Friday, August 15, 2008

The 2008 Beijing Summer Olympics – Michael Phelps the Beijing Games Marketing Machine IV

All that glitters is gold when it comes to Michel Phelps and while he may not be buying a stairway to heaven, Michael Phelps future includes millions of dollars in endorsements. Today in part IV of Sports Business News Michael Phelps series, SBN will focus on how important Michael Phelps is to NBC’s Olympic efforts and his relationship with PowerBar as part of our week long look at the marketing machine that is Michael Phelps.

Six gold medals and counting. Michael Phelps date with destiny – winning eight gold medals in a single Olympic Games continued unabated Thursday night (Friday morning in Beijing) when America’s Golden Boy won his sixth gold medal of the Beijing Games in the men’s 200IM. Up next for Phelps, Friday he’ll compete in the 100 butterfly and Saturday night he attempts (and all but certainly) become the first Olympian to ever win eight gold medals in a single Olympic Games. Unless the unthinkable happens the world will be celebrating the Greatest Olympian ever by 10:00 PM New York time Saturday.

You don’t have to read between any lines to appreciate how much Michael Phelps’ success in the pool has meant to NBC and their parent company General Electric. In just the first three business days of this week, NBC Universal has sold an additional $10 million in Olympic advertising on top of the more than $1 billion the network sold leading into the Beijing Games. The announcement was made yesterday by Seth Winter, SVP Sales & Marketing, NBC Sports & Olympics.

"From the buzz of the spectacular Opening Ceremony to a memorable first four days of competition, the Olympics have completely captivated the American public and further ignited our sales efforts," said Winter. "Americans are consuming our Olympic coverage in record numbers and in every way – through broadcast, cable, online and mobile. What's particularly encouraging to me is the strength in the young male demo, which has shown the largest increase of any age group."

Winter noted NBCU's strategy of holding back inventory to sell during the Games and cited a surge in interest in the movie, packaged goods and retail categories. Business has come from advertisers who had already bought Olympic time as well new advertisers. More than 100 companies have advertised during NBC's Olympic coverage.

Through five days, NBCU has attracted 168 million total viewers, nearly 15 million more than the first five days for Athens (153 million).

NBC's Beijing Olympic five-day average viewership is 31.3 million, almost five million more than Athens in 2004 (25.8 million). The national rating average of 17.8/31 is the best primetime rating through the first Tuesday for a non-U.S. Summer Olympics since Barcelona in 1992 (18.2/34) and is a 16 percent jump from Athens in 2004 (15.4/27).

All NBC advertising executives had to point at to potential Beijing advertisers – the ratings results Phelps produced Tuesday night when he won his fourth and fifth gold medals at the Beijing Games. NBC had its most viewed and highest rated night of the Olympics so far as Michael Phelps set the record for most Olympic gold medals ever won last night, reaching 82 million total viewers and posting a 19.9 rating, 34 shares.

Phelps won his sixth gold medal Thursday evening – Phelps date with destiny wasn’t part of NBC’s Olympic programming Wednesday evening and as The Los Angeles Times reported – the ratings results proved without a doubt Michael Phelps is driving NBC’s Olympic ratings.

With Phelps absent from Beijing Games swim finals on Wednesday night, NBC's prime-time broadcast for the first time dipped below numbers generated by the comparable 2004 Athens Games broadcast.

Wednesday night's broadcast drew an average of 27.7 million viewers, down from 28.4 million during the like broadcast in 2004, according to Nielsen Media Research data. The primetime rating was 16.7, down from 17.3.

Despite the one-night dip, NBC's average viewership of 30.8 million over six days is up from 26.2 million during the like period in 2004. The network's six-day national prime-time rating is 17.6, up from 15.7 during the comparable period four years ago.

"We know that the ratings spike when Michael appears," NBC Olympics President Gary Wurtzel said. "There's no question that Michael is an extraordinarily important driver."

"Without question, Michael Phelps is our biggest star," NBC marketing vice-president Mike McCarley told the Los Angeles Times.

A poll on Wednesday asking, "Is Michael Phelps the greatest American athlete of all time?" (note the lack of the qualifier "Olympic" before "athlete") was answered in the affirmative by 72 per cent of participants.

That's only slightly lower than the 75 per cent of respondents who voted "yes" when the Baltimore Sun's website asked whether their hometown boy would win eight gold medals.

As would be expected, the Sun's site has a special section devoted to the Baltimore Bullet, including an archive of Phelps-related stories dating as far back as September 2004.

It would seem everyone is doing their best to cash in on Michel Phelps. The offices of Sports Business News received the following release Thursday: For more than a decade, Donruss has been providing sports cards collectors with autographs from the sports world, Hollywood, and beyond. Collectors never know who they’ll get in a pack, or what bright future may lay ahead for the celebrity. That is exactly what has happened to Michael Phelps.

