Research Goal The main goal of doing a project on AMBUSH MARKETING is to know that how it take advantage of situations

which allow brands/products to get extra exposure at minimal cost. Research Objectives 1. To examine the unethical issues in the advertising industry. 2. Determine the need of Ambush Marketing. 3. To analyze the measures of Ambush Marketing. 4. To study whether Ambush Marketing is ethical or unethical. Research Questions 1. What are the measures to combat Ambush Marketing? 2. Is it ethical for a company to ambush an event? 3. Why do brands with excellent reputations get into this? Research Methodology The methodology of the study includes study of library references and latest literature on the various educational sites, and compilation of the secondary data and information obtained from various journals. My research methodology will be doctrinal as well as non-doctrinal in nature and therefore data will be collected from both primary and secondary sources. The method of research would be deductive as conclusion would be drawn after the analysis and interpretation of data collected

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CHAPTER 1 UNETHICAL PRACTICES IN ADVERTISING INDUSTRY The field of advertising is extremely broad and diverse. Advertising is a form

of communication intended to persuade the viewers, readers or listeners to purchase or take some action upon products, ideals, or services. It includes the name of a product or service and how that product or service could benefit the consumer, to persuade a target market to purchase or to consume that particular brand. These brands are usually paid for or identified through sponsors and viewed via various media. The Second Vatican Council declared: If the media are to be correctly employed, it is essential that all who use them know the principles of the moral order and apply them faithfully in this domain.1 The ethical problems of advertising are: 1) Comparative Advertising: Comparative advertising is advertising where one party advertises his goods or services by comparing them with the goods or services of another party. Other party is usually his competitor or the market leader of that good or service. Dont make fun of your competitors products. Comparative advertising was either negative or positive. Negative comparative advertising featured the advertised brand derogating the comparison brand (I am OK, youre not OK). Positive comparative advertising claimed superiority over the comparison brand in a no derogatory manner (You're OK, I'm more OK).

2) Puffery: Advertising or other sales representations, which admire the item to be sold with opinions, or exaggerations, vaguely and generally, stating no specific facts.2 Using claims or descriptions to exaggerate (puff up) a products reputation or appeal likes a) new, b) Unique, c) extra strength and d) super strength.
1

http://www.vatican.va/roman_curia/pontifical_councils/pccs/documents/rc_pc_pccs_doc_22021997_ethics-inad_en.html#top http://www.oppapers.com/essays/Ethical-Issues-Advertising-Communication/179224

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3) Deceptive Advertising:3 Promotional techniques (such as attraction and switch pricing) designed to influence buyers with false or misleading claim. Many governments around the world use regulations to control false, deceptive or misleading advertising. Example: Companies may advertise sales at 50% off. However, the company first marks the product way up and then marks them down 50% so that they still make a profit.

4) Stereotyping: Stereotypes act like codes that give audiences a quick, common understanding of a person or group of peopleusually relating to their class, ethnicity or race, gender, sexual orientation, social role or occupation. This is an Ethical practice for the businesses to advertise the products by gender. 4 Business often uses the Age discrimination in advertising the product which is accurately made for the specific age group. Companys Target some of the Religions by their product. If your advertising is directly Hitting the other religions this practice of advertising.

5) Ambush Marketing: Ambush marketing is a marketing campaign that takes place around an event but does not involve payment of a sponsorship fee to the event.5 For most events of any significance, one brand will pay to become the exclusive and official sponsor of the event in a particular category or categories, and this exclusivity creates a problem for one or more other brands. Those other brands then find ways to promote themselves in connection with the same event, without paying the sponsorship fee and without breaking any laws.

6) Endorsement: An endorsement or testimonial is any advertising message that consumers believe reflects the opinions, beliefs, or experiences of an individual, group, or institution. Endorsers must be qualified by experience or training to make judgments, and they must actually use the product.
3
4

http://www.scribd.com/doc/24239373/Ethical-issues-in-Advertising http://www.media-awareness.ca/english/issues/stereotyping/ 5 Skildum-Reid, Kim. The Ambush Marketing Toolkit, McGraw-Hill, September 2007. ISBN 0070138087.

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Some moral principles that are particularly relevant to the advertising are: 1) Truthfulness in Advertising: Some advertising is simply and deliberately untrue. It is not that advertising says what is overtly false, but that it can distort the truth by implying things that are not so or withholding relevant facts. The trust factor is there in the advertising and when they promote their products in false manner that is it hurt the consumers feelings. Thus, truthfulness becomes an ethical issue.

2) The Dignity of Human Person: An imperative requirement that advertising respect the human person, his right duty to make a responsible choice, his interior freedom; all these goods would be violated if man's lower inclinations were to be exploited, or his capacity to reflect and decide compromised.6

3) Advertising and Social Responsibility: The ecological issue is one. Advertising that fosters a lavish life style which wastes resources and despoils the environment offends against important ecological concerns. The fundamental is at issue here: authentic and integral human development.
7

Advertising that reduces human progress to acquiring material goods and cultivating a lavish life style expresses a false, destructive vision of the human person harmful to individuals and society alike.

http://www.westga.edu/~mrickard/Web%20Stuff/Advertising/PDF/Advts03CH02.pdf www.blackwellreference.com Ethics Practical (Applied) Ethics

