Although Lloyds TSB is just days away from finalising the deal to be an exclusive bank sponsor of London 2012, it may find that the value of those rights are substantially reduced as a result of competitor banks' activities that it is unable to prevent.
Lloyds TSB is expected to become the first national sponsor to sign up for the London 2012 Olympics this week, in which it could invest £80m.
However, Ardi Kolah, sponsorship expert and author of 'Sponsorship: Strategies for Maximising the Return on Investment', said the deal could be worth considerably less to the bank because of unofficial marketing by rivals, like the way Adidas suffered in the World Cup at the hands of rival and "unofficial sponsor" Nike.
Kolah said: "Lloyds TSB has seriously miscalculated the value of its investment as a London 2012 sponsor because its £80m bid for the exclusive rights in the banking category won't be sufficient to protect it against ambush marketing activities from all other major high street banks that issue Visa credit cards."
Visa is an Olympic Partner and, as a result, enjoys a substantially more valuable basket of intellectual property rights than a national Olympic sponsor. This means that Lloyds TSB's main high street rivals such as Barclays, HSBC and Nationwide, which all issue Visa credit and payment cards, can legitimately promote themselves as having an association with the London 2012 Olympic Games.
"Lloyds TSB shouldn't be under any illusion -- these banks are drawing up ambush marketing plans right now so as to neutralise Lloyds TSB's sponsorship plans for London 2012.
"The result of these competitor ambush marketing activities will be to create sponsorship clutter and confusion in the High Street as to which bank is the official London 2012 Sponsor. This will erode the value of Lloyds TSB's Olympic sponsorship rights as well as negatively impact the effectiveness of its London 2012 sponsorship activation programme," Kolah said.
He added that the situation is compounded because Lloyds TSB has an exclusive £20m deal with MasterCard, which means that Visa does not have to worry about any fiduciary duty it may have to Lloyds TSB as a card issuer.
Kolah said: "My advice is that Lloyds TSB urgently reviews its arrangements as a card issuer and extricates itself from the MasterCard deal as fast as possible and become an issuer for Visa credit cards and payment cards. Although this move may involve paying MasterCard several millions in compensation, it will ultimately help Lloyds TSB protect its £80m sponsorship investment in London 2012."
"Visa would then owe Lloyds TSB a fiduciary duty not to participate in eroding the value of its London 2012 sponsorship rights and thereby limit any future ambush marketing against Lloyds TSB in its sponsorship of London 2012 as a participating issuing bank."