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AMBUSH MARKETING - MIKE DU TOIT

The world is waiting with baited breath for the 2010 FIFA Soccer World Cup to be played, for the first time on African soil, and to top it all, in South Africa .

The world is waiting with baited breath for the 2010 FIFA Soccer World Cup to be played, for the first time on African soil, and to top it all, in South Africa . Unfortunately, apart from all the hype associated with such events, the success of events such as this is determined by financial considerations and not by what one would expect, aspects such as the magnitude of the event, the sportsmanship displayed and the obvious abundance of talent.

 

Unfortunately, the World Cup of 1986 is remembered for a different reason. Who could forget the controversy of Maradona’s goal against England in the quarter finals, immortalised by the reference to “The Hand of God”. This “upper hand” may be the reason why the 2010 FIFA World Cup in South Africa will be remembered in years to come, but for very different reasons.

 

Sponsorship of major sporting events attracting large-scale publicity has become an effective and lucrative vehicle for the promotion of brands. For the event organisers and rights holders, such as FIFA, it is a multi billion dollar business. The upcoming 2010 FIFA Soccer World Cup, is no exception.  Generally, a brand owner will pay a considerable sum of money in return for exclusive exposure of his product at such an event.  Without this cash contribution, many events are not economically viable.  In fact, many of the Olympic Games which have been held in recent times have failed to generate a profit, despite the status of the event as the world’s greatest sporting spectacle.  As expressed by one commentator: “In today’s world of mass media and professionalism, payment for the rights to be associated with an event, team or individual keeps the boat afloat…Without it, there might be no rugby to glory over, no cricket to agonise over, no soccer to toy-toy to”.

 

Against this background, the marketing industry is faced with ambush marketing or “parasitic marketing”. This occurs where a trader seeks to abuse the publicity value of an event, for example a major sporting event, to gain an unfair benefit from it despite not having any involvement, financially or otherwise. In some circles, it is regarded as unethical or indecent but some sees it as just the next step in marketing evolution. 

 

FORMS OF AMBUSH MARKETING

 

Over time, ambush marketing has crystallised into two forms, the first being by association.  This occurs where the ambush marketer represents to the public that he is the authorised sponsor of an event.

 

In contrast to the above, ambush marketing by “intrusion” uses the publicity of an event to gain unauthorised exposure for his brand.  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 his product or services.  An example of this opportunistic form of ambush marketing would include flying a specifically branded blimp over a stadium at which a sports event, sponsored by a competitor, is taking place.

 

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.

 

THE DEVELOPMENT OF THE CONCEPT OF AMBUSH MARKETING IN SOUTH AFRICA

 

The first publicised occurrence of ambush marketing occurred during the 1996 Comrades Marathon.  A competitor of the official sponsor had publicly pledged a sum of money to the South African Paralympics team for each runner who finished the race wearing a sticker on their face bearing its logo.  The incident sparked heated public debate, drawing attention to the need for legal remedies to eradicate such conduct.  Public opinion rightly favoured the official sponsor.  Nocsa president Sam Ramsamy condemned the incident as “improper, unethical and immoral”.  In hindsight, this was the first blatant example of ambush marketing by intrusion in South Africa.

 

Approximately five years later, this need was addressed via amendments to the Trade Practices Act of 1976.  The amendments provide that no person may make, publish or display any false or misleading statement, communication or advertisement which represents or suggests a contractual or other connection or association between such person and the event or person sponsoring the event, or cause such statement, communication or advertisement to be made, published or displayed.  In terms of this legislation, such conduct is a criminal offence and is punishable by imprisonment and/or a fine.  It has also been suggested that a civil action based on unlawful competition could be instituted by an aggrieved party against the offending marketer.  The shortcomings of both the criminal and civil remedies are highlighted below.

 

The above amendments, although providing a fair measure of protection against ambush marketing by association, have been criticized in two main respects.  Firstly, the civil law remedies can usually only be enforced after the event has occurred resulting in relief being granted many months later, by which time such relief may be of academic importance only.  An interdict granted at this late stage would be a toothless bulldog, and any damages claim may be difficult to prove and quantify.  The criminal remedies are stronger, but not entirely satisfactory.  It is likely that such offences would never be investigated, let alone prosecuted, considering the priorities of the SAPS.  As a result, the punishment prescribed by the amendments has a largely deterrent effect, which is minor when weighed against the benefits to be extracted from clever ambush marketing.

 

Secondly, the amendments focused on ambush marketing by association and failed to address ambush marketing by intrusion.  The result was a considerable legislative loophole, easily exploited by crafty marketers.  It is important to note that, whilst ambush marketing by association necessarily involves deception of the public, intrusion does not.  The burden of proof is therefore considerably higher in respect of intrusion.

 

Vigorous lobbying of Government by the organisers of the 2003 Cricket World Cup resulted in far-reaching amendments to the Merchandise Marks Act of 1974 (“the Act”) being passed just one week ahead of the start of the tournament.  The amendments were aimed at prohibiting ambush marketing by intrusion and have been lauded as bold and highly innovative, in that they have introduced the concept of acting unlawfully by abusing the right to use your own trade mark.

