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But the question is, is it worth the money? Bear in mind these companies are spending three to five times the amount ordinarily required for such sponsorships - this is the Olympics, no less - and most of them have no experience in international sporting event sponsorship whatsoever.

According to Chen Jian, secretary-general of the Beijing Olympics Economy Research Association, it all depends on whether these companies can formulate comprehensive sponsorship plans, which will require a suitable combination of brand marketing, sales promotion, consumer involvement, Olympics-related research and development and maximum utilization of the Olympics platform to implement the plans.

Experts point out that adopting a long-term perspective and building a consistent brand image are also crucial.

Huge investments

Many analysts attribute Chinese enterprises' enthusiasm for Olympics sponsorship to a notion that jumping on the bandwagon will automatically catapult their brands onto the international market.

"Some have even assumed that sponsorship is a really simple affair - just add the Olympic logo to the brands and unleash a torrent of ads," says Chen. "But it isn't that simple. Experienced multinational companies formulate detailed Olympics marketing schemes and even carry out pilot projects as a warm-up before actually bidding for an Olympics sponsorship."

Yadu, a Beijing Olympics supplier, is finding out just how difficult the whole process is. With only 1 billion yuan in sales last year, the company splurged 41 million yuan for an Olympics ticket and plans to spend 10 million yuan this year on its promotion campaign.

The humidifier producer has 99.9 percent of the local market, according to State Information Center's 2006 survey. But Yadu's founder and chairman He Lumin admits the company is still at a loss on how to use the Olympics platform effectively.

Yadu began its association with the Beijing Organizing Committee for the Olympic Games (BOCOG) in 2004, when it sponsored air cleaning and humidifying facilities worth over 1 million yuan for BOCOG offices.

"We were a little hesitant to bid for sponsorship as our annual turnover at that time was 500 million yuan. Both shareholders and associated banks were seriously against the proposal," says He. But chasing his business instinct, He decided to give it a go.

"We'll undoubtedly get some return in terms of branding and sales from Olympics sponsorship, but I'm not sure how much we'll gain or how to go about it," says the entrepreneur.

Yadu has no experience in sports marketing, while more experienced international counterparts "won't provide us with any training", He complains.

The company commissioned a specific Olympics marketing team three years ago. He is not fully satisfied with the plan chalked out by this team and is looking for a more effective and practical solution, say sources in Yadu.

There's a reason why He is not happy with the way things are going. Yadu has poured money into its ad campaigns but the feedback hardly inspires hope. He acknowledges the results of the company's ad blitz did not meet his expectations.

A big budget has been fixed for Olympic Games and post-Olympics marketing. "But we're not sure how and where to spend it," says He.

"That's the dilemma of many Chinese sponsors and suppliers of the Olympics," Chen says, adding that the problem is not restricted to Chinese sponsors only. According to a survey by the International Olympic Committee, only around a third of Olympics sponsors successfully leveraged the event to achieve branding and other goals, while the majority failed to do so.

Smart learners

But Christopher Renner, president of sporting consultancy Helios Partners China and advisor to Lenovo's Olympics marketing, cites Chinese sponsors who have proved to be smart and quick learners.

Chen agrees , saying some of these companies have formulated comprehensive schemes and taken action to prepare for 2008, citing the examples of Lenovo, Bank of China (BOC), Air China and China Mobile.

These companies kicked off their Olympics marketing two to three years ahead: Lenovo took part in the Olympics torch design and relay; Air China has promoted the 2008 Olympics airplane model; and Bank of China has taken part in a ticket launch and commemorative coin issue.

Some have also sponsored other sporting events to hone their skills and gather experience. BOC was the sole title sponsor of the FIG 2006 World Cup Gymnastics Competition last July. China World Cup Gymnastics Competition, one of the six FIG (Federation of International Gymnastics) World Cup competitions, is a premier sporting event of FIG. It is also one of the highest-level sporting events to hit China before the 2008 Olympics.

China is a major player in international gymnastics circles. The elegant and skillful moves of Chinese athletes are identical to the image BOC hopes to convey to its target clients, says Wang Zhaowen, the bank's spokesman.

To provide better services for the gymnastics competition, BOC launched three programs: event promotion, financial services for the event and customer marketing. The bank says it wanted to acquire a deeper understanding of international events through this sponsorship and thus gain the capability to offer feasible financial services for big events.

BOC has thus successfully offered financial services to Chinese sports delegations in two international sports events, the other being the Torino Winter Olympic Games held in February last year.

In addition, from February to June last year, the Beijing Olympics' sole bank partner launched a series of financial products, including a deposit book with pictures of the Friendlies.

"I think a smart way to do it is to seek a continuous campaign," says Martin Scorrell, founder of WPP, one of the world's leading communications services groups that has many Olympic sponsors as clients.

WPP-affiliated Hill and Knowlton has been named the communications consultant for the 2008 Games, providing support for major events, communications outreach to the international media and assistance in communicating Beijing's Olympic vision.

"Chinese companies should look at it as a continuous process and not as one shot, such as the Winter Games in 2010 and the London Games in 2014. The most important thing is to be consistent," Scorrell stresses.

The gains won't be visible right after a company signs up as an Olympic partner. It must first focus on promoting its brands in different ways, according to Yuan Gangming, an economist with the Chinese Academy of Social Sciences.

"UPS may have spent $100 million on the sponsorship bid and may not recover all that money from the Beijing Olympics itself," he says. "But the potential benefits from cultivating the market and developing the company's image are incalculable."

So at the end of the day, whether the pricey tickets are worthy it or not will depend entirely on the companies' own performance at the Games.

- By LIU JIE(China Daily)

China Daily