By Bill Hewitt from Kalido.
In August 2008, the lighting of the flame will signify the beginning of the 29th Olympiad in Beijing, China. It’s safe to predict that when the flame is extinguished 18 days later many fans will be rejoicing at the exploits of their respective country’s Olympians.
But there will also be a number of major corporations that hope to celebrate too. Having agreed to sponsorship packages estimated at $100 million apiece, companies such as Coca-Cola, Kodak, Panasonic and Visa will surely be looking to see if their investments are paying off.
One thing the official sponsors can be sure of is that they will get global brand exposure. Jacques Rogge, president of the International Olympic Committee (IOC), revealed that the TV audience of the 2004 Olympics in Athens was a record 3.9 billion unduplicated viewers.
With 1.3 billion people in China alone and the advent of the digital age, the 4 billion mark is set to be smashed. But exposure on its own is not enough. As any business leader will know, the focus nowadays within the industry is on measuring and demonstrating the direct impact of marketing activities on the business bottom line.
This means that sponsors will want to see that their investment has delivered increased brand performance and sales of products in multiple countries across the world, both during the games and in the longer term. But are the IT systems that provide information about brand performance up to the task?
Most of these systems are set up to provide an historical view – providing little opportunity for the marketing department to coordinate changes brought about by advertising impact with their colleagues in distribution.
Adequately measuring the impact of sponsoring an event such as the Olympic Games on global brand performance requires information to be gathered and analysed from across many different business units, product lines and geographies.
To collect this information, most enterprises still require small armies of analysts who typically undertake a laborious process of stitching together spreadsheets that organize information about individual brands or regions.
As a result, in many large companies, top-level queries about global brand performance are often going to be either answered incorrectly or will end up being added to the list of “frequently unanswered questions.”
These are questions to which senior executives need answers, if they are to improve their strategic decision-making around the benefits of key sponsorship programs and all other corporate initiatives geared at improving top-line revenue growth and profit margins.
Obtaining a quick and accurate picture of brand performance is difficult because information is usually held in multiple incompatible reporting systems in different formats across the globe.
Depending on where it is sold, the same brand may have a different name, package size, classification, etc., and the local reporting systems have grown up to support this diversity. In one large multi-national company, an internal study found 26 subtly different definitions of "operating margin.”
All of this complexity makes it extremely difficult for companies to aggregate information into a coherent whole in order to answer global performance questions. Suddenly relatively simple questions like “how profitable was Brand X in quarter two?” become very tricky, and it’s easy to see why errors creep in.
To track brand performance more accurately, companies are turning to increasingly sophisticated enterprise Business Intelligence and Data Warehousing projects. The best of these not only provide a central warehouse of performance information which analysts can use to get the answers they need, but they also embrace the increasingly popular concept of master data management (MDM).
MDM aims to provide the semantics and structure for building and holding the hallowed “golden copy of business definitions” – for example, the international product code classification or customer segmentation rules – which ensure that business analysts around the globe are comparing like with like.
The best projects are also designed to insulate the underlying IT systems from major business change. Some global consumer packaged goods (CPG) companies will regularly undergo a major realignment or consolidation of their product lines, wreaking havoc on their brittle data warehouses. This then turns reporting processes upside down.
The result? Business leaders get more reports, often inaccurate, instead of what they need most: answers to their key business questions.
An event of such mass proportion as the Olympics brings these critical questions to the forefront, so it is crucial that sponsors plan ahead to ensure that they have the right global information systems and processes in place.
This means they must address and solve the problematic issue of global information diversity caused by constant change and M&A and put in place effective, cost-effective performance data consolidation at a global level. Or to put it another way: answer the question ‘how much extra product did we sell worldwide the day after the 100 metres final?’
Failure to address this problem could mean that they won’t be able to learn what aspects of the campaign have worked. As a consequence much of the sponsorship money could be squandered, leaving all with a warm feeling from exposure but little business results to show for it.
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