The Hindu Business Line : Should we legislate on ambush marketing?

It is by pure chance that an Indian cricket lover may have ever missed the slogan ‘Nothing Official About It’ that later became part of advertising folklore. As it happened, Pepsi cheekily overshadowed Coca- Cola (awarded the status of the ‘official sponsor’ of 1996 World Cup) by virtue of its inimitable catch phrase.

But that’s what we common folks think. In the world of marketing, however, such attempts, especially during events involving megabucks, are labelled nothing short of an ambush. Small wonder then that these sorts of initiatives taken by non-sponsors in the advertising round, through intelligent use of star athletes in an event sponsored by their competitors, raise many key and, we dare say, uncomfortable questions. After all, the sponsors are the lifeblood of any event.

Can a non-sponsor purchase and use advertising space around tournament venues without any official association with the event? Without any legislation to avoid such sticky issues, we might be well headed for bigger showdowns as India readies itself to play host to ICC Cricket World Cup in 2011 and before that, Commonwealth Games in 2010, says Nandan Kamath, Director of sports consulting company GoSports.

While television rights for the subcontinent were bagged for under $15 million in 1996, the same rights for the World Cups for 2011 and 2015 have been sold at a whopping sum of $1.1 billion. The stakes today are far higher, both for organisers and sponsors and both of them are going to fight tooth and nail to get their pound of flesh.

“That said.. there really isn’t a black-and-white moral or ethical argument against ambush marketing. The case for legislation must be made on rational economic grounds in the public interest and in the specific Indian context. The case for legislation seems a strong one, especially from the perspective that the Indian sports ecosystem needs a catalyst that large-format events can provide,” Kamath said in an e-mail interview with Brand Line.

Excerpts from the interview.

What is the imminent danger from ambush marketing?

As India prepares to host multiple major international sporting events in the next few years, the controversial practice of “ambush” marketing will come under the scanner. The Commonwealth Games in 2010 and the ICC Cricket World Cup in 2011 will both be multi-thousand-crore rupee events and there will be calls for official event sponsors to receive special legal protection.

But can this practice be purely coincidental or unintentional?

Ambush marketing, in the sports events context, is the ‘intentional’ effort by a company or brand to weaken or ambush its competitor’s official sponsorship of the event through a ‘planned’ campaign to suggest (but not explicitly state) a commercial association with the event.

So these non-sponsors cannot associate with event?

I will explain. Typical instances are a cola-manufacturer’s ‘Nothing Official About It’ campaign around the 1996 Cricket World Cup. Imagine an event sponsored by its biggest competitor and the company in question engages star athletes in advertising around (or during) the event, purchases and uses advertising space around tournament venues ‘without’ an official association with the event. In some instances, consumer promotions are also conducted in which tickets or other memorabilia relating to an event are given away as prizes so as to ‘suggest’ an association.

The same cola makers that we were referring to above frequently carry on the game of oneupmanship in the form of ads, as you must have noticed in the television even recently. What happens if one competitor carries out spoofs on the others ads?

A parody or spoof certainly attempts to do a similar thing to ambush marketing – to ride-off and associate with a concept. However, the economics and what’s at stake are slightly different as there is no attempt to associate implicitly with a third-party event that the target of the parody has paid big bucks for. And, in most legal systems it would be very difficult to argue that a parody is illegal or a copyright infringement as most often it is protected free speech and a form of permissible cultural criticism.

Does the ‘safe situation’ change, if the same spoof is carried out during a mega event where one is a sponsor and the other is not?

The stakes are different when an event is ambushed, given the high fees paid for exclusivity and the “officialdom” of the association. A parody done smartly around an event need not necessarily attract ambush-marketing concerns – the determining point will be whether any business/official association with the event is implied indirectly. Under the prevailing legislation a campaign such as “Nothing Official About It” even today would not be illegal around a World Cup per se so long as logos, participant players and such were not used. They would probably not be able to sign up the cricketers and get airtime for the ad on the channel showing the broadcast as those entities would be contractually bound not to participate in such campaign around the event.

Are you saying they can get away by calling themselves innovators in their advertisements? Isn’t what they are trying to do immoral, or even illegal?

About the parody or spoof I have already made my point clear. But if you talk specifically about ambush marketing, then I would say that it is not clear whether it is to be deemed either immoral or unethical and, under current Indian law, it is currently not illegal per se. From one perspective, ambush marketers are thieves and “free riders” that usurp value created by others for personal commercial gain.

At the same time, many argue that ambush marketing, like you said, has a creative and innovative element to it and should therefore be promoted, rather than prohibited. Our society progresses through freedom of creativity and innovation – limiting such freedom will have negative social consequences, the argument goes.

Right. On the other side of the issue, are there any safeguards that sponsors currently have?

