At least thirty-six companies have official sponsorships, and before the games are over they are expected to splurge up to $2 billion on advertising. With the stakes running high, we are seeing some creative, and effective methods from established players like Nike, and local Chinese brands to benefit from the publicity of the event.

The term for the phenomenon is ambush marketing, any marketing campaign which takes place around the event but does not involve payment of a sponsorship fee to the event.For the Beijing Olympics we have a current example from Pepsi, although not an official Olympic sponsor, the company has taken an unusual move by launching a new commemorative red can – the color of China’s national flag, and synonymous with the Coke brand.

Ambush marketing at its worst is when the company misrepresents itself as the official sponsor of the event. However, I consider it more acceptable to use the “intrusion” form of ambush marketing, where the publicity of the event is used to gain brand exposure. This is especially true if the official sponsor only attempts to leverage the opportunity by using the outmoded form of associating themselves with the event, when that is the case, the ambush marketer has the right to run a campaign, especially if it adds value to the intended target audience.

Since Pepsi is playing upon national pride by unveiling this special can, I think it is an acceptable form of ambush marketing, especially if they back it up with other supporting moves leading up to the games. For Chinese companies not flush with cash, ambush marketing is the alternative to sponsorship. Hopefully, most will not error toward IP infringement but choose more creative methods, like the Chinese dairy manufacturing and distribution giant Mengniu.

Although not an official Olympic sponsor like its state owned competitor, Yili, Mengniu is among the top five most recognized growing brands in China according to the R3 OP (Olympic Performance) Index. Contributing to Mengniu’s improving track record is a focus on targeting young people with its “Among The Cities,” television show which highlights the country’s best amateur athletes. The slogan for the campaign is “Drink more milk and play more sports – everyone will be his own health champion.” Mengniu highlights what effective ambush marketing is all about – providing value to the target market without directly infringing upon IOC sponsors rights.

3-13-08 Update: BusinessWeek publishes Ambush in Beijing