On 6 July 2005, when London won the bid to host the 2012 Olympic Games, the news was greeted with widespread celebration. The nation was told the Games would be more than a sporting festival - it would provide a major boost to the economy of the capital and the entire country.
This Saturday (31 October), marks 1,000 days until the start of London 2012, and the mood is very different. The UK is now deep in a vicious recession, the budget for the Games has spiralled beyond the wildest predictions and UK taxpayers are wondering why they have to pay through the nose for the privilege of further clogging up the London transport system for a few weeks during the summer of 2012.
Media was one sector that was meant to benefit significantly from the Olympics. So, as we enter these final 1,000 days, the industry is joining fellow taxpayers and business leaders in questioning just what value the Games will bring, and examining what it can do to make the most of the opportunities that do exist.
Ask anyone involved in marketing and advertising around the Olympic Games and the first point they make is that it is not an easy task. The International Olympic Committee is highly sensitive to accusations of selling out and places stringent restrictions on the amount of advertising permitted to its sponsors.
Furthermore, the IOC jealously guards its intellectual property. The 2006 Olympic and Paralympic Games Act lays out the law relating to ambush marketing and trademark protection, and the IOC employs a large team of lawyers to enforce this protection. We can expect to see several prosecutions over the next 1,000 days.
As a result, media coverage will be dominated by official sponsors - for example, MEC Access will buy media around London 2012 on behalf of sponsor Lloyds. Managing partner Tove Akunniwa says: "Unless you're a sponsor, there's very little you can do around the Olympics: you can't refer to it or even infer a connection. So I don't think we would do anything with any of our clients other than Lloyds."
However, the prediction made by WPP chief executive Sir Martin Sorrell that 2012 will be a major driver of advertising revenue expansion will not necessarily be proved inaccurate. Simon Chadwick, director of the Centre for the International Business of Sport at Coventry University, believes the boom will be indirect.
He says: "The IOC's close scrutiny of the advertising market means expansion will occur around product categories such as sports clothing, sports drinks and sports betting. Events such as the Olympics induce a buzz factor, which means consumers are more predisposed towards spending than they might otherwise be."
Peter Charlton, national sales director at CBS Outdoor, believes the Olympics will be a major factor in pulling us out of recession. He says: "The entire outdoor media market is working together to produce a series of packages and sponsors will have first refusal on these from early 2011."
Most media people believe advertisers will hold off spending around the London Olympics until 2011, and certainly not before next summer's FIFA World Cup in South Africa. But some brands have already started to lay out their plans. JCDecaux has just taken a booking from Olympic sponsor GE for a Global Gateway - an enormous installation around the security gate at Heathrow's Terminal 5.
Jeremy Male, chief executive of JCDecaux UK, Northern Europe and Australia, says: "GE's installation at Heathrow is the foundation for its investment in Olympic advertising over the next few years. If you look back at Beijing, the outdoor ad market rose 17% in 2008, compared to a typical annual increase of 10%. We expect to see a similar 70% growth spike around London 2012."
But it is not just the outdoor sector that hopes to benefit from this spike. The London 2012 Games will coincide with the end of digital switchover and it is expected to provide a welcome boost to the struggling TV market. In its Digital Britain report, the Government predicted 2012 will be "the most digital Olympics in history".
There will also be many opportunities for mobile media. According to Nielsen Mobile, 31% of the UK's mobile video users and 17% of mobile web users turned to mobile phones for Olympic clips and updates during the 2008 Beijing Games.
Mike Wehrs, chief executive and president of the Mobile Marketing Association, says: "We are confident mobile advertising will be the medium that shines in 2012. The Games will drive traffic on mobile internet sites, mobile content sales, alert services, competitions and promotions."
The London Organising Committee of the Olympic Games (LOCOG) has been active in offering local sponsorship packages to companies and it has had a good level of success.