To be sure, existing law in India does not provide the “ambushed” entity or the event organiser a ready remedy. Given that ambush marketing relies on suggested associations rather than real ones, neither trademark law nor the tort of “passing off” can be used effectively by an alleged “victim” of an ambush marketing campaign.

Any instances?

In the 2003 case of ICC vs Arvee Enterprises and Philips, the Delhi High Court, while recognising the alleged act as ambush marketing categorically stated that such acts were not in fact prohibited under current Indian law.

The absence of law on the subject further fuels the morality argument – after all, the law only represents society’s prevailing morality and whatever is not prohibited is effectively permitted, morally legitimate and ethically permissible.

It appears from your replies that there is a legal status quo. Why not keep it that way, as in, let sleeping dogs lie? What’s the pressing need to legislate?

Over the years, the nature and role of sports sponsorship has changed dramatically – from altruistic patronage to calculated spend – the expectation of concrete and measurable “return on investment” having become the paramount concern.

Transformed expectations and the huge demand for sponsorships of high-profile events means a drive to premium prices and requests for domain exclusivity. The return on investment is calculated by adding the value from associating with the event to the value from excluding a competitor from doing so. With this in mind, event organisers sign contracts of exclusive sponsorship with sponsors from specific domains and commit contractually that they will do all they can to protect their rights.

And what is the nature of these contracts and subsequent rights?

In the legal armoury of the event organiser are contracts with the host city, the athletes, the in-stadium spectators and the broadcasters. These contracts limit each of their rights to interact or associate commercially with competitors of official sponsors in-stadia and in some cases, for a period of time surrounding the event.

As regards the world at large (which includes potential ambush marketers), they have no rights other than trademark, passing off, false advertising and unfair competition laws. As a result, the contractual restraints described above in conjunction with existing law are (for various technical reasons) of very limited use in curbing ambush marketing by opportunistic actors.

To fill similar legal voids, a number of host countries of major sporting events such as Australia (Olympics, 2000), South Africa (Cricket World Cup, 2003), the West Indies (Cricket World Cup, 2007), China (Olympics, 2008), Canada (Winter Olympics, 2010) and the UK (Olympics, 2012) either have passed event-specific legislation or amended existing laws to contemplate protection of the official sponsors of their local major sporting events.

Okay. Let us put this one straight. What’s in it for the public?

Yes, arguing in favour of an anti-ambush marketing law, it isn’t enough to say that India must legislate just because other countries have. There really isn’t a black-and-white moral or ethical argument against ambush marketing. So, the case for legislation must be made on rational economic grounds in the public interest and in the specific Indian context. That said the case for legislation seems a strong one, especially from the perspective that the Indian sports ecosystem needs a catalyst that large-format events can provide.

What is the harm if legislations are postponed?

When well-organised, international sports events have the capacity to invigorate economies and sports systems they focus the public eye on sport, increase global visibility, promote tourism and provide platforms to spur on local athletes.

Major events need sponsors because they can’t be held solely with public tax monies. Sponsors do seek their pound of flesh in exchange for their contribution and are unlikely to make the sponsorship commitment unless they trust the organiser.

If the organisers’ quiver doesn’t have enough arrows to quell ambush marketing, the argument goes that sponsors will be scared away – even if they do bite once they won’t be fooled a second time. Prospective sponsors must be able to trust the organiser and the environment in which the event is held.

For this reason of “safe haven” signalling alone, special legislation focusing on specific events of national importance can be justified – just as were the significant amendments to the Indian intellectual property laws in the 1990s, enacted with a view to attracting foreign investment.

But wouldn’t legislating on ambush marketing mean a list of dos and don’ts?

The most significant risks of special interest legislation are unintended consequences and over-reaching effects. For the wholesome enjoyment of the event, an equilibrium must be found that both protects sponsors and provides other participants necessary freedoms to interact with the event.

By its essence, the law would need to be limited by time (around the event in question), would need to “grandfather” legitimate uses that preceded the legislation, must distinguish, as you rightly said, between impermissible suggestions of business associations on the one hand and legitimate non-commercial, journalistic and other public interest uses on the other.

The eventual success of the law will be in the success of the events protected and the fostering of an environment that promotes many more similar events finding a home in India. Importantly, if one is to reconcile the public interest with limits on freedom and curbs on creativity and innovation engendered by an anti-ambush marketing law, the protected event should not lose the spirit of the staging in trying to enforce laws with hyper-technical precision.

With that in mind, a well-balanced law and its thoughtful implementation will be crucial.

More Stories on : Marketing | Interview | Sports | Courts/Legal Issues

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Flight entertainment

‘Media has to be ready for storm of digital migration’

Should we legislate on ambush marketing?