real differentiation of the Olympic Games,” he told AFP.
“Clean space offers an arena that is free from psychological or commercial intrusion.”
Which begs the question of what TOP partners get out of their partnership if their brands aren’t featured in the stadiums, but Payne says it’s simple.
“That’s why the Olympics are different than anywhere else. You’re not buying exposure,” Payne said.
“If you’re buying at the World Cup, maybe 50% of your fee goes towards advertising around the stadium.
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“What you’re buying is an association with the Olympic brand and what it stands for. It buys you national depth because then you become a partner of the 200-plus Olympic teams.”
Payne recalled how things were very different at the 1996 commencement ceremony in Atlanta, when he took extreme measures to prevent ambush advertising.
“I broke into a McDonald’s restaurant to shut off the electricity to take the big M sign,” he said.
“They had placed it front and center where each team had to enter.
“It took me until I thought Djibouti came in to break through. The clerk said, they will arrest us.
“I said, they’ll all be arrested if you don’t turn that light off!”
Payne says a balance needs to be struck when it comes to the Olympics and branding.
“You can’t turn the Olympics into a huge product placement exercise, you will completely destroy the brand,” he said.
Source: AFP