 

The amendments introduced section 15A into the Act and provide the Minister of Trade and Industry (“the Minister”) with the power to declare an event as protected, by notice in the Government Gazette.  The consequence of this is that no person may, for the period during which the event is protected, use any trade mark in relation to the event in a manner calculated to achieve publicity for that trade mark and thereby derive special promotional benefit from the event, without the prior authority of the event organiser. 

 

The criterion for designation by the Minister are:

 

  • the event must be in the public interest; and

 

  • the Minister must be satisfied that sufficient opportunity was given to small businesses, and in particular those of previously disadvantaged communities, to benefit from the event.

 

“Use of a trade mark” includes any visual representation or audible reproduction of a trade mark in relation to goods or the rendering of services, or using that mark in promotional activities in any way which, directly or indirectly, is intended to be brought into association with or allude to an event.

 

It is not necessary that the offending trade mark use occur at the venue at which the event takes place.  As a result, in-store promotions, competitions run in the media and other promotional and advertising activities would potentially be subject to scrutiny.

 

The offending marketer must intend that the use of his trade mark will attract publicity from the event and consequently cause him to derive special promotional benefit.  The effect of this qualification is that the casual spectator at an event who, for instance, wears an item of clothing bearing a trade mark of a competitor of the official sponsor, without the requisite intention, will not be guilty of contravening the section.  The burden of proving intention is simply too cumbersome in such instances.

 

Few will forget the crackdown on South African cricket fans which characterised the 2003 Cricket World Cup, of which Pepsi was one of the official sponsors.  The organisers employed the services of numerous security companies to protect the rights of Pepsi as the exclusive provider in the soft-drink product category.

 

Although the event was a “protected event”, the conduct of the organisers in this regard was not based on the section 15A amendments, but rather on contract.  The casual spectator who wore his favourite Coca-Cola T-shirt while sipping his favourite Coke, was asked in a friendly manner to part with the offending items.  These spectators were not amateur ambush marketers and could not be prevented from doing this by virtue of section 15A.  They simply did not read the conditions of entry appearing on the reverse side of their tickets.

 

WHAT THE FUTURE HOLDS FOR AMBUSH MARKETING

 

The 2010 FIFA Soccer World Cup would certainly qualify as a “protected event”. In fact, in a recent Government Gazette the event was designated as such   Furthermore, organisers should seek to reinforce and compliment this protection by implementing other, more innovative and practical measures, designed to tie up the legislative loopholes canvassed above.

 

Practically, the organisers should ensure that the public is well-informed of the conditions of entry to any game.  These should be clearly and boldly set out on each ticket, and event organisers should seek to educate the public about the consequences of non-adherence to the conditions, in ways similar to the Cricket World Cup example.  Ambush marketing by intrusion could, in this way, largely be prevented.

 

Insofar as ambush marketing by association goes, the remedies for the event organiser or sponsors may lie in the workings of the Advertising Standards Authority (“the ASA”).  In terms of their Sponsorship Code, a non-sponsor of an event may not in any way indicate a connection with , or derive benefit from the publicity value of an event. This confirms the approach to direct and indirect ambush marketing.  Any advertising by way of television campaigns, radio, billboards or printed media, ambushing the official sponsors, could effectively be stopped in its tracks by our media watchdog. 

 

It is suggested that the event organiser has to obtain the status of “protected event” as a first step.  Thereafter, it is the ASA’s prerogative to limit the advertiser’s rights to use his own trade marks in any form of advertising which falls within the ambit of ambush marketing by way of association.  There can be no doubt that an event such as the Soccer World Cup would have protectable advertising goodwill, worthy of the protection afforded by the ASA and its Code.

 

THE HAND OF GOD AT WORK

 

No, Maradona has no role to play, but the ambush marketer, climbing the ladder of marketing evolution, would have to tread very lightly in the days to come.  The Government of South Africa, realising the importance of the event, not only to the country, but also to the international sponsors, will have to enforce the legislation put in place. 

 

The first step has been taken. The 2010 FIFA World Cup is a designated event and the Merchandise Marks Act provides for the following penalties:

 

-          in the case of a first conviction, a fine not exceeding R5000,00 for each article to which the offence relates or to imprisonment for a period of not exceeding three years ,or both ;

-          in any other case, to a fine not exceeding R10 000,00 for each article or imprisonment for a period not exceeding five years ,or both.

 

Apart from informing the public of the list of official sponsors and ensuring that tickets to events clearly spell out the conditions of entry, event sponsors would have to take the initiative when it comes to lodging complaints at the ASA. The sanctions that the ASA can impose against an ambush marketer could prevent such a guilty party from getting access to the media for purposes of marketing its own products.

 

Although protecting an event such as the 2010 FIFA Soccer World Cup in terms of our legislation is a great deterrent, it is clear that organisers and sponsors would have to take practical steps to protect the commercial viability of the event and their own considerable financial interest.

 

Ambush marketing  has  become a favourite  past time for innovative marketers who believe they have a moral duty to find the most cost effective and innovative means of promoting their brands, Only time will tell whether  the Hand of God  was successful in combating these marketing ploys.

 

 

Mike du Toit

Director at Bowman Gilfillan

 
 
   

 

In association with Bowman Gilfillan Africa GroupMember of Lex MundiMember of Employment Law Alliance