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CHAPTER 2 AMBUSH MARKETING Ambush Marketing might be the sneakiest, most devious, and controversial forms of marketing. The term was coined in the 1980s by Jerry C. Welsh at American Express It is also known as Parasite Marketing or Guerilla Marketing, is a practice common to major cultural or sporting events where an advertiser which is not an official sponsor of the event intends to associate itself to the event without paying the organizer for the right to do so.8 It can be defined as an attempt by an organization to benefit from the goodwill or popularity of a particular event by creating an association between itself and the event, without permission from the relevant organization and without paying the fees to become an official sponsor. Ambush marketing is a form of marketing in which a group takes advantage of an event (that is usually highly publicized, documented, and seen by many) but with no affiliation with the event and no fee is paid. It is basically a promotion tactic designed to associate a company, product, or service with a particular event, or to attract the attention of people attending the event, without payment being made for an official sponsorship. However, sports particularly provide companies with a greater opportunity to advertise their marks, goods and services to a wide and sometimes worldwide audience and, at the same time allow interested parties to be associated with a major event. Ambush marketing is used by companies to intrude upon public consciousness surrounding a sports property. Thus, ambush marketers avoid the cost of paying expensive sponsorship fees while gaining the benefits of associating with a sports property at the expense of the sponsor. Recently, Ambush marketing has received a lot of publicity in the Indian and international marketing arena. The ambush consists of giving the impression to consumers that the ambusher is somehow affiliated with the event. Ambush marketing can provide some, if not most, of the benefits of a legitimate, paid-for sponsorship at relatively little cost.9 It is used by companies to intrude upon public consciousness surrounding a sports property. Thus, ambush marketers avoid

8 9

Journal of Advertising Research (Dennis Sandler and David Shani, August 1989). Ambush Marketing: A Critical Review and Some Practical Advice (Dean Crow and Janet Hoek)

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the cost of paying expensive sponsorship fees while gaining the benefits of associating with a sports property at the expense of the sponsor. Types of Ambush Marketing: There are two types of ambush marketing: a) Direct Ambush Marketing: Direct ambush marketing includes measures whereby the unauthorized company suggests to the public that it is an official sponsor of a major sporting event by using signs and terms which are protected by the organizer10. It often involves breaching copyrights and trade mark rights against which the organizer can usually defend themselves by means of the respective legal instruments. Example: when the non sponsor uses the official events logos, symbols or mascots.

b) Indirect Ambush Marketing: These are more subtle measures undertaken by a company through different forms of association. In this regard, the ambusher benefits from the increased media presence without making an own contribution. Such marketing measures do not necessarily breach any copyrights or trade mark rights.11 It can be distinguished between Ambush marketing by intrusion and by association. Ambush marketing by intrusion12 includes marketing activities which take place during the event and which usually occur "as an ambush" by sudden and one-off activities attracting a great deal of attention. Ambush marketing by association refers to advertising campaigns running parallel to a sporting event creating an association with the event, in some cases intended to imply to the consumers that the advertiser is an official sponsor or has official approval from the organizer.

10
11

www.icmrindia.org/casestudies/catalogue/Marketing/MKTG046.htm http://www.pr-inside.com/ambush-marketing-case-study-successfully-leveragin-r2070705.htm 12 www.ashurst.com/doc.aspx?id_Content=4872

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Need Of Sponsorship It would be pertinent to review why exactly companies do sponsorships as a part of their marketing programs because this will help explain the implications of ambush marketing. Audience awareness: When people are relaxing they can imbibe information faster. This helps the brand message penetrate effectively into the consumer psyche. Image: Sponsorship leads to the brand's image enhancement by virtue of association with a high profile event.13 Segment targeting: Sponsorship enables the marketers to target their consumers in an efficient & relevant manner. So if Mercedes Benz wants to reach CEOs, they can do so more efficiently by sponsoring a golf tournament than by advertising on TV. Other options: Sometimes companies have no other avenue for reaching the masses due to governmental restrictions on advertising etc. (for example many tobacco & alcohol companies cannot directly advertise). Public Relations: Finally, sponsorships give an opportunity to get high visibility & Free PR Benefits Of Sponsoring: In todays business world, competition can be intense and your company should stand out. One way to make your company unique is to sponsor sports, sports events or personalities, to create an impression into the consumers consciousness. When the company sponsors sports, especially if it is a big event or an influential personality, they build a stronger brand or company awareness and image into the eyes of consumers because they will become more familiar with your brand/company14. With this, the brand/company will stand out from among the many companies offering similar products. The companys public relations are also improved when they sponsor sports as the more community events they help out, the more the public will perceive your company as one that cares about the community and the peoples welfare. Remember that sponsoring sports is also a marketing strategy. While doing so, the company can incorporate other marketing strategies such as advertising and corporate hospitality.

13 14

www.brandchannel.com/features_effect.asp?pf_id=98 http://www.runtight.com/benefits-of-sponsoring-sports/

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Both, organizers and sponsors do get benefits by sponsoring an event or players. On the first hand, the organizers need sponsoring. In terms of sportive activities, sponsoring has become an essential part of the development of todays sports and is one of the most fruitful means of revenue.15 Without the presence of sponsors, organizers of the major events such as the FIFA World Cup or the Olympic Games would not be able to obtain the sources of income to get the events going. On the other hand, sponsoring derives in many benefits for the sponsors as well, such as: Getting their marks, goods and/or services advertised during the event to a massive audience, sometimes worldwide. Association with the image and principles of sports and with the sponsored activity.16 The ability to tackle new commercial markets and public. Obtaining the recognition of the public and an association with the sponsored event. Benefit with the association with one or some of the heroes of todays society, that is: sportsmen Finally, the public and the cities hosting the event also benefit with sponsoring because same permits the audience to have a well organized event, increase the towns commercial activity in the host country and, no less important, the city and its citizens will receive improved and sometimes new venues and better and new infrastructure, among other benefits. How Is It Done? The ambush marketing is done in following ways: Purchase advertising time on television before, during and after an event; Erecting billboards near the event; Using planes to fly their banners overhead or handing out free merchandise, like caps or T-shirts, at or near the event so that spectators who are picked up by television cameras become walking billboards;

