Ambush marketing at the Rio Olympics – which case won?
What is ambush marketing?
Ambush marketing is the practice by which a company attempts to associate its products or services with an event without paying to become an official sponsor of that event. Businesses sometimes do this as a way to get more customers while at the same time saving money on the cost of sponsorship.
This happened recently when telco giant Telstra decided to associate itself with the Rio Olympic Games, presumably for the obvious marketing benefits of being linked to a universally popular and widely televised sporting event. Another factor in Telstra’s decision to take this course of action could have been that its arch-rival, Optus, was an official sponsor of the Olympic Games.
Telstra not an official sponsor of the Rio Olympic Games
Instead of paying the substantial fee necessary to sponsor the Olympic Games as an official partner, Telstra took the more circuitous path of becoming the “technology sponsor” of the Channel 7 television coverage of the event and the related smartphone application. Both of these were very clearly connected to the Olympics.
Australian Olympic Committee takes Telstra to court
Telstra ran television commercials featuring Peter Allen’s famous song “I go to Rio” and highlighting Telstra’s role as Channel 7’s technology sponsor. The Australian Olympic Committee (AOC) wanted to protect the official sponsors of the Olympic Games and was concerned that busy people often recall an ambush marketer even more than an official sponsor, potentially handing the ambusher the advantages of being an official sponsor without having to pay the substantial fees required.
The AOC took legal action against Telstra in the Federal Court, claiming that Telstra had engaged in misleading and deceptive conduct and that its advertisements would indicate the existence of Olympic sponsorship to a reasonable person.