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The Major Events Management Act 2007 carries out the Government’s decision to protect against ambush marketing (or ‘parasitic marketing’ as it is sometimes lovingly called). 

What is ambush marketing?

Ambush marketing describes the actions of companies which seek to associate themselves with a sponsored event without paying the sponsorship fees. The aim is to give the impression to consumers that they (the ambusher) are sponsors or that they are somehow connected to the event.

Successful ambush marketing coups in the past have included Nike handing out paper flags bearing the Nike logo to the crowds attending the 1996 Atlanta Olympic Games.  The TV cameras captured the crowds waving the Nike flags - to the despair of the official sponsor, Reebok.

Unlike other countries, New Zealand has chosen to adopt generic legislation that is not specific to any one event. Our new law can be triggered by the Minister of Economic Development whenever a suitable event opportunity arises from now on.  So far the only event declared a ‘major event’ is the Rugby World Cup 2011. 

The Act was designed with specific purposes in mind.  The purposes are:

• to gain maximum benefits from the ‘major event’ for New Zealanders
• to prevent unauthorized commercial exploitation at the expense of either a major event organizer or sponsor
• to ensure the event runs smoothly.

What actions could a retailer take that may cause a consumer to think it was associated with a major event?  

Ambush marketing by association is essentially any advertising, representation or conduct implying or suggesting an ‘association’ between the major event and your brand or goods or services.  

‘Association’ is a wide concept.  It extends to implying any relationship of connection, approval, authorization, sponsorship, or commercial arrangement with the event. 

Advertising that directly refers to the major event will fall foul of this Act.  So, this type of advertisement is out:

ABC RETAIL LIMITED
Aotearoa
Proud to bring you the [Major Event] 2011

The design agency you worked with on the advertisement will also be in breach.

Advertising that links a product with the major event, even indirectly, will be at risk. 

An example would be using images of trophies or cups, or photographs of teams involved in the tournament in your store. You might not even mention the name of the trophy, cup, team or make any reference to the major event, but still be in trouble simply by displaying the images.

In 1996 Telecom ran television and newspaper advertisements featuring the word ‘ring’ five times on a white background.  The colour and arrangement of the words were the same as the colouring and arrangement of the official Olympic rings.  Telecom was not a sponsor but Bellsouth was.  The advertisement promised that viewers could use their Telecom mobile phones to ring home from Atlanta. 

Back then, it was held by the High Court that ‘on a common sense approach an average newspaper reader would regard this as a clever piece of lateral thinking’.  Under this new Act, it may just go too far.

Retailers love promotions

Promotions help attract customers.  But now, as well as ensuring compliance with the Fair Trading Act and the Advertising Standards Codes, promotions will need to be carefully vetted and examined to ensure that they do not breach the Major Event Management Act 2007.  If you adopt a promotion that gives away or sells tickets to the major event as prizes, that could be ambush marketing by association.  And this is not allowed unless you have consent from the organiser of the event. 

If you buy tickets to the major event, and plan to invite your VIP customers but something comes up at the last minute which foils your plans, you cannot on-sell those tickets for greater than the price you paid for them.  It has now become illegal to sell or trade a ticket to a declared ‘major event’ for a profit.

You also need to be mindful of what words, phrases and emblems you use in any advertising and promotions you run.  The Minister of Economic Development will be asked from time to time to declare special words and emblems associated with the major event to be ‘out of bounds’.  If you use those special words or emblems or something closely resembling them, you will breach the Act, unless an exception applies or you have permission from the event organiser.

What else does a retailer need to be aware of?

The Act also protects against ambush marketing by intrusion.  This essentially involves taking advantage of the assembled audience to promote your brand in a specific location or activity location around the event stadium. 

Although there has been much commentary on banning streaking and ticket touting, the controls on advertising will affect retail and other businesses the most. 

Ambush marketing by intrusion is aimed at curbing street selling of goods, handing out promotional giveaways and even banners attached to fly past aircraft or blimps within declared ‘clean zones’ and declared ‘clean transport routes’ for a ‘clean period’ of time.  A ‘clean zone’ is the match setting and surrounding area.  A ‘clean transport route’ can extend up to 5km along key motorways, highways and railway lines. And a ‘clean period’ is any time during, before and up to 30 days after the event.

Unless you have permission from the major event organiser or an exception applies, street trading and advertising of any type (and not just that considered to imply an ‘association’) in clean zones is banned. 

Signs or billboards on private land within the clean zone containing advertising may be in breach.  Advertising outside the clean zone but still clearly visible to the naked eye from within the clean zone may be a breach.

Pitch invasions like the innovative Vodafone PXT body paint example that stopped the rugby game between the All Blacks and the Wallabies in 2002 will be caught.

So what can you do?

Not much on the face of it. Although to be fair, advertising by an existing retail business to carry out its ordinary activities can continue if the advertising is “in accordance with honest practices”.

If Coca-Cola is a sponsor of a major event and a local dairy has had Coke signs hanging outside for years, there should be no problem.  But if the dairy puts up new signs specially timed to coincide with the event, the new signage may not be allowable. 

It is also possible to express personal opinion, report news or information, use a place name, your own name or a trade name, provided you are acting in accordance with honest practices.

All is fine if you get permission from the event organiser for whatever it is you want to do.

What if things go wrong?

Well there are consequences.  Fines of up to $150,000 apply if you are caught ambush marketing by association or by intrusion.  Ticket scalping carries a fine of up to $5,000.  Pitch invasion (whether naked or not) is punishable by a fine of up to $5,000 or three months in jail. 

Proceed with caution

Like with any new law, it takes time to understand its boundaries.  This Act will be particularly difficult to work with because of its capacity to define and change what activity is permitted and what is not.

For retailers, being aware of this Act is a good start, but you will need to go further if you want to avoid a problem.  This is particularly so if you are positioned in or near a likely clean zone or along a clean transport route and even more so if you offer tickets to events as purchase incentives to customers.  Get advice early.

Talk to us for more information about the Major Events Management Act and how it might affect your business. 

An edited version of this article was published in NZ Retail March 2008

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  Corinne Blumsky

  Partner