When the Olympic torch landed in Macao for the second leg of its journey through China, the waiting crowds were a sea of red. Were these spectators patriotic Chinese welcoming the torch home after a controversy-soaked journey around the world?
Most likely so, but that was not the full story. A closer look at the crowd showed that the design on many of the flags being waved was not the five yellow stars of the Chinese national flag, but the famous Coca-Cola script. And the red shirts everyone in the crowd was wearing? Coca-Cola again.
It is not surprising that Coke - which along with Samsung and Lenovo is one of the official Olympic torch relay sponsors - was pulling out all the stops for the Chinese section of the five-month journey.
From Tibetan activists to Sudanese pressure groups, the beverage company had just spent several months under unwanted scrutiny for its high-profile links to the Beijing Olympics and, by association, the Chinese government.
But with the torch finally on home turf, Coca-Cola was ready to go on the offensive. After all, it and the other official sponsors had not invested such huge sums - estimated to be as high as $100m (£50m) in some cases - to reach out to consumers in London or Paris. The Olympics may well be a global celebration, but for the big sponsors, the Games were always going to be about China.
"It is the opportunity of China," says Dan Mintz, founder and chief creative officer of Shanghai-based DMG Media, when asked what the sponsors hoped to get out of Beijing 2008. "Look at Athens. Nobody was excited. Everyone was waiting for Beijing, because this is the big one. The US may be the biggest market in the world, but China is the hottest."
Michael Wood, chief executive, Greater China at Leo Burnett, agrees: "Never has the Olympics been staged in a country that offers such large domestic commercial scale. A disproportionate amount of global ad spend has gone into China."
This is certainly reflected in the amount of money that has gone into the market over the past 18 months. In 2007, ZenithOptimedia estimated that the Olympic Games would attract nearly $1bn (£500m) in additional ad expenditure in China this year, or 20% of total ad spend in the country.
More recent research from Nielsen showed that ad spend in China in the first quarter of this year was up 20% across the board. This figure is expected to rise significantly during the second and third quarters, as advertisers intensify their marketing efforts.
However, for the official Olympic brands, the spending spree began well in advance. Johnson & Johnson increased its mainland China ad spend by 43% in 2007 compared with the previous year, according to Nielsen, while Visa upped spend by 26% year on year and McDonald's by 24%. Firmly in the lead though was Coca-Cola, which in 2007 increased annual ad spend in China specifically on the Coca-Cola brand by 69%.
But ad spend alone tells only part of the story. Much more important is how brands have been able to establish strong and, they hope, lasting relationships with Chinese consumers.
The key strategy has been for brands to absorb themselves into the local market. In the build-up to the Olympics, most international advertisers have forgone trading on their value as a Western product and have instead projected themselves as a Chinese brand as much as possible.
"It is all about localisation," says Ray Ally, executive director for brand consultancy and design firm Landor Associates. "The foreign multinational corporations realise they need to be more of a partner to China, almost like a local company. They need to be seen as Chinese. We see this in a lot of branding, especially from sports brands. The 'Go China' theme is clearly trying to appeal to this trend."
Going local has had a noticeable effect on consumer brand recognition. Marketing consultancy R3 Asia-Pacific and research partner CSM Media found that 50% of Chinese consumers surveyed were able to spontaneously name Coke as an Olympic sponsor, while more than 86% recognised the brand when prompted. By contrast, a survey, run in the UK recently by MPG's Fabric research, showed that only 9% of respondents could name a single Olympics sponsor.
These unprecedented levels of awareness are no doubt fuelled by China's almost universal enthusiasm for anything Olympic-related and a groundswell of nationalism that was evident even before events in Tibet and the earthquake in Sichuan.
Beijing 2008 has been the perfect opportunity for brands to leverage their value alongside that of the Olympics and, at the same time, tap into China's patriotic mood and earn brownie points with consumers.
However, for DMG's Dan Mintz, the Games have been something of a double-edged sword. "It is an incredible event - the biggest Olympic Games of all time," he says. "But at the same time, everything else is put on hold, so it is not a healthy marketing environment. The Olympics takes precedence over everything."
He adds: "What it is doing though is pushing people to do things that they may not have done were it not for the Olympics. There is a certain level of expectation - a once-in-a-lifetime opportunity."
