Toyota pulling advertising from $83.50m-a-year partnership with IOC highlights commercial challenges, says GlobalData

Toyota’s withdrawal of Olympic-related advertising highlighted the commercial challenges facing the IOC and its lead sponsors, as crowd restrictions and low sentiment for the Games strain the value of Olympic partnerships, says GlobalData, a leading data and analytics company.

Patrick Kinch, Sport Analyst at GlobalData, comments: “The IOC was already facing enormous logistical obstacles, and is now having to deal with a growing problem to its commercial structure. Public opinion of the Games is already low in Japan, and this is now spilling over into the commercial side, with one of its biggest TOP sponsors opting out of using Olympic advertising. Further, crowd restrictions and fewer high-profile athletes competing has caused the car manufacturer to no longer see the value of the Olympic association.

“The IOC will no doubt be working hard to ensure that this decision by Toyota does not spill over into either its TOP partners or its remaining domestic sponsors, with these partnerships reaching $884m in 2021.”

The challenge for Toyota is the level of engagement this Olympics will see.

Kinch explains: “While Toyota is the dominant car manufacturer in Japan, with 50% market share, the vacant seats and athlete drops will make it much harder for the company, and any other brand for that matter, to launch any Olympic-based marketing campaigns or product launches. Toyota had hoped to show off its latest driverless car at the Games, but will now be keeping its powder dry for a marketing campaign or event that is less shrouded in COVID-19 uncertainty.”

For Toyota, the implications of this decision are not as serious as they may be for the IOC, with the car manufacturer currently holding a 50% market share in Japan and surging profit in Q4 of 2020. The IOC, however, will be wary of the potential domino effect of such a large partner withdrawing its commercial activities from the Games, with other firms potentially following suit as the Tokyo Games begins to lose its star appeal in the face of crowd restrictions, fewer big-name athletes and public unpopularity.

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