In 2004, Donruss released a Michael Phelps signed trading card within Leaf Rookie and Stars Football. Phelps, a lifelong Baltimore Ravens fan, was one of six from the world of sports and entertainment to sign Fans of the Game inserts for the 2004 series.

Before the start of the 2008 Summer Games, Phelps’ card was booking for a modest $30 to $60. As he has continued to secure gold medals, culminating in his record breaking 11th gold medal, the value of his signed card has skyrocketed. Several Phelps autographed cards have already sold for over $350 – and he’s not done winning. The unsigned version has more than increased in price nearly 10-fold during the Games.

Here is some new pricing information from Beckett on the Donruss Michael Phelps autographed card.

Tuesday Wednesday Thursday
Autograph: $60 $150 $350
Regular Card: $2.50 $8 $20

The Johnny come lately’s aside – Powebar has been a part of Michael Phelps marketing machine for several years. In March Powerbar unveiled their latest Phelps advertising campaign.

Carrying the tagline Power To Push, the campaign is designed to offer a window into an athlete's mind as they battle both physical and emotional barriers to reach their goals. It will be executed via a comprehensive integrated marketing program throughout 2008 including television, print and online advertising, event marketing and consumer engagement opportunities.

The 30-second Phelps television spot, which was unveiled on Discovery Channel, creatively positions the world-famous swimmer against sharks in the water as a metaphor for his competition heading into the 2008 Olympic Games in Beijing. It will air on targeted sports programming through Fall 2008 including ESPN, TNT, and The Tour de
France on Versus.

"Michael is recognized as possibly the greatest swimmer in history, and it's no secret that every guy in the water sees him as the one to beat," said PowerBar Sports Marketing Manger Chad Comstock. "PowerBar has long been a part of Michael's training regimen so he's a natural fit to bring this 'Power To Push' campaign to life. As he prepares for the 2008 Games, PowerBar will be there to help push him through his grueling training sessions in an effort to help him achieve his goals."

Phelps first teamed with PowerBar on the eve of the 2004 Athens Games.

“Since I started swimming competitively, PowerBar Performance bars have been my go-to energy source to gear up for intense workouts and to recharge afterwards,” said Phelps. “On average, I’m in the water about five hours a day and burn through about 2-3,000 calories. Proper nutrition is an essential contributor to my athletic performance and I’m psyched to have PowerBar on my team as a nutritional partner as I prepare for Athens.”

“Over the years, we’ve had more than 200 U.S. Olympic hopefuls use PowerBar products in training and competition,” said PowerBar Marketing Manager Stephanie Brendel. “Elite athletes like Michael require an incredible amount of energy for optimal performance, and we’re proud to provide the nutritional tools they need to help them reach their Olympic goals.”

After the 2004 Athens Olympics The Hollywood Reporter reported Disney signed Phelps -- then coming off a performance that earned six gold medals -- to a multicity swimming tour. He also became a celebrity spokesman for Hong Kong electronics maker Matsunichi, inking a four-year deal worth about $4 million.

Sports Business News offered an in-depth look at Phelps relationship with Visa in Thursday’s Insider Report. PowerBar like Visa is a longtime supporter of everything that is Michael Phelps.

"You need to be out there early and establish your affiliation with the property, Michael Phelps," said Michael Lynch, head of global sponsorship management at Visa whose relationship with Phelps dates back to 2002 in a Reuters report.

"His performance here will benefit us as it will add to the visibility we will get through this affiliation ... and his earning ability will increase, there's no question of that."

Portnoy said Phelps's youth and composure under pressure made him a marketer's dream. The only blotch on his record was an arrest for drinking and driving in 2004 for which he apologized.

"In the short term, he is a gold mine because he represents everything that is pure, young, strong and visionary about America. We haven't had anyone of this significance since Mark Spitz," said Portnoy.

"Guaranteed there will be marketers wanting a piece of him that make no sense and it will interesting to see how his handlers cope with this and if they get greedy because the Olympics has a narrow avenue of marketability."

Phelps is doing his best to make sure that Chinese fans have access to information about him. He had his personal Web site,, built in just two languages—English and simplified Chinese.

Phelps march towards eight gold medals in a single Olympic Games continues tonight (Saturday morning in Beijing ) when he wins the men’s 100m butterfly Saturday Sports Business News will look at Phelps relationship with Adidas (he’ll swim for a $1 billion bonus that day) and Sunday we’ll focus on Michel Phelps lasting Olympian marketing legacy.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The Los Angeles Times and Reuters

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