its 14 years as a corporate sponsor, seems to be getting its competitive strategy down to a science.
Though Visa has exclusive "payment card" rights to the Olympics, it has been vulnerable to "ambush" or "parasite" marketing by rivals MasterCard International and American Express Co.
There is only so much that Visa and Olympics organizers can do to prevent those incursions, but the free market may be resolving any conflicts in Visa's favor. Competitors' attempts to steal the official sponsor's thunder during the 17 days of internationally televised events can easily backfire, analysts said.
"There are data that suggest that anybody that advertises during the Olympic period when Visa is doing its heavy advertising tends to be recalled as Visa advertising," said Alan Bergstrom, president and chief executive officer of Brand Consultancy in Norcross, Ga. "If I were a competitor of Visa, I would think twice about doing any significant advertising during that period because it's going to reinforce Visa."
In the United States, MasterCard plans to keep a "continuous presence" on national networks and other media during the Olympics with its "Priceless" advertising campaign, a spokesman said.
John Verco, senior vice president and general manager of MasterCard for Australia and New Zealand, said MasterCard will not get "distracted by the advertising weight being thrown at the Olympics by Visa" and will not enter "into short-term, questionable return on initiatives to try and ambush this event."
Mr. Verco said MasterCard has been working hard to develop alliances and products for its member banks and has "won a number of new business deals in New Zealand and Australia."
"We see the distraction the Olympic sponsorship is to our competitor as a major opportunity for MasterCard now and through 2000," Mr. Verco said.
American Express, which ceded the Olympics' card sponsorship to Visa after the 1984 Los Angeles games, said it has no plan to advertise this time.
The Olympics has become a cornerstone of Visa marketing. Though the San Francisco-based association would not say how much the sponsorship costs, analysts said it is around $50 million for a four-year cycle that consists of both summer and winter games.
Visa U.S.A. reportedly spent $40 million on a five-year sponsorship contract with the National Football League, but that gives it an annual presence.
William Chipps, senior editor at IEG Sponsorship Report, a Chicago-based newsletter, said that in order to be worthwhile, Visa's total Olympic expenditure needs to be at least three to four dollars on marketing for every dollar paid for the sponsorship -- and that does not include its media buy.
"A company can sponsor an event, but the sponsorship isn't going to do much for them unless they spend some extra money to activate it through consumer sweepstakes or client hospitality," Mr. Chipps said.
According to Competitive Media Reporting, Visa spent $26.7 million on advertising for the 1996 summer Olympics in Atlanta and $18.3 million for the 1998 winter Olympics in Japan.
Visa is developing up to five television commercials that will debut in January. Print, radio, and Internet advertising will also be part of the campaign.
The ads are still being created, but Visa said they will "make an emotional connection between the key Olympic attributes of aspiration, inspiration, global reach, and the pursuit of one's dreams."
Visa will be the only payment system allowed to advertise during Olympics programming on NBC, MSNBC, and CNBC.
"The best-known brand in the world is the Olympic brand," Mr. Bergstrom said. It "has close to 98% global awareness around the world, so if I hitch my name to it, I'm buying reach."
Three billion people watch the Olympics worldwide, Visa said. This may be rivaled by the World Cup of soccer, a quadrennial tournament that MasterCard has sponsored. It dwarfs the Super Bowl audience of 130 million in the United States and 800 million worldwide.
"There is no more powerful a sponsorship marketing platform than the Olympic games," said Rebecca Saeger, executive vice president of brand marketing at Visa U.S.A.
Visa cited research showing that more than 66% of Americans think Olympics sponsors deserve their business. Since it started sponsoring the Olympics in 1986, Visa's market share has risen by 33%, to 53%, the company said.
"Obviously, not all of that is from the Olympics," said Michael Lynch, vice president of event and sponsorship marketing. "But we're finding that those who are aware of our Olympic sponsorship are more likely to use the Visa card than those that are unaware."
Visa's plans for 2000 are extensive. All its promotions and advertising will run under one slogan: "Dream with No Boundaries."
In a promotion that began last month and will run through May, every person making a Visa purchase will be automatically entered to win a trip to the games in Sydney. Five cardholders will be chosen randomly.
In another sweepstakes, 10 cardholders will be selected to win $5,000 and have $5,000 donated in his or her name to the American Olympics team of their choice.
Visa has alliances with the Australia Tourism Commission, Sydney Convention and Visitors Bureau, and Tourism New South Wales to supply Australian imagery for banks' and merchants' marketing efforts.
Visa also has formed strategic partnerships with U.S. sports governing bodies such as USA Gymnastics and USA Track & Field. It will continue donating money for U.S. Olympic athletes through a program called "Reach for the Dream," scheduled to run through September 2000.
Visa would not say whether it plans to renew its Olympics sponsorship beyond Sydney, but it is widely expected to try again.
A new contract would start with the 2002 winter games in Salt Lake City. The organizing efforts there have been plagued by a bribery scandal concerning the city's selection. Visa has had no comment on the matter.
"The Olympics has been tarnished a little, but if Visa were to walk away from it because of that, it would be a mistake," Mr. Bergstrom said. "The Olympics certainly will not go away, there will be some reforms, and it will return at some point to its original luster."
Richard G. Barlow, president of Frequency Marketing Inc. in Milford, Ohio, said, "All of the scandals notwithstanding, (the Olympics) stands for excellence in human performance, and integrity in human competition, and the ultimate fraternity of man in the cooperation of such an event."
He added, "Once the games begin, people will not be interested in anything but the competition."