15 16

www.ideatoproduct.org/ut/index.php?option=com http://www.pb-managementevent.co.uk/Benefits-of-sponsoring.html

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 Any of these techniques might be combined with the use of imagery or words in advertising ; Giving away free tickets to the event as prizes in an advertising campaign; Sponsoring individual teams or athletes instead of the event itself; Even sponsoring the city where the event is held, etc. Ambushing Strategies: The companies entering for the ambush marketing of their products usually follow the following strategies to promote their goods through ambushing17: Sponsor the Broadcast of the Event Sponsor Subcategories within the Event Purchasing Advertising Time Around Relays of the Competitors Event Engage in Major Non-sponsorship Promotions. Pourage Agreements Corporate Hospitality and Ticketing. Examples Of Ambush Marketing: During the 1984 Olympics in Los Angeles, where Converse was the official sponsor, Nike built large walls close by the Los Angeles Coliseum and displayed the Nike logo with several athletes wearing the marks clothes; the ads could be seen from inside the Coliseum. At the Atlanta 1996 Olympics, the winner of the 100 meters race, Linford Christie appeared at a press conference wearing contact lenses with the Puma logo in the center of same, when Reebok was the official sponsor of the event. In the same Olympic Games, Nike handed the public at the venues entrance, paper flags bearing the Nike logo, which were captured by the TV cameras in despair of Reebok, the official sponsor. T-Shirts were handed out by the same firm during the 1992 Barcelona Olympic Games with the same effect.
17

Typology of Ambush Marketing : The Methods and Strategies of Ambushing in Sport (Nicholas Burton and Simon Chadwick, Coventry Universty, 2009)

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 Pepsi flew a hot air balloon over the Sharjah on the day of the Coca Cola Cup final On the other hand, Coca Cola launched its C2 refreshment by sponsoring 8 cars during the Pepsi 400 at the Daytona Speedway. Inside the track, Pepsi signs were seen but outside the venue, Coca Cola placed stands and banners everywhere. Visa was the official sponsor of the Winter Olympics at Lillehammer (Norway) in 1994. and aired TV commercials were they claimed that American Express cards were not accepted at the Olympic Villa. However, American Express aired ads which stated that American travelers did not need any visa to travel to Norway. Having seen some of the examples of ambush marketing by intrusion, it is clear that non sponsors and ambushers gain from their intrusion activities because they advertise their marks, goods and/or services to massive audiences, potentially attacking new markets or commercial segments. They also benefit with the association the public will most certainly do with their marks and the event or the teams and sportsmen participating in same. Effects Of Ambush Marketing Ambush marketing is considered an unethical business practice. It is, therefore, not surprising that companies who execute successful ambush marketing campaigns are hesitant to publicly release information about campaign results. Nothing is gained by deliberately inviting the possibility of a public backlash. While some companies do not deny that they indulge in ambush marketing activity (e.g. Nike), others strongly object to this description and argue that the timing of their activity was just coincidence and not ambush. These are just some of the reasons why research on ambush marketing is both sparse and difficult. Ambush marketing efforts were reported to have a marked impact on respondents. the effects of ambush marketing appear to have been quite evident at the 1988 Winter Olympics in Calgary. Sandler and Shani12 found that in only four out of the seven product categories studied, was the official sponsor able to achieve significantly higher levels of awareness than its ambush marketing competitor. These results are reinforced by another study13 that revealed ambush marketers at the 1992 Albertville Winter Olympics were identified as sponsors more often than official sponsors that failed to sufficiently associate themselves with the event.

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CHAPTER 3 CASE STUDIES REGARDING THE AMBUSH MARKETING CASE 1. ARGENTINA FIFA & PEPSICO CASE18 The ambush marketing in Argentina in a case handed by the firm I am a partner with, which involves FIFA and Pepsico Argentina S.A. The latter was not an official sponsor of the FIFA World Cup of Korea-Japan 2002, instead, its main rival was. This matter arose before and during the cited event, when the latter decided to air a TV commercial involving several well known soccer players who were participating in a soccer match in a small soccer field and wearing jerseys bearing the Pepsi trademark under the banner Tokyo 2002. In addition to this, the opponents of the soccer players were Sumo Asian fighters. The ambusher PepsoCo- cared to use the phrase Tokyo 2002 instead of the registered trademark Korea Japan 2002, but the association to FIFAs event was still clear as the latter was to be held partially in Japan and the real soccer players involved in the commercial were to take part in such event. Besides, the inclusion of the Sumo fighters in the commercial was clearly to mislead the public with respect to the involvement of PepsiCo regarding FIFAs event. Moreover, the commercial was aired just a few days before the event started. FIFA sought a precautionary measure through our firm in order to obtain the immediate cease in the airing of said TV commercial by any means. The Court granted the measure to all effects because it found that said commercial suggested a presumed sponsorship relationship between the parties which did not exist in fact. This was the first precautionary measure of the kind obtained by FIFA anywhere in the world. Moreover, the snacks division of Pepsico Argentina S.A. further launched a line of potato chips bearing the blue and white colors and the word Mundial Spanish translation of the registered FIFA mark World Cup-. Upon a similar precautionary measure the defendant was also ordered to cease in the use of said word in the packaging of its chips and Pepsico had to remove all merchandise from all major chains of stores and cease in the commercialization of said products.The issue of infringement is to be soon decided by the Court.

