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The public may even see the relationship as support for your business from an independent third party.

Major sporting events provide exposure to a large audience. The recent FIFA Under 17 Women’s World Cup in New Zealand attracted more that 200,000 attendees and an estimated global television audience of 100-200 million.  It is not surprising that businesses are seeking to associate themselves with large sporting events through sponsorship.  We can expect to see more of this in the lead up to the Rugby World Cup 2011, 2010 World Rowing Championships and 2015 Cricket World Cup.

The exposure also makes major sporting events attractive for businesses that are not official sponsors.  Ambush marketing describes the actions of companies that seek to associate themselves with an event, or to use an event to advertise their own products, without paying sponsorship fees.

For example, Li Ning, a Chinese gymnast and founder of a Chinese athletic wear company, won the high-profile role of lighting the Olympic flame at the official Beijing Olympics opening ceremony.  Li Ning also arranged to provide branded clothing for the sports journalists on Chinese Central Television during the Olympics.  Li Ning’s antics drew attention to his brand, to the harm of the official Olympic sponsors.

Given the vulnerability of large events to ambush marketing tactics, it is important that you protect the benefits of your sponsorship arrangements.
When sponsoring an event or a sports team, you need to make sure that a detailed sponsorship agreement is prepared that specifies how and when your brand and imagery will be used. 

Things you should consider include:

• how and when the sponsorship will be acknowledged, and how you can use the event name and brand in your own promotional materials. 
• how your will sponsorship be treated relative to other sponsors.
• what steps are being taken to ensure that your rights and benefits of being a sponsor are protected.  Some organisers have clear rules about how brands will be presented and insist on clean stadiums.
• what steps are being taken to stop unauthorised commercial exploitation of the event. 
• whether the organiser is working closely with local authorities, customs, law enforcement agencies and venue staff to detect and prevent counterfeiting and ambush marketing.

It is also important that you make sure that your intellectual property protection is in place.  You need to register your trade marks, tie up the ownership of any copyright, and ensure licensing arrangements are in order.  This will set you up to take legal action against breaches of your IP rights during the event and will make sure that your intention to protect yourself is clear.

Ambush marketing often emerges only during the event itself and should be addressed quickly.  Sometimes conventional steps taken to stop ambush marketing can have the counterproductive effect of publicising the unauthorised business trying to ambush the event. 

Special protection against ambush marketing is available for some events under the Major Events Management Act 2007.  Created in anticipation of the Rugby World Cup 2011, the Act provides protection and enforcement measures to deal with ambush marketing quickly and effectively.

The Act prohibits businesses from representing that they have an association with the event without the consent of the event organiser. Certain words or emblems that indicate an association can be declared off-limits.  Areas close to stadiums can be declared clean zones, which stops unlicensed vendors selling t-shirts or food & beverages outside the event and stops unauthorised advertising in these areas. There are also pitch invasion protections, which are intended to curb tactics like the Vodafone naked PXT body paint pitch invasion that interrupted an All Blacks v Wallabies game in 2002.  Ticket scalping is also prohibited. 

The Act does not cover all major events so ask the event organiser whether they have sought protection. The organiser must apply to the Minister of Economic Development for protection under the Act.

FMCG marketers have gradually been discovering the increasing value of sponsorship as more large events take place. As the importance of these arrangements increases to you and your competitors, the need to protect your rights aggressively will also increase.

An edited version of this article was published in FMCG, March 2009.