Clare Foot, managing director at sponsorship agency Experience Worldwide, says: "Big deals are still happening in the upper sponsorship tiers, so I believe LOCOG will hit its targets. If there is a shortfall, LOCOG will restructure its packages and possibly offer some great opportunities to smaller companies."
Andy Sutherden, head of the sports, marketing and sponsorship division at Hill & Knowlton, points out that these sponsorship deals also appear strong. He says: "One London 2012 sponsor, Nortel, has had to withdraw due to the company going into administration, but it was swiftly replaced by Cisco, albeit at a lower level. The other sponsors have stood firm and presumably they are paying their instalments on time."
He adds: "Some sponsors may have scaled back their advertising and PR activity from the levels originally intended, but we have already seen extensive activity from the likes of Lloyds TSB and EDF Energy.
"It would be a major embarrassment for a big company to cancel its Olympic sponsorship. General Motors in Canada is still a sponsor for the Winter Games in Vancouver, despite the difficulties the company has faced.
So far, LOCOG has raised about £550m, with delivery company UPS the latest to sign up. The body is on target to generate £650m or more, with most of the remaining opportunities at the tier-two or tier-three levels, worth £20m and £10m respectively."
Recession or no recession, there appears to be significant and sustained enthusiasm from the media industry for the London 2012 Games, and two simple facts remain.
Firstly, sponsors pay tens of millions of pounds for their rights and they will not squander those by failing to leverage them to best effect through the media.
Secondly, the Olympics Games is enormous. Whether or not LOCOG is as successful at staging the Games as it has been in raising sponsorship for them, London 2012 will be watched by billions of people around the world. As a global event uniting countries and sporting disciplines, the Olympics is still a hard act to beat.
Havas Sports & Entertainment
Keith Impey, chief executive of Havas Sports & Entertainment, is keen to emphasise that his client EDF Energy has supported London 2012 from the start.
He says: "EDF appointed us back in 2004, when it was one of the first corporate supporters of London's bid. When London won the Olympic Games, EDF was immediately keen to be a tier-one sponsor."
He explains: "These will be the first carbon- neutral Games. As it becomes increasingly difficult for utility providers to differentiate themselves on price, they are working harder to associate their brands with issues such as sustainability. And so the idea of becoming the sustainability partner of London 2012 was very appealing."
EDF began to activate its sponsorship in 2007, through the use of established and emerging athletes at its internal seminars. Impey admits that advertising spend around its Olympic sponsorship has stalled during the recession, but predicts it will pick up again from 2010.
He says: "Olympic sponsorship is all about knowing what you can and cannot do. Local sponsors such as EDF have to be very careful not to infringe the rights of the IOC's top sponsors, who have sponsored the Games for decades. Our role is to help them do this."
The team will also offer that expertise to other clients keen to take advantage of the many opportunities offered by the Olympics. Impey says: "In the immediate aftermath of Beijing, consultancy firm Watson Wyatt asked us to identify hopeful athletes in different regions across the world, and then its employees voted for the ones they would adopt and follow. About 40% of the company's staff took part."
He concludes: "Official sponsors will hit the advertising market with a wall of money in the run-up to the Games. Other companies need to consider how they can respond, and they will need advice to come up with solutions that are creative, effective and legal."
David Peters, director of Carat Sponsorship, admits his clients have not yet done much major activity around London 2012. He says: "Many have looked at sponsoring 2012 and LOCOG has been very active in approaching companies, but in most cases the clients have decided not to take up the offer."
He adds: "The problem with the Olympics is activation. When you pay millions for sponsorship rights you get the right to use the Olympic logo, a few tickets and some hospitality opportunities. You need to spend a lot of money to activate those rights, and for most of our clients there simply isn't enough return on investment."
In fact, Adidas is the only Carat client that has signed as an Olympic sponsor. Peters believes the sponsorship makes sense for Adidas because it is a sportswear brand, but is unable to elaborate further on its strategy. He says: "Unfortunately, Adidas has very strict rules prohibiting any supplier from talking about its campaigns."
