Advertisers not wary of 'Genocide Olympics'

Despite a possible backlash against China for its investments in Sudan, some media buyers say marketers will still embrace next year's Olympics.

By Paul R. La Monica, CNNMoney.com editor at large

NEW YORK (CNNMoney.com) -- The Summer Olympic Games in Beijing are more than a year away. But a growing backlash against China's ties to the government of Sudan could have some major consequences for GE (Charts, Fortune 500) and its NBC Universal entertainment division, which will broadcast the Olympics in the U.S., as well as several high profile corporate sponsors.

Actress and human rights activist Mia Farrow, who also acts as the United Nations Children's Fund (UNICEF) Goodwill Ambassador, has been referring to next year's games as the "Genocide Olympics," due to the conflict in Dafrur that has claimed hundreds of thousands of lives.

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China has invested heavily in Sudan's oil industry and some have argued that the country has not exerted as much influence as it could to stop the violence in Darfur.

Farrow has urged people to contact sponsors of the Olympics to ask them to withhold their corporate support of the games until there is a peaceful resolution to the crisis in Darfur.

Members of both the U.S. House of Representatives and the Senate sent separate strongly worded letters to Chinese president Hu Jintao last month saying that unless the Chinese government steps up pressure on Sudan to curb the violence in Darfur, China risks tarnishing its image before the Olympics.

The letter from the House warned that the Olympics could be a "disaster" marred by protests.

And Bill Richardson, the governor of New Mexico and Democratic presidential candidate, suggested in a debate with other candidates earlier this month that the U.S. might want to consider boycotting the Olympics if China doesn't do more to stop the bloodshed in Darfur.

A representative for NBC was not immediately available for comment about how a possible boycott or protests could affect the company. GE (Charts, Fortune 500) is also a sponsor of next summer's Olympics.

Coca-Cola (Charts, Fortune 500), one of the top sponsors of the games, said in a statement e-mailed to CNNMoney.com that the company "has been sponsoring the Olympic Games since 1928 and believes that the ideals of the Olympic Movement of building a better world through sport, friendship and fair play are more relevant than ever. Our sponsorship allows these positive messages to reach a broader audience and inspire both athletes and spectators. The Coca-Cola Company does not have a role in the internal policy decisions of sovereign nations such as China and the Sudan."

Coca-Cola added that it recently gave $750,000 to the Red Cross and Red Crescent for humanitarian relief in Darfur and that the company has no direct foreign investment in Sudan and does not conduct business with the country's government.

Representatives for other big sponsors, including Lenovo and Visa and Eastman Kodak (Charts, Fortune 500), were not available for comment.

But a Hong Kong-based spokeswoman for Manulife (Charts), the insurance company that owns John Hancock and is also a Olympic sponsor, said in an e-mail with CNNMoney.com that the company has so far not received any calls or complaints about the company's involvement with the Olympics.

A spokesman for the U.S. subsidiary of Panasonic, another Olympics sponsor, said Panasonic, which is owned by Japanese consumer electronics giant Matsushita (Charts), had no comment about the controversy and referred CNNMoney.com to Ben Seeley, a spokesman for the International Olympic Committee (IOC) in Switzerland. Seeley was also not immediately available for comment.

The Olympics are a multi-million dollar marketing opportunity for sponsors, as the games tend to attract large worldwide audiences. And the stakes are particularly high for NBC, which just finished in fourth place in the ratings race for the third consecutive season, and is clearly in sore need of improved ratings.

At last month's upfront presentation to media buyers and advertisers in New York, NBC spent a sizable chunk of time at the end of the event touting the Summer Games.

Yet, several media buyers said, that so far, the Sudan issue does not appear to be playing a major role in determining whether or not marketers want to buy commercial time during the Olympics.

"It's still a little early but I have not heard any concerns or backlash yet," said Andy Donchin, director of national broadcast with Carat USA, a media buying firm based in New York.

However, the possibility of more protests are something to keep an eye on.

"Politics and controversy are always a concern with the Olympics but at this point, it's sort of below the surface. I haven't heard of any specific advertisers that are worried about it because it's not top of mind yet," said Bill Carroll, a vice president and director of programming with Katz Television Group, a consulting and media buying firm based in New York.

That may change though.

"This is an issue that bears watching. Any time there is a negative dynamic associated with something as positive as the Olympics, it's one of many concerns that a network and advertisers could have," said John Rash, senior vice president and director of broadcast negotiations with Campbell Mithun, a media buying firm based in Minneapolis.

Carroll agreed, adding that if stories about China's association with Sudan becomes even more prevalent in the coming months, some advertisers might not be eager to have ties to an event referred to as the "Genocide Olympics."

"If China and Darfur becomes a more contentious situation then advertisers may want to avoid getting in the middle of it. Obviously, advertisers respond to their consumers. If there is a negative reaction to being an Olympics sponsor, advertisers will have to consider that," Carroll said.

But one sports marketing expert said some advertisers are still a little wary of becoming involved in the Olympics but not for political reasons.

John Rowady, president of rEvolution, a sports marketing and media company based in Chicago, said some of his firm's clients have expressed reluctance about the Olympics merely because China is a relatively new and untapped market for marketers.

So while some companies may not want to aggressively market in China itself, Rowady doesn't think fears of a backlash will effect domestic spending on advertising associated with the games.

"A lot of people are sitting on the fence to determine what their plans should be for the Olympics. Many companies may skip the Olympics just because they won't feel comfortable marketing in China just yet and not due to politics," he said. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.