Five years ago, McDonald’s opened its biggest location to date at one of the most prestigious event and sports marketing platforms on the planet—the London 2012 Olympic Games. As part of a wide-ranging activation around that year’s Summer Olympics, its sustainably-designed temporary restaurant catered to visitors and athletes alike and was a testament to its status as a longstanding TOP level partner to the International Olympic Committee.
Now McDonald’s has shaken up not only its own marketing strategy but also, potentially, one of the world’s most important marketing vehicles by prematurely ending its multi-billion-dollar contract and association with the Olympic Games. It also appears that it won’t continue to sponsor national teams and athletes, such as its long-running support of Team USA, which continues to work with sponsors such as Chobani.
— U.S. Olympic Team (@TeamUSA) June 16, 2017
— U.S. Olympic Team (@TeamUSA) June 17, 2017
First partnering with the games in 1968, McDonald’s went on to become the Olympics’ official food retail sponsor. In 1976 it became a “TOP” sponsor (an acronym for The Olympic Partner program) of the International Olympic Committee, a sponsorship that contributes more than $1 billion toward the games in every four-year cycle.
Now McDonald’s is ending a contract that was due to run through the 2020 Tokyo Summer Olympics. It will, however, still serve as a domestic sponsor for the 2018 Winter Olympics in PyeongChang, South Korea.
As an example of its range of activities around the Olympics, last year it sent 100 kids to the 2016 summer games in Rio de Janeiro. But it really went for broke with the London 2012 Olympic Games.
Its London 2012 Olympic activation included sponsoring “Champions of Play” events throughout the host country, as celebrated on its UK Happy Meal that summer; a promotion with the Games’ mascots; and hiring more than 2,000 brand ambassadors just for the event.
In ending the current contract early, neither side has disclosed the financial terms involved. The IOC has said it wasn’t planning a direct replacement for McDonald’s and plans to review the category.
Olympics marketing partners come and go, but few with the iconic shimmer (or appeal to kids) of the McDonald’s brand. Other brands that are still committed as IOC TOP Sponsors include Atos, Bridgestone, Coca-Cola, Down, GE, Omega, P&G, Panasonic, Samsung, Toyota, Visa and Alibaba — China’s internet pioneer, which signed a deal in January that runs through the 2028 games.
In opting out, McDonald’s joins other former Olympics sponsors including Budweiser, Citi, Hilton, TD Ameritrade and AT&T, although some were Team USA sponsors only. Specifically, as CNN notes, “Budweiser and TD Ameritrade pulled out of their Olympic sponsorships this year, although their deals were only with the USOC, not the IOC. AT&T, Citi and Hilton have also opted to not partner with the USOC.”
Since CEO Steve Easterbrook took the helm in 2015, McDonald’s has been reviewing its marketing spending to make sure its achieving its goals and remaining relevant with its audiences and stakeholders. One factor that made the IOC a tough sell to continue with: TV broadcasting.
CNN noted the “disappointing viewership of the 2016 Olympic Games in Rio” was likely a factor: “NBC, which has the broadcast rights through 2032, reported a ratings dip last summer when it averaged 25.8 million viewers. The 2012 London Olympics drew an average of 31.1 million viewers.”
Consider, too, that the next three Olympic games will be held in Asia, where major time differences make it challenging to draw US viewers in real time, even though growth in Asia remains a top priority for the company.
McDonald’s didn’t explain its reasoning. “As part of our global growth plan, we are reconsidering all aspects of our business and have made this decision in cooperation with the IOC to focus on different priorities,” McDonald’s Global Chief Marketing Officer Silvia Lagnado said in a statement.
The IOC, in a classy response, said it understands “that McDonald’s is looking to focus on different business priorities” and thanked “our friends at McDonald’s on behalf of the IOC for the commitment the company has shown to the Olympic Movement over many decades.”