18

Bean L (1995). Ambush marketing: Sports sponsorship confusion and the Lanham Act. Advertising Age, 75 (Sept.), 10991134.

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CASE 2. FIFA STAMPS OUT AMBUSH MARKETING19 FIFA has taken a firm stand against LG Electronics SA's attempt to ride on the massive marketing and publicity for the FIFA World Cup 2006, currently being held in Germany. In response to complaints made to the Advertising Standards Authority (ASA), LG has agreed to amend its advertisements by deleting all references to the FIFA World Cup. During April and May 2006, LG advertised a competition in which the prizes offered were three "trips for two to the final in Germany". The images and phrases used in the advertising were obvious allusions to the FIFA World Cup, and appeared in various formats, including television, print media and on LG's website. The competition was due to close on 12 June. FIFA's rights protection program involves the global registration of the World Cup trademarks, as well as the worldwide appointment of legal experts to safeguard against illicit association. Through its South African legal representatives, Adams & Adams, FIFA took steps to protect its sponsors' rights by lodging complaints with the ASA. "The FIFA World Cup is a sponsored event, and only 15 corporations were granted marketing rights for the event," says Kelly Thompson, partner at Adams & Adams. "Since LG is not an official sponsor, the first complaint was lodged on the basis that the advertisements were misleading. The general terms and conditions which apply to match tickets prohibit ticket holders from transferring tickets to third parties, in particular as part of a giveaway or competition prize. This meant that LG was prohibited from honouring the prize offered." "The second complaint was lodged on the basis that the advertisement amounted to a breach of the ASA's sponsorship code, which prohibits third parties other than official sponsors from launching event-related sales promotions to give the impression of sponsoring such an event," continues Thompson. Thompson says the enormous popularity of events like the FIFA World Cup often tempts unauthorized third parties to try to benefit by associating themselves with the events. "With the

19

Lyberger M & McCarthy L (2001). Sport Marketing Quarterly, 10 (2), 130- 137.

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2010 FIFA World Cup on the horizon, the public should be aware that FIFA will take action against third parties attempting to benefit from the event without paying sponsorship fees." CASE 3. ICC CONTRACT TO KEEP "AMBUSH MARKETING" CLAUSES20 Despite threats of a boycott by leading players, the International Cricket Council says that it will retain its "ambush marketing" provisions for ICC events for the Champions' Trophy. Clauses in the ICC contract barring players from endorsing products of rival companies 30 days either side of a tournament, written into the contract to protect official sponsors, has outraged top cricketers from several countries who have refused to sign the contract. ICC chief executive Malcolm Speed, however, says that despite the opposition from players the ICC would not allow any company to cash in on its events secured through the large sums of money paid by official sponsors. He says that while there is a separate agreement for each event, they are substantially the same. The ICC could carry out a future review of its contract, but he doesn't foresee any major alterations with regards to the clauses in question. The controversial contract will remain in place for next year's World Cup, to be held in South Africa, and all players signing it will be bound to play under its terms. The Indian cricket board has warned that although national boards are obliged to field their best sides in ICC tournaments, it could be forced to send an under-strength squad to Sri Lanka for the Champions Trophy if top players refused to sign. Many English and Australian players supported the stance of the Indians, but this week the Australian Cricket Board reached agreement over players' rights that addresses players' concerns over the use of their images, but also protects the ICC's commercial partners by accepting the proposed terms of the contract. The English Cricket Board says that it is close to an agreement on the conditions which specify that boards and players meet the obligations of tournaments and their commercial partners. If an agreement is reached it will mean that the Indians will be isolated in their protest.

20

Natal Witness (2003). Ambush marketing fight at World Cup http://www.legalbrief.co.za/view_1.php?artnum=9133. Accessed 07 August, 2003.

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The New Zealand players are unaffected by the dispute as they have already signed contracts for the ICC Trophy. Says New Zealand Cricket chief executive Martin Snedden, "The issue is a crisis and all parties need to do more to resolve it. If the issue is not resolved it will have serious consequences for the ICC, its member nations and players. This is not a time to apportion blame; it is the time to find a pragmatic solution before the crisis results in serious financial consequences for all parties." CASE 4. COCA COLA IS DEPLOYING AMBUSH MARKETING TACTICS21 Taking the direct advertising wars and spoof brawls of the cola majors a step further, Coca Cola is deploying ambush marketing tactics during the Indian Premier Leagues cricket season-II Both PepsiCos Youngistaan brand ambassadors Virender Sehwag, captain of Delhi Daredevils, and Ishant Sharma, member of Kolkata Knight Riders (KKR) have been formally present at various promotional activities for arch-rival Coca-Cola India, simply because CocaCola is the associate sponsor and the official pouring partner for both Delhi Daredevils and Kolkata Knight Riders. Sehwag, for instance, attended a special send-off ceremony for Delhi Daredevils organized by Coca-Cola India. At the event, Sehwag, along with Coke brand ambassador Gautam Gambhir, unveiled a limited edition bottle of Coca-Cola for IPL. The campaign will run till the end of the IPL season and will involve merchandising opportunities as well, said Srinivas Murthy, general manager, marketing, (flavors), Coca-Cola India. Ishaant Sharma (another Pepsico Youngistaan brand ambassador) from KKR will now be spotted on Sprites limited edition bottles and hoardings, along with Saurav Ganguly and Shah Rukh Khan (both, incidentally, are ex-Pepsi brand ambassadors). Sprite Kolkata Knight Riders limited edition bottles will have the insignia of key players of the KKR team, featuring Saurav Ganguly, Ishant Sharma and David Hussey or Saurav Ganguly, Brendon McCullum and Murli Karthik. Ambush marketing, a term coined by marketing guru Jerry Welsh, refers to means by which companies not officially associated with an event ride on its popularity and get themselves subtly
21