However, Peters is excited by the work he is doing with British Gas. The company was happy to pass on paying for sponsorship, letting rival EDF Energy take up that option. Instead, it has signed a six-year deal with the British swimming team.
Peters says: "We are very limited by the IOC's draconian rules on what we can do. But we will be involved with London 2012 through this association with a team that is expected to pick up medals."
He is convinced that, by 2012, the British public will be enthusiastic supporters of the event. "At the moment, all you hear are negative stories about overspending and delays," he says.
"But by 2012, everyone will be involved and they will suddenly be excited by synchronised swimming. That's the power of the Olympics - it draws in passive fans. The Games will be a once-in-a-lifetime experience for British people."
Head of business development
Kinetic buys about 40% of outdoor media in the UK, and it will buy media on behalf of Olympic sponsors such as BP, Visa, Lloyds and British Airways.
Chris O'Donnell, head of business development, also expects to pick up buying work from tier-two and tier-three sponsors as they come on board, as well as from non-sponsors keen to take some of the action.
"Some call it guerrilla marketing," he says. "Others describe it as associating with the general buzz. However you look at it, there will undoubtedly be plenty of brands that want to make their presence felt around London 2012. But LOCOG has been very active in buttoning down sponsors' rights and it will be difficult for companies to get around the primary legislation that is in place."
However, he adds: "No legislation is all-encompassing, and these laws were passed in 2004, so media has changed a great deal since then. For example, 80% of mobiles will be wi-fi enabled by 2012. People will be able to download what is in effect a mobile poster and the legislation doesn't prohibit that. Mobile will be huge in 2012."
Kinetic is already planning Olympic campaigns with a handful of clients. O'Donnell says: "If you want to get the best sites and run the most memorable campaigns, you need to start planning now."
While he expects the overall impact of London 2012 will be "very positive" for his market, O'Donnell warns it will create significant price volatility. He points out that while outdoor advertising rose in China as a whole during the 2008 Games, it fell in Beijing itself. "Advertisers were worried there was too much noise, so they stayed away," he explains. "We expect there will be an early spike of buying and then many advertisers will leave it late to see how much noise there is and how prices pan out."
He notes the watchword for the London Games is legacy. "In discussions we've had with clients, it is clear they are taking this message seriously. Expect to see outdoor campaigns that do more than burn brightly for a few weeks in summer 2012. They will leave a lasting physical impression."
Head of sports marketing
Omnicom Media Group
David Pinnington, head of sports marketing at Omnicom Media Group, believes the competition between advertisers outside the Olympic arenas will rival the events inside.
He says: "Many of our clients are long-standing global partners of the IOC and others are LOCOG partners. However, a significant number have no official relationship with the Games, but are keen to make the most of the occasion. Although the Games do not start for almost three years, we are already a long way down the line and most clients have big ambitions."
Pinnington and his team have not finalised any specific buying decisions, but they are developing strategic frameworks with various brands. He is unable to reveal details of what those plans might be, simply saying that all his clients are keen to ensure innovative use of media through creative and well-targeted campaigns.
He says: "Media innovation must be both proactive and reactive. Beijing was the first Olympic event to benefit from live internet broadcast coverage, while improved digital distribution enabled the audience to get closer to the action. However, the immediacy of the platform increases consumer expectation and demands more engaging tactics. It is no surprise that the brands that enhance consumers' enjoyment of the occasion are often those that generate greater share of mind."
While online advertising opportunities will abound in 2012, Pinnington notes that advertisers will have to deal with the significant challenge posed by the lack of advertising opportunities around live broadcast content on the BBC.
He believes this will stimulate significant competition across other channels.
2012 in numbers
LOCOG's sponsorship target
Sponsorship secured by LOCOG by the end of September 2009
Number of official Olympic sponsors, partners and suppliers
Number of London 2012 athletes
Number of London 2012 venues
Number of tickets expected to go on sale