Nowhere has this been more apparent than in the digital space. "Digital in China has opened the eyes of traditional brands - they can now see what can be achieved," says Amanda King, president and managing partner for Asia-Pacific at Tribal DDB. "The Olympics has allowed brands to do things they wouldn't normally do - it has broken the ice and shown the way to follow."
Olympic advertising on offline media in China has on the whole been rather safe. The vast majority of brands are playing on the same general themes and in many cases are using the same celebrity endorsers: the holy trinity of hurdler Liu Xiang, basketball giant Yao Ming and actor Jackie Chan. By contrast, digital media activity has been much more innovative.
"In Sydney 2000, television commercials (TVCs) were creative and witty and that suited the Australian market," says King. "TVCs in China have been very brand-focused and have adopted a more traditional approach. So we have seen the big Coke ad or the big adidas ad, but no quirky grassroots stuff. This has led to an opportunity for digital."
Digital has been particularly effective in functioning as a space where the Chinese public can interact and express their passion for the Olympics. China's growing enthusiasm for social media as a key communication tool, coupled with the general Olympic fever in the country, has been good news for those marketers who have been able to use digital in the right way.
Most online campaigns have run around the theme of support, notably the various "Cheer for China" campaigns (McDonald's, Coke and non-official sponsors Pepsi) or "Honk for China" in the case of Volkswagen. "The support for the Olympics in China is very big - the country has rallied behind the Games - and digital allows people to actively participate," says Chris Reitermann, president of OgilvyOne China.
Reitermann points to the work of Ogilvy client adidas, whose entire Olympic campaign is built around supporting Chinese athletes. "This theme looks great on print, TVCs and out-of-home. But to really get this message across, digital is the most appropriate medium. Digital is the space where what brands say in offline media is given the opportunity to come to life."
According to Katja Schreiber, spokesman for adidas China, the sports retailer's Olympic website attracted more than 1.2 million visitors in just over two months, with the average time spent on the site exceeding 10 minutes. "This is a clear indication of how closely our consumers get involved with the adidas brand," she says.
The Olympic effect has also transformed how clients view digital. In the past, marketers in China would tend to use 4A (American Association of Advertising Agencies) agencies for their offline work, but choose a local shop for online. However, after seeing what digital media has achieved around the Olympics, they are increasingly starting to go to the 4As for digital as well.
"More money is going into the production and planning of digital campaigns," says Reitermann. "Even local brands, who traditionally run very conservative campaigns, are now putting greater effort into their message and are investing much more in production."
But while Beijing is obviously the most digitally wired Olympics yet, what is happening in China is just the warm-up. "The first truly digital Olympics will be London 2012," says Mike Jackson, managing director of MEC Access, the strategic partnership and sponsorship division of Mediaedgecia. "This is when the digital space will truly come of age, and sponsors will need to embrace the opportunities, learning from the results from Beijing."
How this will be expressed is anybody's guess. In digital terms, four years is a long time. One thing that is agreed is that digital will be much closer to becoming a fully profitable medium than it has been in Beijing - both for brands and for the organisers. "At the moment, there is no real commercial angle," says Leo Burnett's Wood. "There is entertainment and interaction, but no money."
Beyond digital, it is hard to see what lessons marketers can draw from their experiences in Beijing. "The domestic commercial scale is completely different," says Wood. "London is a highly developed ad market, where brands are completely entrenched."
Woods believes that building domestic Olympic campaigns at a scale witnessed in China is not a lesson that can be applied easily to London "to establish deeper inroads into the UK market". Instead, as they have done in China, brands will need to think more about engaging consumers around the prevalent national mood.
"Where 2008 is a celebration of China, London 2012 will be a celebration of diversity," says Ally. "The identity for 2012 will be a more multi-cultural than it has been in China. Brands will need to project a more diverse look and feel rather than, say, an image of Britishness."
Those brands that can tap into that mood at an early stage will be the most likely to succeed. Mediaedge:cia's Jackson says: "If sponsors don't start their activity at least three years ahead of the London Games, they will simply get left behind."
BEIJING 2008 OLYMPIC PARTNERS
Johnson & Johnson
LONDON 2012 OLYMPIC PARTNERS