http:// www.marketing-bulletin.massey.ac.nz/V14/MB_V14_A1_Crow.pdf

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associated with it. The ambushers often gain as much mileage as the events official sponsors. One of the most popular examples of ambush marketing was the 1996 Cricket World Cup. CocaCola was the official sponsor and paid around Rs 40 crore for the privilege, but PepsiCo cheekily stole all the limelight with its Nothing official about it campaign. In India, there is almost no protection against indirect ambush marketing. However, for direct ambush marketing, there are several laws like The Trade Practices Act, the Trade Marks Act, The Copyright Act, The Counterfeit Goods Act and the Merchandise Marks Act. The big disadvantage is that IPL had to move out of India and a lot more could have been achieved if the event had been on Indian soil, said Bijoor, adding: Further, cola wars have reached a certain degree of fatigue and may not catch as many eyeballs as they once did. CASE 5. ORGANIZERS TACKLE AMBUSH MARKETING BEFORE BEIJING

OLYMPICS22 Multinational companies have paid a king's ransom for their right to sponsor the Olympics, and they are scanning the horizon for ambushes as they drive the marketing bandwagon toward Beijing. Since China won the right to host the Games seven years ago, the government, Olympic officials and Beijing organizers have been building legal barricades to try to prevent unlicensed companies from pilfering any Olympic gold dust. The Beijing Games have 12 global sponsors in the top partners program for the 2006 Winter Games and the 2008 Summer Games, with contributions totaling around $900 million. They are: Atos Origin, Coca-Cola, General Electric, Manulife, Johnson & Johnson, Kodak, Lenovo, McDonald's, Omega, Panasonic, Samsung Electronics and Visa. The Beijing organizers will attract an additional $1 billion from local marketing contracts. Using the five-ring logo, selling unauthorized versions of the mascot and trying to persuade the public that your company is part of the Olympic family through advertising sleight-of-hand are among ambush marketing tactics being targeted.
22

Ambush marketing An Olympic event ( John A. Tripodi and Max Sutherland , USA, Journal of Brand Management, May 2000)

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Regulations covering sponsorship of major sporting events have been progressively widened and now routinely encompass what spectators can eat, drink and wear in venues and stadiums. Some regard ambush marketing as parasitic and ethically dubious; others say it is the product of imaginative thinking and does not affect the bottom line of an Olympics. The Sydney Olympics in 2000 were the first to be protected by legislation aimed at preventing nonsponsors companies from using official insignia and phrases like "Sydney Games." Athens followed suit four years later, targeting spectators, who were prevented from entering stadiums if they were eating or drinking products of nonsponsors. Beijing has posed a far greater problem than any previous games because of China's reputation for producing pirated goods and its lax attitude over intellectual property rights, which is a source of tension with the United States. Jason Schmitz of Mayer Brown Rowe & Maw in Chicago, said ambushers were unlikely to make such a dent on official sponsors' exposure that this could threaten an event's budget. Nonetheless, since 2001, China has issued a series of decrees to protect the Games, and the Municipal Bureau of Intellectual Property in Beijing is in charge of increasing awareness. "Beijing has made a clear commitment on the rights of the sponsors," said Zhou Jidong, director of Beijing's municipal legislation affairs office. "I believe during the Games there will be proper measures to protect their legal rights according to the IOC's and sponsors' demands." Unauthorized drinks will be banned from Games venues in August as will spectators' T-shirts advertising nonsponsors. Unlicensed T-shirts, caps and other accessories carrying the Beijing Olympics logo or mascots are still sold openly in street markets. "We are taking this issue very seriously," Gerhard Heiberg, marketing commission chief of the International Olympic Committee, said in an interview this year. "This is brand new to Chinese companies. Some do it with good intentions and some not with good intentions." "There are very few court cases," said Kelly Crabb, a partner with Morrison & Foerster in Los Angeles and an international counselor for the Beijing organizers. "And those that do exist basically favor the ambusher as opposed to the ambushee."

