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Skipping the Olympics Is ‘Not an Option’ for Many Advertisers

It has long been considered an almost ideal forum for businesses seeking to promote themselves, with plenty of opportunities for brands to place advertisements among the pageantry and inspirational stories of athletes overcoming adversity — all for less than the cost of a 30-second Super Bowl commercial — to promote themselves.

The Olympics are underway in Tokyo, and as the coronavirus pandemic continues to wreak havoc on the city, Olympic advertisers are becoming increasingly concerned about the more than $1 billion they have spent to run advertisements on NBC and its Peacock streaming platform.

Calls to cancel the more than $15.4 billion extravaganza have intensified as more athletes test positive for Covid-19. The event is also deeply unpopular with Japanese citizens and many public health experts, who fear a superspreader event. And there will be no spectators in the stands.

According to Jules Boykoff, a former Olympic soccer player who is now an expert in sports politics at Pacific University, “the Olympics are already a soiled rag.” The way deals are cut and the willingness of multinational corporations to participate in the Japanese economy could change dramatically if the situation in the country deteriorates rapidly, says the author.

It has been confirmed that Panasonic will not send its chief executive to the opening ceremony, which takes place on Friday. Panasonic is a major sponsor of the event. Toyota, one of Japan’s most powerful corporations, will not be participating in the Games, as the company announced on Monday that it would no longer be airing Olympics-themed television commercials in the country.

The majority of marketing plans are moving forward in the United States.

The Olympics are a significant source of revenue for NBCUniversal, which has spent billions of dollars to secure exclusive rights to broadcast the games in the United States through 2032. More than 140 sponsors have signed on to support NBC’s coverage of the 2016 Summer Games in Rio de Janeiro on television, on its year-old streaming platform Peacock, and online. This represents an increase from the 100 sponsors who signed on for the 2016 Summer Games in Rio de Janeiro.

“Not being there with an audience of this size and scale for some of our blue-chip advertisers is not an option,” said Jeremy Carey, the managing director of the sports marketing agency Optimum Sports.

In a Michelob Ultra commercial, the sprinting star Usain Bolt points joggers toward a bar. Procter & Gamble’s campaign highlights good deeds by athletes and their parents. Sue Bird, a basketball star, promotes the fitness equipment maker Tonal in a spot debuting Friday.

Chris Brandt, the chief marketing officer of Chipotle, said that the situation was “not ideal,” but that the company still planned to run a campaign featuring profiles of Olympic athletes.

According to Mr. Brandt, “we believe people will continue to tune in, even if there are no fans, just as they did for all kinds of other sports.” “It will be a detracting factor in terms of excitement, but we also hope that the Olympics will serve as a unifier at a time when the country appears to be increasingly divided on a daily basis.”

For the 2016 Games in Rio de Janeiro, NBCUniversal reported that its ad revenue exceeded $1.2 billion, and that it had sold all of its advertising slots for Friday’s opening ceremony, while also stating that it was still offering advertising space for the rest of the Games. Buyers estimate that a 30-second prime-time commercial will cost more than $1 million to produce and air.

According to Kantar, while television continues to attract the majority of advertising dollars, the amount spent on digital and streaming advertisements is increasing. Several forecasts predict that TV ratings for the Olympics will lag the Games in Rio and London, while the streaming audience will grow sharply.

As part of this year’s so-called upfront negotiation sessions, in which ad buyers reserve spots with media companies, NBCUniversal announced that Peacock had received commitments totaling $500 million for the upcoming year from advertisers.

According to Mr. Carey, the Optimum Sports executive, “you won’t find a single legacy media company out there that isn’t pushing their streaming capabilities for their biggest events.” “That is the direction in which this company is going in the future.”

A campaign by United Airlines, a sponsor of Team United States of America, that promoted flights from the United States to Tokyo has been scrapped altogether. Its latest campaign, which features gymnast Simon Biles and surfer Kolohe Andino, aims to encourage a broader return to air travel in general.

Managing director of advertising and social media for the airline, Maggie Schmerin, explained that the campaign did not make sense because it focused on a specific destination that many Americans might not be able to travel to.

United’s campaign will be seen in airports, on social media, and on streaming platforms such as Peacock, but it will not be broadcast on television. In her words, the airline wished to be “matching customers where they are, based on their viewing habits,” according to Ms. Schmerin.

Ad agency executives stated that companies were checking in on a regular basis for updates on the Covid outbreak in Japan and that their marketing messages might need to be tweaked as a result.

The founder of the Droga5 advertising agency, which worked on an Olympics campaign for Facebook that featured skateboarders, said, “Everyone is being a little bit cautious.” “People are in a vulnerable state at the moment. Achieving the right tone is important to advertisers because they don’t want to be too saccharine or too clever.”

Many of the companies that will be advertising during the Games are running campaigns that they had to completely re-design after the Olympics were postponed last year due to the weather.

“It was planned twice,” Mr. Carey of Optimum Sports said of the event. “Consider how much the world has changed in that one year, and consider how much each of our brands has changed their perception of what they want to be out there saying, doing, or sponsoring. As a result, we crumpled it up and started from scratch.”

Sponsor Visa will not hold promotional gatherings or client meetings in Tokyo, and the company will not send any senior executives, according to Lynne Biggar, vice president of global marketing communications for Visa. It begins with a soccer game before showing Visa being used in transactions all over the world in the company’s commercial, which will be broadcast during the opening ceremony broadcast.

As part of its sports calendar, NBCUniversal will broadcast the Super Bowl in February, for which the company claims that 85 percent of ad slots have already been sold or are in negotiations. Another major event on the horizon is the FIFA World Cup in Qatar in late 2022, followed by the Beijing Winter Olympics in February. Because of China’s and Qatar’s poor human rights records, both of these events have placed the advertising industry in a difficult situation.

First and foremost, however, advertising executives simply want the Tokyo Games to go off without a hitch.

According to Kevin Collins, an executive at the advertising-buying and media intelligence firm Magna, “we’ve been dealing with these Covid updates almost every day since last March.” “I’m looking forward to them getting started.”

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