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"But there's enough incentive on the part of the organizer," Crabb said. "Because there's so much money involved coming from the official sponsors that if you don't do something that source of revenue is going to dry up." If an injunction were brought and lost, the precedent would make the sponsor even less happy, Jeffrey Gewirtz, general counsel for the New Jersey Nets basketball team, told a Sports Lawyers Association conference in May. "Sometimes you're hamstrung only by the statutory sword or weapon that you have," he said. In Britain, the organizers of the 2012 Olympics have tried to tighten the legal screw even further - under a new law, the combined use of words such as "2012" and gold in advertising by non sponsors could result in legal action. Protective measures can veer toward the farcical. Organizers at the Turin Winter Games in 2006 covered up reporters' laptop logos with tape so nonsponsors' names could not feature in camera shots. At the soccer World Cup in 2006 hundreds of Dutch fans were asked to remove their orange trousers before entering a stadium because the clothing advertised a nonsponsoring beer company. Ambush marketing via fans was targeted by the Major Events Management Act passed by the government of New Zealand, which will host the 2011 Rugby World Cup and 2015 Cricket World Cup. There is a threat of up to three months in jail for invading the playing field, after streakers painted with the logos of nonsponsors interrupted matches. The 1996 Cricket World Cup in India was the scene of one of the more blatant examples of ambush marketing when Pepsi flew large balloons near match venues and used its "nothing official about it" to take the spotlight off Coca-Cola, an official sponsor. Other ways around the rules are advertisements on television and radio during Olympic broadcasts, viral marketing through online videos, blogs or e-mails, and sponsoring individual athletes and teams attending the Games. The British sprinter Linford Christie wore contact lenses with the image of a puma on them before the 100 meters final in Atlanta, earning the nonsponsor, Puma, huge publicity.
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Despite sponsors' anger over ambushes, many experts say companies grabbing a free ride on the back of an Olympics merely confirm the clich that there is no such thing as bad publicity. Others say the dangers posed to intellectual property rights by the Games in China and the proliferation of nonofficial marketing could have an impact on the sums sponsors are prepared to pay. This year Nike has signed up the hurdler Liu Xiang, a gold medalist in Athens who is hugely popular in China. Speedo is one of the most talked about sports brands in the world after a host of swimmers broke world records in its new swimsuit. Neither are official sponsors or suppliers of the Games. Nor is Li Ning, the giant Chinese sportswear retailer founded by the gymnast who won three gold medals at the 1984 Games, which will have its logo on shirts and shoes worn by sportscasters at the state-run Chinese channel, which has exclusive rights to mainland broadcasts in August. "These days, it doesn't make much sense to sponsor the Olympics, as you cannot set yourself apart from others any more as brand awareness is diluted," said Shaun Rein, managing director of China Market Research Group. There are two cases which explains the Indian scenario in the Ambush Marketing: CASE 6. NHL v. PEPSI23

First case to deal head-on with pure-ambush marketing; Pepsi promoted a scratch card which stated If X city(home of a NHL team) wins Y number of matches, you win. This was in addition to other promotional measures like Tshirts, caps etc.

Disclaimer was provided on the card that the campaign did not associate itself or sponsor the NHL. In fact, Coca-Cola did.

23

Journal of Advertising Research (Dennis Sandler and David Shani, August 1989)

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The Court identified the tort of passing off, by means of suggestion, that the plaintiff was in a way authorising or endorsing the product.

It also stated that the defendant could also cash in on the goodwill of the plaintiff. However, the Court found that the likelihood of confusion was very minimal, and even if there was any, it was eliminated by the disclaimer.

The decision of the Court was that ambush marketing, done bona fide, was an acceptable business practice in Canada.

CASE 7. ICC v. ARVEE24

Philips had indulged in a promotional campaign Philips : Diwali Manao World Cup Jao and Buy a Philips Audio system : Win a ticket to the World Cup .

The words were accompanied by an image of a ticket with fictitious seat and gate number. Philips was not one among the 9 official sponsors of the ICC World Cup. The ICC filed suit, citing passing off, unfair competition and ambush marketing. The Court held that slogans only pointed that the purchaser of Philips may win a prize and nothing more.

No likelihood of confusion that Philips was a sponsor or licensee thereof. There was no passing off or unfair trading.

No element of deceit in ambush marketing. Only opportunistic commercial exploitation of the event.

Not contrary to public interest, as the commercial advertising is free speech protected by the Indian constitution.

24

http://www.coventry.ac.uk/researchnet/d/691

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CHAPTER 4 AMBUSH MARKETING ETHICAL ISSUES Typically, sports property owners and sponsors view the practice as being unethical,immoral and sometimes illegal. On the other hand, many companies unable to afford sponsorship fees will regard the practices involved as a legitimate form of defensive, competitive behaviour and perhaps even deny that what they are doing is ambush marketing. Unless a clear decision is made by the courts or legislature, ambush marketing will continue and increase. The question arises as to whether or not practices such as ambush marketing are ethical, illegal, or simply smart business practice. Critics call ambush marketing "parasite marketing,"25claiming that companies are deliberately looking for ways to piggyback on their rivals' sponsorship of major events despite protests from sponsors and event organizers. The ambusher that gives the impression of involvement without payment is merely serving its own narrow self-interest and, in doing so, engages in behavior that is harmful to the greater good of sport. Arguably, ambush marketing provides a positive free market force. By exposing to official sponsors and event organizers the true scope of exclusivity that any sponsor can reasonably expect to enjoy, ambushers in effect help quantify the true market value of Olympic sponsorship while participating in the marketing blitz in a manner they deem most cost effective for their company. As it becomes clear to potential sponsors of future Olympic Games that event organizers will not be able to stop all ambush marketing efforts, this should be a factor that is accounted for in determining the fees to be paid for official sponsorship. Critics of ambush marketing would suggest that the threat of ambush marketing could ultimately impair the ability of event organizers to host elaborate and successful Olympic Games if ambush marketing deters large multinational corporations from being official sponsors. However, the appeal to large corporations of the world-wide exposure that results from sponsorship of the Olympic Games will never be diminished by market imperfections such as ambushers to the point of threatening the budgets of event organizers. Additionally, as is evident from the ongoing efforts to stop ambushers, the practice of ambush marketing encourages organizers to work harder to thwart
25

Stephen McKelvey, An Analysis of the Ongoing Global Efforts to Combat Ambush Marketing: Will Corporate Marketers "Take" the Gold in Greece?, 14 LEGAL ASPECTS SPORT 191, 193 (2004)

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intellectual property violations, and raises the awareness of intellectual property rights globallya long-term benefit to all intellectual property owners. It subverts the integrity of an event and its ability to entice future sponsors. Ambushers create confusion among consumers, for that reason, negating the official sponsors. As the FIFA 2010 World Cup draws closer, so too do ambushers keen to jump on the marketing bandwagon of South Africa's biggest event. Mike du Toit, director at Edward Nathan Sonnenbergs (ENS), Chris de Villiers, executive director of Marketing Association of South Africa (MASA). and Jeremy Sampson, executive chairman of Interbrand Sampson Group, all have strong views on the subject. Du Toit describes two types of ambush marketing: ... the first being by association and the second being by intrusion. Here, the ambush marketer does not suggest an association with the event but uses the captive audience of an event to gain maximum exposure for product or services. In both forms of ambush marketing, the marketer aims to use the event to advertise his product, whilst avoiding the financial and other obligations of an official sponsor.26 One can understand that companies are paying millions to sponsor an event and, in the case of the World Cup, hundreds of millions would be determined to protect their marketing and brand building environment, continues de Villiers. However, in the competitive world we live in today, writing off so-called ambush marketing as illegal, unethical or improper is simply not correct or appropriate. He says the ethics of each marketing situation must be judged on merit and he believes professional marketers would be loath to act unethically. Unethical tactics have a habit of doing more long-term damage to the brand than the short-term benefits warrant. MASA endorses all legal and ethical forms of marketing and its members all agree to adhere to its code of conduct. This in itself prevents people from acting irresponsibly.

26

Lori L. Bean, Ambush Marketing: Sports Sponsorship Conference and the Lanham Act, 95 B.U. L. REV. 1099 (1995).

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FIFA naturally has the obligation and right to protect its sponsors and its event, and it has a strong opinion against ambush marketing. This stance is one of the reasons for the conflict surrounding the topic now. In response, Jeremy Sampson wrote a letter to Business Day highlighting the fact that ambush marketing has developed into an art form and is undeniably effective. Marketers will therefore employ it. This is not to say that ambush tactics should simply be accepted and sponsors should happily see the value of their high-priced deals eroded. Sampson notes that being ambushed is inevitable, but there are steps companies can take to minimize the action and the damage to sponsors.

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CHAPTER 5 MEASURES TO COMBAT AMBUSH MARKETING There are various alternatives to take to prevent the association and intrusion activities by non sponsors or, at least, improve the odds against them. The first thing to do is for the organizers to effectively protect usually via trademark registrations- the official symbols and logos of the event, including the eventual mascot, if existing. This would be helpful to combat ambush marketing by association. The actual laws of most countries are not adequate to prevent ambushing activities. Most countries including Argentina- still rely in their traditional IP Laws to protect sponsors against ambushers, however, these laws seem to be ineffective in most cases, due to the creativity of the ambushers and the way they circumvent those regulations. In Germany, if an ambush marketing campaign includes the unauthorized use of any words, symbols, logos or slogans that are similar to or identical with protected trademarks, the mark-owner may ban such use under section 14 of the Trademark Code (MarkenG) and seek injunctive relief to end the ambush campaign immediately. He may also sue for damages under the same provision 27 . The UK Position is broadly similar to that in Germany. It is an infringement of a registered trademark for a party without the permission of the trademark owner to apply the trademark to any goods or services. Similarly, in the United States, an event organizer who owns a federal, state or common law trademark can seek an injunction under the Lanham (Trademark) Act, state law or common law against the unauthorized use of the trademark or a colourable imitation.28 We have mentioned that intrusion ambush marketing needs special legislation regarding the protection of major sporting events. This specific legislation is a condition to be eligible as a host of the Olympic games, for instance. Sydney 2000 were the first games in which this type of special and ad hoc legislation was put in practice and Athens 2004 followed. This kind of ad hoc legislation is an exception to the standard legal systems of each country and is designed to protect the major sporting event a particular city or country is to host. In general, the scope of this kind of regulation is limited to a certain event and does not apply to any other event or sports. The need for this type of legislation is recognized by the European Sponsorship Association (ESA).
27 28

http://vls.law.vill.edu/students/orgs/sports/back_issues/volume3/issue2/ambushinghtml http://www.legalbrief.co.za/view_1.php?artnum=9133

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Other examples of ad hoc legislations are the ones adopted by Portugal for the UEFA Euro 2000 Nations Cup; the one adopted by Korea for the FIFA World Cup of 2002; the same status quo was granted in South Africa for the Cricket World Cup (where it is a criminal offense to gain promotional advantage for a mark by association with a certain event); in Germany for the Leipzig Winter Olympics; Australia for the 2003 Rugby World Cup and in London for the 2012 Olympics. Among other things, this type of legislation would regulate the way in which advertisements can be done, who can do so, where can the ads be placed and would limit the surroundings of the venues for protecting the exclusivity of the sponsors advertisements and promotional campaigns. In the case of FIFA, advertisement around the World Cup must comply with FIFAs rights and those of its official sponsors without fail. Such legislation recognizes that there is a public interest that should be protected, despite the usual private interest involved and, thus, the official symbols of the event are reserved to the organizing committee and local authorities (i.e.Portugal). An alternative to the ad hoc legislations could be found in an extensive interpretation of art. 6ter of the Paris Convention in order to obtain the extension of the prohibition of registering and using State Emblems to the events distinctive signs.29 This alternative is actually existing in Canada. Other alternatives for sponsors and organizers to combat ambush practices can be: Placing ads in the media informing who are the official sponsors. Control the photo and broadcast rights by the organizer as well as the souvenir hand out on site. Acquisition by sponsors of air timing in live and/or recorded broadcasting of the event. Acquisition of advertisement spaces close to the events venues within the realm of common sense. Sponsoring the transmissions of the event. Sending letters to the competitors well in advance to the event warning them who the sponsors are.
29

Ambush Marketing The Problem and the Projected Solutions vis-a-vis Intellectual Property Law A Global Perspective (Sudipta Bhattacharjee, September 2003 )

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CHAPTER 6 SUGGESTIONS However, aside from adopting a more realistic perspective, event owners could implement other options. First, they can reduce the number of sponsorship categories they sell. As the revenue from sponsorship will increase, the temptation to increase the number of sponsorship levels and classes will also grow. While this practice increases income for the event owner, it clearly also heightens the chance that rivals will both secure rights to the event. It is seen that more than two thirds of the people are unable to differentiate between different sponsorship levels. Thus event owners need either to reduce the range of packages sold or undertake detailed promotions that increase the publics knowledge of these packages status. If event owners and sponsors develop tighter sponsorship contracts, they could foster more pragmatic expectations about what sponsorship can achieve. The former option can also reduce the likelihood that conflicting sponsorship agreements could be entered into. Even general commercial protection may not afford the level of insulation from ambushing desired by sponsors. There must also be a concerted effort by event owners to provide transparency as to the actual rights purchased. Clarification of the actual rights purchased by sponsors should also be taken into consideration as it will help to minimize the negative impact of these activities on both sponsors and event owners. In addition, these rights should be protected via tighter contractual provisions with all parties. It is ought to be made clear in contracts, including the rights licensed, the terms of the license, prohibited uses, and rights regarding signage, trademarks and hospitality. The event owners could also reduce the range of sponsorship options they offer. Increasing the exclusivity of sponsorship rights also represents an important means of minimizing the potential for conflicting arrangements.

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CHAPTER 7 CONCLUSION This issue would raise the question whether this practice is ethical or not. However, it is difficult to draw a conclusion. The answer would depend on who this question is asked to and the facts involved. What seems to be clear is that ambush marketing tactics constitute an ethical issue and a problem for sports organizers who must defend the sponsors which paid millions for the right to exclusively promote their marks, goods and services in association with the event against those who had paid nothing for such exclusivity. In any event, if ambush tactics are to be diminished or eradicated, additional legal tools must be adopted. The creative use of ambush marketing tactics will probably always be a source of irritation to event owners and their official sponsors. The law as it now stands seems unable to accommodate the concerns of official corporate sponsors. There is no limit to human ingenuity. As such, ambush marketing at the margins will arguably always occur. To maximize the protection sponsors might receive from ambushing activities of all types, the normal commercial protections provided by trademark, copyright and passing off laws need to be supplemented by tighter contractual provisions between all of the parties involved in the sponsorship of an event. Activities not prohibited by law or the terms of the contract, would be legitimate marketing tactics; however, their potential effect should be more explicitly recognized during negotiations between event owners and prospective sponsors.

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BIBLIOGRAPHY Articles:

Ambush marketing An Olympic event ( John A. Tripodi and Max Sutherland , USA, Journal of Brand Management, May 2000) Journal of Advertising Research (Dennis Sandler and David Shani, August 1989) Ambush Marketing The Problem and the Projected Solutions vis-a-vis Intellectual Property Law A Global Perspective (Sudipta Bhattacharjee, September 2003 )

Typology of Ambush Marketing : The Methods and Strategies of Ambushing in Sport (Nicholas Burton and Simon Chadwick, Coventry Universty, 2009)

Ambush Marketing: A Critical Review and Some Practical Advice (Dean Crow and Janet Hoek) Bean L (1995). Ambush marketing: Sports sponsorship confusion and the Lanham Act. Advertising Age, 75 (Sept.), 1099-1134. Stephen McKelvey, An Analysis of the Ongoing Global Efforts to Combat Ambush Marketing: Will Corporate Marketers "Take" the Gold in Greece?, 14 LEGAL ASPECTS SPORT 191, 193 (2004) Skildum-Reid, Kim. The Ambush Marketing Toolkit, McGraw-Hill, September 2007. ISBN 0070138087

Web Portals:

http://www.runtight.com/benefits-of-sponsoring-sports/ http://www.westga.edu/~mrickard/Web%20Stuff/Advertising/PDF/Advts03CH02.pdf www.blackwellreference.com Ethics Practical (Applied) Ethics http://www.scribd.com/doc/24239373/Ethical-issues-in-Advertising www.icmrindia.org/casestudies/catalogue/Marketing/MKTG046.htm http://www.pr-inside.com/ambush-marketing-case-study-successfully-leveragin r2070705.htm http://www.pb-managementevent.co.uk/Benefits-of-sponsoring.html. http:// www.marketing-bulletin.massey.ac.nz/V14/MB_V14_A1_Crow.pdf http://pazarlamabitanedir.blogspot.com/2009/03/ambush-marketing-sinsi-pazarlama-ad.html http://vls.law.vill.edu/students/orgs/sports/back_issues/volume3/issue2/ambushinghtml http://www.runtight.com/benefits-of-sponsoring-sports/

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